The foundations of the ACT economy are strong and we compare well with other states and territories. According to the latest data from the Australian Bureau of Statistics, our economic growth was on par with the rest of Australia in 2013.
Our labour market is strong. We had the lowest unemployment rate in the country, 3.6% at April 2014, compared to the national average of 5.9%. This low unemployment rate has been achieved by the 35,500 jobs that have been created in Canberra over the past decade—almost 10 new jobs a day on average.
Canberrans have also shown confidence in our economy with the second highest labour participation rate in the country. Canberrans are confident they will find a job.
But the ACT economy is facing a major challenge right now with the compounding effects of the Commonwealth Government's reduction in spending and jobs. The direct impact of this reduction we calculate at $375 million over the next four years, largely from cuts to health and reduced land sales.
We anticipate over the next year alone that 2,000 Canberrans could lose their jobs with the Australian Public Service and this will have flow-on effects in other areas such as retail and hospitality.
The Territory's economic growth in 2014–15 is expected to be significantly constrained by the slowing in the level of Commonwealth Government spending.
Treasury is projecting economic growth in the ACT (measured by Gross State Product in the table below) to grow by just 1¾% next financial year. This would be growth below the national average.
And year on year employment is expected to moderate to just ½% in 2014–15. These figures are down on previous years, and well below our normal growth rates.
On the positive side, low interest rates support continued private sector investment. Investment in the ACT will also be helped by our continued taxation reform and economic stimulus initiatives, including the ACT Government's own infrastructure program.
(Year-Average Percentage Change)
|Gross State Product||2¼||1¾|
|National Gross Domestic Product||2¾||2½|
Source: ACT 2014–15 Budget, Budget Paper 3, Budget Outlook