ACT fiscal sustainability inquiry finds finances unsustainable

A multipartisan parliamentary inquiry has found the Australian Capital Territory’s (ACT) financial position to be ‘not sustainable’. The report indicates that the territory has spent more than it raised across the total sector every year since 2011-12, driven largely by government policy and expense decisions.

Net debt is projected to rise from less than $1 billion to $11.2 billion by June 2025, with 45 per cent of that deterioration occurring after 2021-22. General government interest costs are forecast to reach $974 million by 2028-29, representing approximately 9 per cent of revenue, which the committee warns will reduce funding available for essential services like health and education.

The inquiry recommended increasing the number of Treasury officials to better track and rein in public spending, noting that better resourcing for Treasury could improve financial management across the public sector. The committee also called for more transparent budget information, more accurate forecasts, and a plausible pathway to budget repair. While suggesting a need for better prioritization of infrastructure projects, the report warned against raising taxes on residents.