2019-20 ACT Budget labelled 'shrill' and too political

The Pegasus Economics report - commissioned by the Select Committee on Estimates - said the political commentary in the 2019-20 territory budget was unbecoming for a small jurisdiction that wanted to be taken seriously.

The report said the government's projected return to surplus in 2021-22 - after a deficit in 2020-21 - would be reliant on finding savings and minimising new spending.

Mr Barr rejected the report's criticisms about the budget's tone.

"I don't believe so. The same could be said about Pegasus' commentary on this matter," he said, when asked if the budget's tone was too political and shrill.

The report backs up the analysis of former treasury executive Khalid Ahmed last week, who labelled the government's forward estimates "quite heroic" and unlikely to be achieved.

Pegasus Economics said the federal Coalition's "fiscal restraint" made the government's predictions about employment and wage growth and surplus predictions optimistic.

But it came in contrast to a report from S&P Global ratings, who said the Commonwealth's proposed cuts to the public service posed little risk to the ACT's economy.

The Pegasus report said the "shrill" political tone in the budget was a new feature this year, in particular the numerous references to the federal Coalition government.

It said the budget papers had a contradictory tone, at times calling for more engagement on the part of the Commonwealth with the states and territories.

"It appears rather incongruous for the ACT government to be both disparaging as well as demanding greater engagement on the part of the Commonwealth government," the report said.

"The political commentary in Budget Paper 3 is unbecoming for a small jurisdiction that wants to be taken seriously."

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Budget figures for 2019-20 around ACT final demand, employment growth, population growth, the wage price index and forward estimates might be optimistic, the report said.

There were a number of reasons for this, including Commonwealth government fiscal restraint as well as ACT government tax reform.

The report said a return to surplus would rely on the government finding savings or minimising new projects.

"The estimated 2021-22 surplus would be at risk in the event of unexpected spending pressures or shortfalls in revenue," it said.

Pegasus Economics said the budget was based on assumptions about the future level of Commonwealth spending in the ACT.

It said the government was being overly optimistic when it predicted population growth of 1.75 per cent in later years, especially considering federal public service job opportunities would likely dwindle.

"Population growth in the order to 1.25 to 1.5 per cent may be more realistic," it said.

The government's ongoing tax reform agenda - which is phasing out stamp duty and replacing it with a new general rates system - is another risk to population growth, the report said.

It said the government needed to be careful people didn't move over the border to NSW in search of lower rates.

Mr Barr said the budget provided a clear picture of the challenges and constraints facing the ACT's finances.

"The significant under-investment by the Commonwealth during six years of rapid population growth is one of the important factors influencing the ACT's budget, and Canberrans would rightly expect that we call this out and advocate for a fairer share," he said.

He said Pegasus Economics had made similar comments about employment and population growth in each of its annual review reports for the past few years

"The ACT's budget estimates have proven to be accurate - and in some cases actually underestimate the levels of growth - on each occasion," Mr Barr said.

"The surplus position presented in the out years of the budget are underpinned by the revenue and expenditure also outlined in the Budget. There are no further savings required to achieve the surpluses presented."

Opposition leader Alistair Coe said the politicisation of the budget showed the government "desperately want someone to blame" for cost of living pressures.

"Rather than shifting blame and using public resources to advance a political agenda, I think Canberrans would much rather the ACT Government focus on essential services," he said.