The ACT is bracing for a possible hammering in the first Tony Abbott federal budget on May 13.
Presenting the annual state of the territory address, ACT chief Minister Katy Gallagher said her government awaited with interest the federal government's commission of audit and the budget.
"It goes without saying that my team and I have planned for various scenarios from the federal budget and prepared ourselves to act where intervention is warranted," she said on Thursday.
A tough federal budget could hit Canberra hard, especially significant further job losses in government departments and agencies and cuts to direct funding of some programs.
Ms Gallagher said the ACT Budget could respond to federal belt-tightening but not savage austerity.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"The Commonwealths public service workforce is three times the size of our own and we cannot absorb large redundancies," she said.
Ms Gallagher said she remained cautious about ACT prospects and took heart that the fundamentals had remained strong in the two years since contractions in federal spending began in earnest under Labor.
Forecast economic growth for 2013-14 remained unchanged at 1.75 per cent, employment growth was slow but steady and retails trade figures were positive.
"The fact that unemployment remains at 3.8 per cent, the lowest in the country, is helping keep other economic vitals such as housing and retail activity in shape," she said.
