On first glance at the ACT's 2026-27 budget it would be easy to gain an impression of a cautious government making slow, steady repair to its bottom line and headed gradually out of the financial hole it has created for itself.
A delayed return to surplus of $244.2 million by 2028-29, thanks to global uncertainty impacting inflation, but small, prudent increases in key services including justice and policing, health and housing while keeping spending in check.
But looking deeper into the documents reveals an economic recovery built on shaky foundations and heroic assumptions that could lead to a very different outcome to the picture painted by Treasurer Chris Steel on Wednesday.
On the same day that US forces launched fresh bombing attacks on Iran following the downing of a US helicopter near the Strait of Hormuz, and eight people were killed in Lebanon as Israel told an entire city to evacuate, the ACT was basing its forecasts on the assumption of an easing of tensions in the Middle East, oil prices peaking around $US100 a barrel in the June quarter and then starting to fall rapidly to $US75 per barrel by late 2027.
Even the ACT's own papers warn of a darker economic scenario not reflected in the headline figures. A downside alternative scenario that assumes the oil price increases to $US150 a barrel and remains high through 2027 would see household spending power drop, costs to small businesses climb, particularly in relation to fuel and transport costs, and ultimately lower economic activity and businesses forced to cut back on staffing and spending costs.
Clearly chastened by independent economist Saul Eslake's excoriating assessment of the ACT's decade of over spending and under earning, the ACT has sought to impose a financial handbrake on itself by attempting to prevent debt from growing beyond 19 per cent of gross state product. The budget also confirms previously flagged delays to infrastructure spending.
That so-called 'reprofiling' of infrastructure spending on projects worth less than $25 million that are not already close to beginning in reality appears to mean pushing out smaller, less flashy maintenance projects into future years. The risk of doing so is twofold, first scrimping on those works now could lead to larger, remedial works required in the future, and higher inflation will see the final bill for those works rise even higher. In short, we could be facing more potholes and cracked pavement that takes longer to fix and costs us more in the long run.
Even the ACT's own papers warn of a darker economic scenario not reflected in the headline figures.
All this is not to say the economic plan presented on Wednesday is without merit. Extending stamp duty exemptions to first home buyers and setting ambitious targets to create 30,000 more homes by 2030 will go some way to alleviating the acute and urgent housing shortages currently making the Territory increasingly unaffordable - assuming, of course, those homes can actually get built.
The dumping of a widely despised health levy will also be welcomed but will be countered by rises in the Police, Fire and Emergency Services and the Safer Families levies. Families are also facing another 5 per cent hike to their rates bills.
There are two ways this budget could ultimately pan out. If everything lines up as hoped, we could well be on the first step to recovery.
But reality is often messier. If the war drags on or we get hit with other pressures on the public purse, the assumptions of the 2026-27 ACT budget may appear far too optimistic for the uncertain times in which it was conceived.
