An independent report into the ACT’s finances has found the Territory’s budget position is not sustainable, warning that rising debt and ongoing deficits stem from deliberate policy choices rather than external economic pressures.
The final report by independent economist Saul Eslake, prepared for the ACT Legislative Assembly Select Committee on the Fiscal Sustainability of the ACT, finds the Territory’s financial position “cannot be characterised as sustainable” and attributes the deterioration in the budget largely to “conscious policy decisions taken by the ACT Government”.
The report argues that the growth in net debt over the past decade, and its sharper rise in recent years, reflects decisions to maintain higher levels of spending without what it describes as a credible long-term funding strategy. It also warns that the cumulative impact of borrowing is increasingly being shifted onto younger Canberrans and future generations.
While noting the Territory is not insolvent and that the fiscal position remains manageable in the short term, the report cautions that continued deficits and rising liabilities are placing pressure on the budget outlook, particularly as households face higher rates, taxes and broader cost-of-living pressures.
Canberra Liberals Leader Mark Parton said the findings should prompt a change in direction from the government.
“Saul Eslake’s interim report was a wake-up call. His final report should be the end of Labor’s deflection and denial,” Mr Parton said.
“Labor has made conscious decisions to increase net debt tenfold in a decade, with half of that happening in the last three years. It was never bad luck. It was their conscious choice.”
Shadow Treasurer and Shadow Minister for Youth Affairs Ed Cocks said the report highlights the long-term distributional impact of current fiscal settings, particularly on younger residents.
He said the report shows “Canberra’s problems are not yet insurmountable” but warned the Budget would not correct itself without policy change.
“It’s going to take honest budgeting, disciplined spending and a credible path back to fiscal sustainability. The report shows how the government has failed Canberrans on each of these fronts,” Mr Cocks said.
The report calls for a return to more disciplined fiscal settings and a clearer strategy to stabilise debt over the medium term, warning that without change the Territory risks locking in structural deficits.
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