ACT posts $180 million budget surplus as public service spending lifts local economy

The ACT government has posted a $180 million operating surplus for the financial year just ended, ahead of the $140 million forecast in the last budget update, driven by stronger-than-anticipated land revenue, robust GST receipts from the Commonwealth, and continued growth in payroll tax and conveyance duty collections.

Treasurer Andrew Barr said the surplus would be directed toward accelerating the territory's infrastructure program, with priority given to transport, schools, and the health system. The government would not be returning the surplus as a dividend to residents, he said, as the infrastructure backlog made reinvestment the responsible choice.

The ACT's economy grew at 2.9 per cent in real terms over the year, faster than any state economy and well above the national average of 1.7 per cent. The dominant driver remained the Commonwealth public service, which employs approximately 20 per cent of the ACT workforce, with federal budget spending particularly strong in defence, health, and social services programs.

Business Chamber ACT chief executive Greg Harford said the fiscal position gave the government capacity to respond to the housing supply challenge without cutting services elsewhere. He said the Chamber's top priority for the surplus was acceleration of the land release program, which had been constrained by planning approval delays. "Land supply is the most direct lever available to the government for housing affordability," he said.

The budget for the coming financial year is forecast to return to a modest surplus of $65 million, with the larger infrastructure spend temporarily increasing capital expenditure above operating revenues.

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