The ACT needs more Treasury officials to track and rein in public spending, which has consistently grown faster than revenue and left the territory in a fiscally unsustainable position, a parliamentary inquiry has found.
The final report from the inquiry into the ACT's fiscal sustainability called for more transparent budget information and a more active pursuit of Commonwealth funding, but warned against raising taxes on Canberrans.
"While it may be counter intuitive in this report to suggest additional spending, better resourcing for Treasury should generate a significant return in better financial management across the ACT public sector," the inquiry report said.
But the government should also constrain employment growth in the public service and focus on preserving frontline services.
The committee echoed a report it commissioned from independent economist Saul Eslake, finding the ACT's financial position was not sustainable.
"Moving forward, the ACT government should be transparent with the people of the ACT about the magnitude of the current fiscal problem, particularly through the provision of accurate and realistic budget forecasts," the committee's report said.
"It will also be important to provide a plausible pathway to budget repair to best position the government to respond effectively to future economic shocks."
Infrastructure spending had contributed significantly to the growth of government debt and the government needed to better prioritise its projects.
"The committee finds that investment in infrastructure should support city-wide priorities and local community infrastructure that enhances well-being, social connection, and access to services," the inquiry report said.
The government should also examine increasing taxes on gambling revenue, prioritise finding savings in the public health system and ensure enough public housing is available to meet the population growth.
The inquiry found the government was not doing enough to strategically seek Commonwealth funding and recommended an overhaul, including encouraging the ACT to seek extra general revenue assistance funding and a waiver of the territory's historical housing debt.
The ACT should advocate to reverse the 2018 changes to the goods and services tax revenue distribution and calculate the amount of payroll tax it is constitutionally unable to collect from federal government staff, the inquiry said.
Chief Minister Andrew Barr said the Assembly now needed to move beyond a political culture demanding new spending without finding ways to fund it.
"The era of simultaneously demanding more infrastructure, more services, lower taxes and lower debt must come to an end," Mr Barr said.
The select committee was established after the Liberals and Greens teamed up to drive the inquiry in late 2025, before the parties began serious talks about forming a government together and ousting ACT Labor.
The government has since pointed to improvements in the budget position, including a net operating cash surplus delivered a year earlier than expected, as signs its fiscal strategy is working to repair the bottom line.
The chair of the select committee, Greens leader Jo Clay, said the territory government had not been transparent about where and how it spends its money.
"ACT Government is not setting the right priorities. The Greens are worried about our community now and our ability to meet future shocks. COVID and climate change-related disasters - fires, floods, hail and smoke - show that we need to prioritise community care and careful resource management," Ms Clay said in additional comments appended to the inquiry report.
"Canberrans need our fair share from the Commonwealth. We need better advocacy and better delivery from the ACT and Commonwealth governments."
The Liberals' Treasury spokesman, Ed Cocks, said the landmark inquiry report laid bare the extent Labor had betrayed the trust Canberrans placed in them to manage the economy.
"If the ACT cannot tax its way back to fiscal sustainability, then the government has to confront the expenditure side of the budget," said Mr Cocks, who sat on the select committee.
"That does not mean indiscriminate cuts to services. It means being much clearer about what government is spending money on, what Canberrans are getting in return, and whether existing spending is delivering value."
Treasurer Chris Steel said the report identified no specific savings and called on the government to spend more.
"Process answers don't deal with the core questions about what Canberrans need, and want to fund. The Canberra Liberals should be up front about where they want to cut the public service, and what services they want to defund," Mr Steel said.
"The government has set out a clear and measured pathway to return the budget to balance and surplus over the forward estimates with a revised fiscal strategy and will continue to make progress in each Budget over this parliamentary term."
Independent Fiona Carrick, who sat on the committee, said she was concerned by the lack of transparency over planned savings from the capital works budget.
"The government has not disclosed which projects have been delayed, despite repeated requests during the fiscal sustainability inquiry and estimates hearings," Ms Carrick said.
"The community deserves to know what projects are being pushed back and what that means for local infrastructure."
Labor's Taimus Werner-Gibbings, who replaced Caitlin Tough on the select committee in its final stages, said the report was "earnest, well-researched, timid and hackneyed".
"It is not that this report misunderstands the ACT's fiscal position. To a significant extent I find that it has. The fundamental problem lies in its refusal to follow its own analysis to the necessary conclusion," Mr Werner-Gibbings said.
"A credible fiscal strategy has to choose. This report does not."
