2016 ACT Budget Summary

7 June 2016

ACT Budget 2016-2017

The 2016-17 ACT Budget was handed down on 7 June 2016 by the Chief Minister and Treasurer, Andrew Barr MLA.

Key Points

  • 2016-17 ACT Government Expenditure $5,403.7 million (up 5.3% from 2015-16).
  • 2016-17 ACT Government Revenue $5,058.2 million (up 6.9% from 2015-16).
  • $373.4 million in new expense initiatives; $728.8 million in new infrastructure and capital initiatives; and $6.7 million in new revenue initiatives over four years.
  • Net operating balance a deficit of $182.0 million in 2016-17, an increase of $65.9 million from the deficit of $116.1 million previously forecast in the 2015-16 Budget.
  • Budget is still predicted to return to surplus in 2018-19, but the surplus has been reduced to $33.3 million down from $51.2 million.


ACT Budget 2016-17

The 2016-17 ACT Budget was handed down on 7 June 2016 by the ACT Chief Minister and Treasurer, Mr Andrew Barr MLA.

Total ACT Government expenditure for 2016-17 is $5,403.7 million, with revenue of $5,058 million. The net underlying operating balance is a deficit of $182.0 million in 2016‑17, which is an increase of $65.9 million from the deficit forecast in the 2015-16 Budget. The deficit is then forecast to be reduced to $35.0 million in 2017-18, and a return to surplus of $33.3 million in 2018-19.

The budget provides for $371.4 million in new expense initiatives over four years, consisting primarily of health, education and municipal services. The budget also contains $728.8 million in new infrastructure and capital initiatives over four years, consisting primarily of an Urban Renewal Program, health, social housing and education infrastructure.

These expenditures are offset in part by $6.7 million in new revenue initiatives over four years. Revenue initiatives include an increase of $3.6 million from the Ambulance Levy, $6.7 million in increased Fire and Emergency Services Levy, $55.5 million from changes in land tax, $19.1 million from the new Safer Families levy and $27.0 million from increased payroll compliance. Offsetting these revenues are a $12.0 million decrease in conveyance duties, $1.7 million by extending the over 60s Home Bonus scheme, $4 million by extending the conveyance duty pensioner concession scheme, $95 million by slowing the rates increase and $18.4 million from lifting the payroll tax threshold.


Economic Context

The economic context in which the ACT Budget has been handed down includes:

  • The growth outlook for the global economy continues to be lowered. China is transitioning to a slower, but more sustainable consumption orientated path. Economic growth in the Euro region is expected to remain moderate supported by monetary policy and lower energy prices. Japan’s outlook remains weak while a modest recovery will continue in the United States.
  • The Australian economy’s recovered in 2015-16 and will record 2.5 to 3 per cent growth over the forward estimates.
  • The ACT economy is expected to improve, with Gross State Product forecast to rise from 2.0% in 2015-16, to 2.25% in 2016-17, and 2.5 per cent in the forward years.


Budget Highlights

Budget initiatives impacting on businesses in the ACT include:


Taxes and Levies

The budget continues the Tax Reform process which began in 2012-13:

  • Rates will increase 4.5 per cent on residential properties and 7 per cent on average for commercial properties.
  • The fixed charge component of land tax will increase by $100 in 2016-17 and the ACT Government will introduce a tax on the value of units in multi-unit sites not the unimproved value of the land.
  • The payroll tax threshold will be raised from $1.85 million to $2 million on 1 July 2016. The payroll tax rate will remain unchanged at 6.85 per cent.
  • Duty on general insurance will be abolished in 1 July 2016.
  • Conveyance duty will be further reduced in 2016-17 on the portion of the property’s value below $300,001.
  • From 2017-18 conveyance property transactions below $1.5 million will be phased out over two years, with a flat 5 per cent applying for property values over $1.5 million.
  • Motor vehicle registration fees will increase by 5 per cent in 2016-17.
  • The introduction of a new Safer Families Levy of $30 per year on all residential and rural properties.
  • A new Lifetime Care and Support (LTCS) Levy on workers’ compensation insurers and self-insurers. A $1 increase in the LTCS Levy on Compulsory-Third Party Insurance Policies.
  • An increase in the Ambulance Levy of $5 per individual and $10 per year for families.
  • The Fire and Emergency Services Levy for residential and rural properties will increase by around $10 from 2016-17.


Business Development and Support

  • Data61, CBR Innovation Network and the ACT Fulbright Scholarship: $6.6 million
  • Continuation of Actsmart programs: $625,000
  • Energy Efficiency Improvement Scheme $3.6 million
  • Red tape reduction: $2.5 million


Tourism, Entertainment and Sport

  • Visit Canberra – Domestic and international marketing boost: $7.3 million
  • Bringing A­League football to Canberra: $245,000
  • Enhancing Canberra’s reputation as an events destination: $1.5 million
  • Test Match and One Day International Cricket for Canberra: $8.3 million
  • Canberra Capitals Basketball Team – Performance agreement extension: $250,000
  • Canberra Theatre Centre – Major show support fund: $50,000


Infrastructure Projects

  • New Molonglo Valley infrastructure: $33.0 million
  • New public housing properties: $357.2 million
  • Gungahlin Town Centre road network improvements: $4.5 million
  • Weston Creek and Stromlo swimming pool and leisure centre: $33.0 million
  • Canberra Theatre Centre: $410,000
  • Upgrading and maintaining ACT health Assets: $95.3 million
  • Aikman Drive duplication: $9.8 million
  • Stronger bridges to transport freight: $6.5 million
  • Horse Park Drive duplication: $57 million
  • Cotter Road duplication: $28.9 million
  • Light rail business partnership program: $500,000



  • Improved delivery of ACTION Services: $47.1 million
  • More bus services – ACTION Network 16: $3.5 million
  • Increased maintenance funding: $6.9 million
  • Waste management contract renewals: $1.3 million
  • Park and ride facility for Wanniassa: $1.5 million


The 2016-17 ACT Budget focuses on committing a substantial amount of money towards infrastructure and capital initiatives – $2.9 billion over the next four years, of which $729 million is new. This expenditure is primarily aimed at improving health, education, social and municipal services in the ACT, which the Chamber agrees will improve the liveability of Canberra, boost employment, and provide opportunities for business.

More specifically, a handful of key Budget measures are of interest to the ACT’s business community: An $8.8 million injection to help promote Canberra as a tourism destination and stage world class events is welcome news; raising the payroll tax threshold from $1.85 million to $2.0 million will provide tax relief for all businesses, particularly smaller ones; and funding to allow expansion of Pialligo Avenue is the first step towards helping Canberra become a regional freight hub.

The Chamber is particularly pleased to see funding of $500,000 for the Light Rail Business Link Program and $600,000 over two years for the CBR Innovation Network – both programs can now continue to support ACT businesses.

However, the Budget could have provided increased benefits through greater involvement with business. In a climate of increasing fiscal pressure, as Budgetary expenditure continues to outstrip revenue, the Chamber is disappointed that the ACT Government has failed to exploit the potentially higher return on investment that typically accompanies partnership with the private sector, such as through outsourcing.

In its Budget submission to the ACT Government, Canberra Business Chamber highlighted several proposed business programs that provide excellent examples of a high return on investment for minimal outlay, but which the ACT Budget has failed to fund. These include programs for work integrated learning and dedicated trade liaison with local diplomatic missions.

The latest ACT Budget also does little to address the critical need to rejuvenate Civic, a central business district that is a major part of Canberra’s identity nor does it progress the Australia Forum convention centre development.

The budget recognises that Canberra is recovering well from the Commonwealth expenditure reforms. It is now time to harness the creative energy of Canberra’s private sector to diversify the economy and increase our economic resilience and agility – as outlined in Chamber’s Destination 2030.