- Economic growth of 2.5% is forecast in 2021-22
- The Budget forecasts a net deficit of $951.5m, with net debt to rise to $5.7b in 2021-22
- Major areas of investment include healthcare, mental health and infrastructure projects
The 2021-22 ACT Budget invests in supporting the Territory’s public health response and economic recovery, focusing on job creation and protection, healthcare, mental health, essential services, infrastructure projects and tax reform.
Despite the impact of the pandemic and lockdown restrictions, economic growth of 2.5% is estimated in 2021-22.
As the economy recovers and borders reopen, employment is expected to grow at 0.5% in 2021-22 and 1% in 2022-23.
The Budget estimates a net deficit of $951.5 million in 2021-22, with deficits decreasing over the forward estimates, reflecting a stronger economic outlook as temporary spending measures to address the pandemic are no longer required.
Net debt is forecast to increase to $5.7 billion in 2021-22 and to $9.6 billion by 2024-25.
Healthcare and mental health
The ACT Government’s immediate priority is responding to the public health emergency, including the vaccination roll-out. The ACT expects to reach 80% full vaccination of the eligible population by mid-October this year. This year’s Budget commits $90 million to the COVID-19 public health response.
The Territory’s public health services will also receive $500 million in additional funding over four years, including expanding critical hospital services and increasing community and home-based health care.
In addition, the ACT Government has provided $57 million in mental health support funding, including $43 million over four years to expand acute mental healthcare capacity at Canberra Hospital and the Adult Mental Health Unit.
Jobs and infrastructure
The Government’s plan to create 250,000 local jobs by 2025 to boost the ACT economy also remains a priority, supported by investments in infrastructure projects, public education, training and skills development.
The Budget includes the ACT Government's largest ever infrastructure investment of $5 billion over five years to 2025-26, with capital investment priorities in the areas of health, education, public transport, public housing, climate action and urban renewal.
Key infrastructure projects include $870 million for health infrastructure, including the Canberra Hospital expansion, more than $950 million towards CIT and education infrastructure for schools, and $1.4 billion to upgrade and expand the city’s transport network, including stage two of light rail.
The Budget also commits an additional $100 million to public housing, as part of a $1 billion investment in new social housing across Canberra over 10 years to 2025.
Education, training and skills
The Budget allocates additional support for ACT public education, including a $200 million investment in school education and skills in 2020-21.
Vocational Education and Training (VET) is also a key driver of economic growth. Additional funding is allocated for a range of new VET initiatives, including apprenticeships and traineeships; an extension of the JobTrainer program to provide 2,500 additional free skills training places for young people and job seekers over two years; $2 million to expand the Future Jobs Fund to provide grants to the higher education and research sector to create jobs in growth industries; and extending resourcing for major education infrastructure projects.
This year’s Budget brings a greater focus on wellbeing and the ACT Wellbeing Framework. The Government’s priorities and new investments are considered across five categories, including (1) health and community wellbeing; (2) education and life-long learning; (3) community, housing and safety; (4) environment, climate, transport and planning; and (5) governance and the economy.
Climate and environment
The ACT’s climate action agenda will receive more than $70 million in additional investments to protect Canberra’s environment. The $150 million Sustainable Household Scheme has also been opened to all eligible households, which can now apply for interest-free loans of up to $15,000 to buy energy efficient products such as rooftop solar panels, household battery storage systems, zero emission vehicles and energy efficient electric appliances.
Sound public finances
While COVID-19 has significantly affected the Government’s ability to generate revenue, and with net debt expected to grow over the forward estimates, the ACT Government recognises the importance of Budget repair.
A strong public health response and economic support measures are priorities in the short term.
The fiscal and Budget strategy for the medium term remains focused on restoring public finances and stabilising net debt, with the return to a net operating balance to be managed over the longer term.
Over the medium term, the Government will also continue to provide targeted support to areas of the economy that need additional help to encourage economic recovery and jobs growth.
The ACT Government is also aware of the disproportionate intergenerational impact that downturns have on the prospects of young people and will continue to invest in skills development and economic opportunities for young people to ensure intergenerational equity.
Sustainable taxation and revenue
The pandemic has highlighted the need to continually improve the efficiency and productivity of the economy to support economic growth. The ACT Government is achieving this through a tax reform program that is phasing out conveyance duty. Tax reform aims to improve the fairness of the tax system and minimise the economic costs of collecting taxes.
To date, about 50% of insurance and conveyance duty revenue previously collected has been replaced with general rates. As a result, conveyance duty revenue now accounts for only 12% of the own source revenue base, compared with 26% before tax reform.
The ACT Government has committed more than $475 million to targeted business support since the start of the pandemic. The 2021-22 Budget continues various financial support measures to help local businesses through the current phase of the recovery, including the COVID-19 Business Support grants, the Small Business Hardship Scheme and a range of other grants, payroll tax exemptions and fee waivers.
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2021-22 ACT Budget Papers
ACT Government Budget 2021-22 hubRead more
ACT Government COVID-19 lockdown business support
CA ANZ’s summary of COVID-19 business support measures to help ACT businesses through the lockdown.Read more
ACT’s COVID-19 pathway forward
The ACT Government's pathway forward outlines gradual and safe steps towards a COVID-normal life in the ACT.Read more