An independent interim report to the ACT Legislative Assembly has found the Territory’s budget position has deteriorated over the past decade due to policy decisions, prompting political debate over how to restore fiscal sustainability.

An interim report by independent specialist adviser Saul Eslake to the Legislative Assembly’s Select Committee on the Fiscal Sustainability of the ACT was tabled in the Assembly on Monday outlining what it describes as a significant weakening of the Territory’s finances over the past 10 years.

According to the report, the ACT’s budget position has “deteriorated over the past decade” and this decline is “entirely attributable to policy decisions”. It states that expense decisions have worsened the net operating balance by at least $7.2 billion over the period, while revenue measures have offset only a fraction of that impact.

Canberra Liberals Leader Mark Parton said the findings showed the government had “lost control of the budget”.

“This isn’t bad luck, it’s bad management,” Mr Parton said. He argued the report made clear the deterioration in the Territory’s finances was the result of Labor’s policy choices and said Canberrans were “paying more and getting less”.

The report highlights health and education spending as key pressure points. It notes the ACT spends more per student than any other jurisdiction but “doesn’t get better outcomes”. In health, it finds the Territory spends more per person on public hospitals than the national average, yet in some areas patients experience worse results, including emergency department timeliness and elective surgery waiting times.

Mr Parton said the government’s fiscal strategy was described as “vague and unspecific” and lacking numerical targets, calling for “honest budgeting and disciplined spending” and a credible path back to sustainability.

ACT Greens leader Shane Rattenbury also responded to the interim findings, saying the report “paints a clear picture of the challenge that lies ahead” but warning against repairing the budget through cuts to essential services.

“It’s clear we cannot respond by cutting services the way neoliberal governments of the past did,” Mr Rattenbury said. He argued that restoring the budget should not come “at the expense of those who can least afford it”.

Mr Rattenbury said the path forward would require a combination of increased revenue and genuine savings and efficiencies, rather than what he described as “rash austerity budgets” or widespread public service job cuts.

He noted the report’s focus on health and education, which account for more than half of government spending, and said improved outcomes and better use of resources were needed given the level of investment.

The Select Committee will continue its inquiry into the ACT’s fiscal sustainability in the coming months, with the interim report set to inform further scrutiny and recommendations.

Read the report here.