2006–07 Australian Capital Territory budget


The 2006–07 Australian Capital Territory budget for the financial year 2006–2007 was presented to the Australian Capital Territory Legislative Assembly by Chief Minister of the Australian Capital Territory Jon Stanhope on 6 June 2006. Stanhope is also the Treasurer, with this budget being the first he has presented as Treasurer.
Among the most-discussed elements of the budget were its planned closure of 39 schools in the Territory
as part of its "Towards 2020: Renewing Our Schools" vision for education in the Territory.
Stanhope asserted in a Letter to the People of the ACT, that this is the "first time in 17 years that any ACT Government has embarked on strategic and structural reform of this magnitude." He asserts that demographic shifts have led to 18,000 empty desks in ACT government schools and that it costs up to $10,000 more per year to educate children in schools with low enrolments, compared with a child at a school which is at or near capacity. Quoting figures from the Commonwealth Grants Commission, Stanhope argues that "it costs some 20% more, across the board, to deliver basic services like health and education in the ACT than the national average.". The budget announcements have provoked strong criticism from the ACT Council of Parents and Citizens Associations, Australian Education Union ACT branch, the ACT Opposition and members of the public.

Revenue, expenditure and net operating balance

Revenue

Changes affecting revenue are designed to expand the revenue base, achieve parity with other jurisdictions where appropriate, and recover costs incurred in delivering services.

Expenditure

Total expenses in 2006/07 are planned to be $2,886.7m. Major areas of government expenditure are:
$337 million will be spent on Capital Works Projects in 2006–07: $112.3 million for New Works announced in the 2006/07 budget and $224.7 million for Works-in-Progress, i.e. previously announced measures.

Net operating balance

The budget for 2006/07 includes a projected operating balance in $million per year over the next four years as:

Education

In 2006/07 the Government will spend $719.2 million on education:
The Government proposes to make capital improvements in schools and to spend more on school maintenance. New schools will be built in Belconnen and Gungahlin and there will be a feasibility study for a combined college and CIT campus at Gungahlin. A further $20 million has been provided over four
years for Information Technology services across the school system.
The Government also proposes to close significant numbers of schools over the next three years.
In 2006/07 the Government will spend $765.1 million on health:
There will be $41 million more spent on health, but the Government plans to slow the rate of growth in this budget from 10 per cent a year to around 6 per cent.
An extra $10 million will be spent to reduce elective surgery waiting lists over four years.
Canberra Hospital will become the major tertiary referral hospital, while Calvary Public Hospital will provide more specialised services.

Public housing

Criteria for allocation of Public housing has been made more stringent. Single people earning more than 60% of the average wage and couples earning more than 75% of the average wage will not be eligible.
500 dwellings will be sold and the money reinvested in other public housing.

Police & emergency services

The ACT police force will be increased by 60 more police.
Surveillance in the territory will increase with a network of Closed-circuit television cameras in public places and on ACTION buses.
The ACT Emergency Services Authority will be re-absorbed into the ACT Department of Justice & Community Safety. A new emergency services headquarters at Fairbairn will be built at a cost of $17.3 million.

Public service

New recruits will have employer superannuation contributions curbed at 9 per cent; compared with 15.4% for existing employees and 29% contributions towards the Chief Minister's superannuation.
The ACT public service will be cut by 500 jobs.
A new department will absorb several agencies including Environment ACT and sport and recreation.

Increases in taxes and charges

Despite the cuts in services and school closures, the average ACT household will pay around $400 more each year: rates will rise by 6 per cent and households will be charged a new fire and emergency services levy of $84.
Household water bills will increase in the order of $100 per year. There will be a new water fee of 30 cents per kilolitre. This fee will be added to water abstraction charges nearly doubling them to 55 cents per kilolitre.

Accounting changes

The Government has changed its accounting system so the Budget does not include fluctuating amounts like superannuation returns.