ACT budget deficit blows out by $53 million excluding Mr Fluffy asbestos buyback scheme: Government

The ACT budget deficit has blown out by $53 million, even before the effect of the Mr Fluffy asbestos buyback scheme is taken into account, the ACT Government has announced.

The mid-year budget review revealed the predicted deficit for the 2014-15 financial year had more than doubled from $332.8 million to $770.5 million.

Excluding the Mr Fluffy buyback and compensation scheme, there had been a $53 million deterioration in the deficit, almost all due to changes in the value of superannuation investment, the Government said.

ACT Chief Minister Andrew Barr said the budget was still on track despite the financial hit.

"All of the other parameters are largely in line with what we forecast at budget time," he said.

"And that we maintain a steady path in terms of managing both the Mr Fluffy issues and the budget more broadly, particularly our trajectory back to a balanced budget in the coming years.

"Noting of course that their are a range of factors, both national and international, particularly decisions of the Federal Government that can and do impact on the Territory budget."

The latest budget figures showed an economy that, as expected, had been hit by Commonwealth job cuts.

The rapid decline in public service jobs has weakened the Territory's labour market and contributed to the lowest retail trade growth in the country.

But Mr Barr said the budget was still expected to return to surplus in three years time.

The budget review predicted a deficit of $249.8 million in 2015-16, easing to $22.8 million in 2016-17, but returning to a surplus of $80.4 million in 2017-18.

There were $11 million of generalised savings listed in the forward estimates, which will include putting more services online.

"These are decisions that we are foreshadowing, and we are giving early notice in the context of the next budget that we will be looking for savings," Mr Barr said.

"We have a process underway at cabinet level through the Expenditure Review Committee looking at areas where we can deliver services more effectively, where we can use new technologies and there were a number of initiatives that have already been rolled out in the last two budgets that have savings associated with them.

"And that goes particularly to our digital Canberra agenda where we are looking to significantly reduce our transaction costs associated with the day-to-day transactions that Canberrans have with Government."

ACT Opposition criticises low spending estimates for election year

The Opposition criticised the Chief Minister for blaming extenuating circumstances for the weakening state of the budget.

Shadow Treasurer Brendan Smyth said Mr Barr has delivered a continuing line of budget deficits.

"Not withstanding Mr Fluffy impacts the financial position has deteriorated another $50 million," he said

We know that net debt is up, we know that net liability is up and we know that the net worth of the Territory has deteriorated some $400 million and there is no path to surplus and certainty in these documents.

"If you look at the budget that will be delivered for the election year, the Chief Minister is saying there will only be an additional $24 million expenditure but their record over the last 14 years is hundreds of millions of dollars of additional expenditure."

Full cost of Mr Fluffy buyback scheme outlined

ACT Chief Minister and Treasurer Andrew Barr said the Mr Fluffy scheme alone contributed an additional $384 million to the predicted 2014-15 deficit of $770.5 million.

The Government said only 75 per cent of the 1,000 homes would be purchased this financial year, with the remaining 25 per cent affecting the budget next financial year.

At the end of the Mr Fluffy scheme, it was predicted the Government would still be $300 to $400 million out of pocket.

In October 2014, the Federal Government agreed to lend the ACT Government $1 billion to buy back and demolish the properties affected with loose-fill asbestos.