Just as the Australian federal government is trying to find a remedy for the revenue and expenditure imbalance with new reforms, the government of Australian Capital Territory has reported a bulging deficit outlook. This was revealed in the government's mid-year economic outlook report, which predicted a deficit of nearly $480 million for the 2015-2016 financial year. This is in contrast to the previous estimates. The new update confirms that the ACT budget deficit will be up by $70 million.

This goes against the forecast made by ACT Chief Minister and Treasurer Andrew Barr, who in June said that the budget would finish the 2015-16 financial year with a $407 million deficit and post a modest surplus of $50 million by 2018-19. However, the ACT Government took comfort that it was in line with its economic strategy and the AAA rating is intact, reports ABC News.

Superannuation liability

The zoomed deficit is attributed to the adjustment in the superannuation liability, exacerbated by surging expenses and falling revenue. However, ACT holds a brighter outlook in revenue at $100 million in the next four years.

“As we move into planning for the 2016-17 ACT budget, Canberrans can be assured we will continue vital funding for health and education services,” he said.

He said the ACT will continue with the drive to reduce stamp duty on Canberra properties and announce a five-year plan for tax reform to ensure a sustainable revenue base for the territory's future.

Failure to diversify

The deficit drew a reaction from Shadow Treasurer Brendan Smyth, who said the ACT Government failed to “diversify the economy.”

"We've had many promises from this Government about the creation of jobs through infrastructure and most of the time we don't seem to get a benefit," he said.

Meanwhile, Barr claimed that the 2015-16 Infrastructure plan will offer more jobs. The ACT Government's plan envisages a record $2.8 billion of investment in the infrastructure projects across the capital and the projects include Majura Parkway, new schools and the light rail network.

Toddler boom

Meanwhile, ACT is witnessing the biggest jump in number of children. Despite the Bureau of Statistics data showing the Aussie population is continuing to age, the ACT is in a reverse mode, reports Canberra Times.

The ageing population will have implications in health budgets, working-age population, housing and demand for skilled labour.

The ACT recorded a 2.4 percent increase over 2014 on the number pf children aged 0 to 14 years. Western Australia followed with a growth of 1.5 percent, and Tasmania recorded a drop of 0.5 percent. Overall Australians are getting older. Since 1995, the proportion of Australia's population aged population of 65 years and above increased from 11.9 percent to 15 per cent. During the same period, the proportion of child population below 15 years fell from 21.5 percent to 18.8 percent.

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