The ACT economy has been significantly impacted by the Commonwealth Government's cuts to jobs and spending. As a result, employment and overall economic growth slowed considerably in 2014-15.
The 2015-16 Commonwealth Budget signalled the end of the job cuts in the Australian Public Service, but its spending remains low. It will take some time for our economy to regain strength and for consumer confidence to grow once again.
Jobs have been lost. At the time of the release of the Commonwealth Budget in 2014, our unemployment rate was 3.7 per cent. Since then it has jumped to 4.3 per cent - a direct result of the Commonwealth's decision to reduce the size of the Australian Public Service and the flow on effects to other sectors such as accommodation and food services.
As a result, our economy will only grow by 1¼ per cent in 2014-15. The number of people in a job is expected to have fallen by about a ¼ of a per cent by year end.
However, the situation would have been worse had the ACT Government not invested in jobs and infrastructure in recent years.
As a result, we have much to be hopeful about with business and consumer confidence anticipated to pick up this year.
The ACT has the lowest unemployment rate in the country and the second highest labour participation rate - we have good reason to be confident about our business and job prospects.
The ACT Treasury is projecting modest economic growth in the ACT of 1½ per cent in 2015-16, with year on year employment expected to grow by ¾ of a per cent.
The ACT Government will continue to support the economy with investment in projects that will benefit the community in coming years.
These projects will create job opportunities, improve services and generate long lasting benefits for our city and its people.
The Government's strategy will be assisted by low interest rates that will encourage private sector investment, continued tax reform to create a fairer and more sustainable tax system and reduced red tape.
This budget supports the ACT economy by creating jobs and continuing to deliver quality services.
This means more health and education services, easier ways of doing business, ongoing suburban renewal and better transport for Canberra.
The goal is to secure the ACT's economic future through responsible financial management where temporary deficits are offset by surpluses in other periods.
Continuing to invest in important infrastructure projects will benefit the community in the longer term.
The Government's infrastructure program will modernise our city with capital works boosting employment and aiding in the delivery of quality services for the people of Canberra.
The large capital program will be supported by the sale of surplus assets and while our debt will increase, responsible borrowing will stimulate the economy and create jobs.
In 2015-16, the forecast Headline Net Operating Balance is a deficit of $407.6 million. This is expected to improve each year until 2018-19 when the budget is forecast to return to surplus.
This is consistent with the Government's fiscal strategy and intention to support the economic wellbeing of the Territory both now and in the future.
|State Final Demand||1.9||2¼||2¾|
|Gross State Product||0.7||1¼||1½|
|Wage Price Index||2.4||1¾||2¼|
|Consumer Price Index||2.2||1¼||2|
|Gross Domestic Product||2.5||2½||2¾|
Source: ACT 2015-16 Budget, Budget Paper 3, Economic Outlook