Living cost relief, housing top ACT's budget priorities

Targeted cost-of-living support for apprentices and other stretched groups feature in ACT's pre-election budget the opposition says does not go far enough to ease hip-pocket pain.

Handing down his 13th budget as the territory's chief minister on Tuesday, Andrew Barr said the economy was slowing and many parts of the community were enduring living costs pain.

A collection of "targeted" cost-of-living measures were included in the ACT's final budget before an election in October, such as one-off $250 payments for apprentices and trainees.

ACT Chief Minister Andrew Barr
Andrew Barr's 13th budget as ACT chief minister is the last before Canberrans head to the polls. (Lukas Coch/AAP PHOTOS)

Energy rebates for low-income households have been bumped up by $50 in this financial year and the next, and the rent relief fund will be extended to more low-income households in financial hardship.

Canberra Liberals Leader said Elizabeth Lee said the budget contained "little to no relief" when compared with the opposition's $65 million cost-of-living package.

"Andrew Barr has spent over a decade increasing rates and taxes at a rapid rate to the point where many Canberrans are struggling to pay the bills," Ms Lee said.

Sour economic conditions, high infrastructure and labour costs, and cost-of-living support measures have led to a bigger-than-expected deficit of $830.8 million estimated for 2023/24, heftier than the $442.7 million forecast at the last budget.

Deficits are then expected to shrink in the following two years before public finances claw back into the black in 2026/27, when a $79.7 million surplus is predicted.

Economic growth is also expected to slow, from three per cent in 2023/24 to 2.75 per cent in 2024/25.

Growth is then tipped to gradually return to long-run average of 3.75 per cent by 2027/28, as the household sector recovers and home-building picks up as interest rates fall, incomes improve and the population swells.

"While there are risks to the economic outlook associated with uncertainties around inflation and interest rates, the ACT economy remains robust and the outlook for economic activity is positive," the budget papers said.

Commonwealth Avenue in Canberra
The Australian Capital Territory budget predicts a return to surplus in the 2026/27 financial year. (Mark Graham/AAP PHOTOS)

The ACT's population has been growing quickly but the pace is expected to pull back, in line with lower forecasts for nationwide net overseas migration.

Still, Canberra's population is expected to reach the 500,000 mark by 2027, and growing its housing stock at a faster rate remains a government priority.

More than $285 million will be spent on housing over four years, including an extra $20 million for a fund to boost the supply of affordable rental and community housing.

Stamp duty exemptions will also be expanded and more dwelling sites are set to be released.

Despite higher interest rates and surging construction costs weighing on building activity, housing supply is tracking "marginally" ahead of population growth.

"This will support an increase in rental vacancy rates and an easing of growth in rents and purchase prices," the budget papers said.

ACT Greens leader Shane Rattenbury said a Greens-led budget would have looked different but there was a lot to celebrate.

"Under the leadership of the Greens, the ACT is driving a nation-leading transition off fossil-fuel gas, complementing our 100 per cent renewable electricity," Mr Rattenbury said.

But he said the Greens would have liked to have done more to ease living pressures and solve the housing crisis.

The territory has a solid infrastructure agenda, with $8 billion in total to be invested in public transport, hospitals, sporting facilities and other projects over five years until 2028/29.

KEY BUDGET MEASURES

* ACT to continue its drug-checking service, an Australian first

* Affordable Housing Project Fund boosted from $60 million to $80 million

* Income threshold for Home Buyer Concession Scheme increases from $180,000 to $250,000

* Funding for a pilot community electrification program, providing grants for electrification upgrades to up to 350 eligible households

* One-off $250 payment to support local apprentices and trainees

* Electricity, water and gas rebate for low-income households upped from an annual rebate of $750 to $800

* Value of vouchers available through the utilities hardship fund will be upped to a maximum of $300 per household

* $920 million over four years for new health spending, including works to complement the construction of the new North Canberra Hospital

* $100 million over four years for new education measures, including increased support to the Future of Education Fund which provides yearly one-off payments to low-income Canberra families

* For the first time, the budget included a wellbeing statement with six priority areas: housing; physical and mental health; women; early years; cost of living; and addressing marginalisation and disadvantage.