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Federal budget: Andrew Barr says GST changes could have ‘dramatic effect’ on ACT

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ACT Chief Minister Andrew Barr says potential changes to GST funding in the federal budget could have a “dramatic effect” on the territory’s own budget.

Mr Barr’s comments come just days after Treasurer Scott Morrison ordered a review into how GST revenue is split among the states, after pressure from the Western Australian Liberals.

Andrew Barr said funding for health and education would be key priorities for the territory in this year's federal budget. Andrew Barr said funding for health and education would be key priorities for the territory in this year’s federal budget. Photo: Rohan Thomson

“The ACT government is hoping to see the federal government keep true to their word on GST funding,” he said.

“Any change to the draft GST relativities released earlier this year could have a dramatic effect on the ACT budget.”

Ahead of Tuesday’s federal budget, the Chief Minister outlined funding for health and education would be the key interests for the ACT, as well as funding for multiple National Partnership Agreements between the territory and federal government.

Mr Barr also said negotiations were underway between the two levels of government for a new city deal, which would see federal funding for projects such as stage two of the planned light rail between Civic and Woden.

“While we are hopeful for new infrastructure funding in the ACT or the Canberra region, we have been given no indication that this is currently in the federal government’s plans,” he said.

While many of the measures of this year’s federal budget are yet to be seen, the government has already announced plans to slash university funding by between two and three per cent.

Scott Morrison will hand down his second budget as Treasurer on Tuesday. Scott Morrison will hand down his second budget as Treasurer on Tuesday. Photo: Andrew Meares

The measures also included lowering the threshold university graduates will be forced to pay back their HECS debts to $42,000 a year.

“We are disappointed to hear reports that our local universities may have to absorb funding cuts, given the tertiary education sector is one of the territory’s largest employment bases,” Mr Barr said.

Canberra Business Chamber chief executive Robyn Hendry. Canberra Business Chamber chief executive Robyn Hendry. Photo: Jay Cronan

Last year’s federal budget centred on tax cuts to small businesses, and Canberra’s business community was hoping similar supportive measures would also feature this year.

Canberra Business Chamber chief executive Robyn Hendry said the group was looking for further measures which would see Australia’s company tax rate on par with other countries to be more competitive.

“ACT businesses have been through a period of uncertainty in recent years,” she said.

“Local businesses are currently the most confident in the country, but we have poorly thought out policy announcements, such as public sector decentralisation creating uncertainty.

“Small business is the engine room of the economy, and the chamber hopes for further incentives for small businesses to invest and grow.”

In the time since the last budget, the business chamber has met with representatives from the federal government several times.

Ms Hendry has also come out against the proposed university cuts.

“We need to make sure education funding cuts, particularly to tertiary education, do not adversely impact on our universities, nor undermine our ability to develop as a knowledge economy,” she said.

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