Treasurer Chris Steel delivered his first Budget last year, and a record deficit. Photo: Ian Bushnell.
The ACT’s billion-dollar budget deficit is forecast to be more than halved, according to today’s budget update.
ACT Treasurer Chris Steel will deliver the mid-year Budget Review to the Legislative Assembly this afternoon.
Mr Steel said the government was on track to deliver an improvement in the Budget bottom line from a record deficit of $1.1 billion in 2024-25 to a deficit of $499.1 million in 2025-26 – a $632 million turnaround.
But this is still $74 million more than forecast in last year’s Budget, when there was no extra Commonwealth health funding to assist the bottom line.
Mr Steel said today’s mid-year Budget update showed the government’s fiscal strategy was working, as it continued to deliver the services and infrastructure Canberrans expected, while improving its fiscal position.
“Rather than an approach floated by our political opponents of cuts, we’ve worked with the Albanese Labor Government on a five-year health funding deal worth $4.1 billion to the ACT over the next five years,” he said.
The health deal includes an additional $557 million in public hospital funding and an extra $150 million over the next two years to address challenges that smaller jurisdictions face when delivering health services.
Mr Steel said the additional health funding built on the important progress made to the Territory’s finances and would be reflected in the Budget in June.
In his first Budget last year, Mr Steel announced a combination of revenue measures and spending restraint across the ACT public service.
Mr Steel said the ACT economy remained strong, with the Budget Review to include recent Gross State Product figures showing the Territory had achieved 29 years of continuous economic growth.
In last year’s Budget, Canberrans were slugged with a controversial new health levy that the government was forced to pare back, increases in taxes and charges, and general rate rises, including an extra impost for high-end properties to arrest the ACT’s precarious financial position and bring the Budget back to surplus by 2027-28.
Mr Steel’s first Budget mixed fiscal repair with a commitment to maintain services and the Territory’s $8 billion infrastructure pipeline.
He said at the time that with the ACT emerging from a cost-of-living crisis, inflation and interest rates falling, and the economy growing, it was the right time to make difficult decisions to rein in the deficit and return the Budget to balance.
“There is a need to make difficult decisions in relation to the Budget to get it on a more sustainable footing,” he said.
A combination of revenue measures totalling $722 million over four years and public service efficiencies targeting $282 million over the same period was designed to return the Budget to a $330.6 million surplus in 2028-29.
The record 2024-25 deficit of $1.1 billion was expected to fall to $425 million in 2025-26, then $103 million in 2026-27, before returning to the black in 2027-28 with a $48 million surplus.
