Liberals' black hole destroys surplus, credit rating

The Canberra Liberals would plunge the ACT into a $400 million budget black hole, based on conservative estimates of the cost of their promises to date.

We already know they plan to shred the Territory’s prized AAA credit rating. Over the four years of the current budget, their promised spending to date will increase the deficit for the next two years and turn this government’s surplus into a deficit in the following two. There is no hope of a balanced budget from a team their own party has branded economic lunatics.

To make good on their promises, they’ll blow more than $50m in unfunded spending in their first year in government, $150m the next year and around $100m in the following two years, turning projected surpluses into deficits.

The biggest ticket item is the Liberals’ plan to write a cheque for hundreds of millions to pay the light rail consortium to do nothing, but we have used the lowest possible calculation of this – and it’s just the start.

Headline Net Operating Balance

 

2016-17
($m)

2017-18
($m)

2018-19
($m)

2019-20
($m)

Total over

4 years

Headline Net Operating Balance – as at 2016-17 Budget

-94.3

-35.0

33.3

66.0

-30.0

Light Rail Cancellation Compensation/ Asset Recycling Funding Forgone

-40.0

-90.0

-87.0

-70.0

-287.0

Light Rail Savings

0.0

0.0

50.6

60.6

111.3

Cost of new spending announcements

-13.3

-60.2

-63.9

-88.6

-226.1

Total Impact on Budget

-53.3

-150.2

-100.3

-98.0

-401.8

Revised Headline Net Operating Balance

-147.6

-185.2

-67.0

-32.0

-431.8

N.B. Totals may not add due to rounding

We have only used the commitments they’ve made on the record. Where the Liberals have costed a policy – however unrealistic their numbers are – we’ve used their figures.

This $400m piece of economic vandalism is the best case scenario. The damage is likely to be far greater.

The Canberra Liberals have no clue about running a budget – let alone a territory – all they know is how to promise anything to get a vote, promises they can’t deliver without bankrupting the territory.

They keep promising to use light rail money that simply doesn’t exist. Canberrans won’t start paying for light rail until it’s running down the track and the cost is shared across a generation. Under the Liberals, Canberrans pay immediately for nothing.