The May budget is expected to include a legislated cap on government spending, the Business Roundtable said today.The business lobby group's executive director, Roger Kerr, said the cap initiative was foreshadowed in the December budget statement when Fin
The May budget is expected to include a legislated cap on government spending, the Business Roundtable said today.
The business lobby group's executive director, Roger Kerr, said the cap initiative was foreshadowed in the December budget statement when Finance Minister Bill English said that controlling growth of government spending should be a permanent feature of the economic landscape.
The National and ACT confidence and supply agreement also contained a commitment to aim towards a cap on core crown expenses, Mr Kerr said.
Currently the Government has a number of non-binding caps such as targets for debt and spending in comparison to GDP.
Mr English also has followed his predecessors in setting a cap on the amount of new spending in the budget -- effectively how much total spending will increase -- at $1.2 billion.
Mr Kerr said non-binding rules had been ineffective and had failed to reduce expenses below a target of 30 percent of GDP.
The Business Roundtable believed a spending cap should be binding -- subject to referenda and emergencies, and reduce government spending over time unless voters chose otherwise.
The 2025 taskforce on productivity suggested the Government implement the spending limits imposed in the US state of Colorado where spending is restricted to the rate of population growth plus inflation, unless voters agreed to an increase by referendum.
Mr Kerr said one such increase had been approved.
Hong Kong is committed to keeping government spending at or below 20 percent of GDP.
"Credible moves in the May budget to implement spending constraints and advance a tax payer rights bill will be a litmus test of the Government's commitment to faster growth and the goal of closing the income gap with Australia," Mr Kerr said.
Both a legal spending cap and tax payer rights bill are ACT policy.
