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An extra $2 billion in spending to hold power?

By johnboy 9 November 2012 7

Zed Seselja is turning the costings table by looking at the treasury costings of Labor adopting the Green policy platform:

“During the election, Labor promised hundreds of millions of dollars in spending. That was added to by the list of projects in the agreement signed with Shane Rattenbury. We have used the costings undertaken by Treasury, and taken out doubled up costs such as Light Rail to get a fair and complete picture of the costs. Combined, the promises total a staggering $2 billion.

“That’s about half the entire budget of the ACT, or about the equivalent of the entire health and education budgets combined.

“It’s an amazing amount to pay and Canberrans have a right to know just what the price of power was in this process.

“Worse still, the $2 billion price tag comes before paying off any of the debt or deficits, themselves hundreds of millions of dollars.

UPDATE 09/11/12 16:43: Andrew Barr is not impressed by Zed’s figuring:

Zed Seselja’s analysis on the cost of ACT Labor’s election commitments looks like it was written on the back of a drink coaster – after a few too many beers.

It beggars belief that a party that forgot to include CIT in its education policy, couldn’t figure out whether their health plan was over four years or five, and failed to submit their $7 billion health and $3.6 billion education policies for independent scrutiny, would try to take the moral high ground on costings.

First, the budget impact from the election commitments made by Labor and from the parliamentary agreement is $68 million in 2013-14.

Second, in the 2012-13 Budget there is a provision for capital works of about $190 million – against which the election commitments of ACT Labor (and other parties) was allocated.

Third, light rail will be funded in partnership with the private sector. The cost won’t be met upfront from the ACT Budget, and will be spread over the life of the project. In addition, the Government will receive offsetting revenue – such as from redevelopments along Northbourne Avenue – which will help fund the project.

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7 Responses to
An extra $2 billion in spending to hold power?
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dungfungus 7:20 pm 13 Nov 12

This is how Labor’s plan to fund the excessively expensive Capital Metro light rail project could end up.
Apparently the volume of motor traffic on BrisConnections Airportlink has only been half of what was required to make it viable:

This PPP with the Queensland Government, which gave BrisConnections a concession to, among other things finance, operate and maintain AirportlinkM7 for a period of 45 years (from 2008 to 2053).
BrisConnections is a stapled trust, which is listed on the Australian Securities Exchange (ASX) under the code BCS. It is the owner and operator of AirportlinkM7.
The PPP is a contractual arrangement between the Queensland Government and BrisConnections which harnesses the technical and financial skills and capability of the private sector to design, construct, operate, maintain and finance AirportlinkM7.
PPPs are not unusual and are a means of providing infrastructure without government cost as Mr Barr has pointed out. What Mr. Barr hasn’t told us is what happens when things don’t work out as planned.

If the ACT Government can’t find an alternative light rail solution with dramatically lower costs that can be funded and operated by the Territory alone (it is possible) then the Capital Metro project should be abandoned.

Chop71 9:48 am 12 Nov 12

Mr Barr = Throw as much mud as you can to try and diffuse the situation.

It’s @#$%’en expensive to live in this town.

Spiral 6:16 pm 11 Nov 12

As if anyone would believe that even half the promises would actually be delivered.

Political promises before an election are like spruikers outside strip clubs promising drunk morons that the girls inside are cleaner and more buxom than their competitors.

If you believe them, I’m sure they have a light rail system to sell you (I think the bridge was bought by the gullible public last election and never delivered).

dungfungus 10:03 pm 09 Nov 12

Indeed the PPP which Mr Barr refers to (and which the ACT has not ventured into before) is usually funded privately however a PPP of the type that is used for transport infrastructure usally means that the government may support the project by providing revenue subsidies, including tax breaks or by removing guaranteed annual revenues for a fixed time period. The suggestion that the government could receive “offsetting revenues” from new developments along the route is pure speculation.
In other words, ACT Labor+Green is promising us another ACTION financial model which currently costs the ratepayers about $100 million a year in subsudies. Don’t forget either that the big Civic to Gungahlin $615 million light rail plan also includes additional ACTION bus lanes and a new bus fleet to cost $276 million dollars extra. It will be interesting to see if ACTION drivers are receptive to working under the control of the PPP equity partners.
It is becoming apparent that the PPP model, which appears to be a carbon copy of the Gold Coast’s new light rail project which is to service a population of 530,000 people over 13km with 16 stations, is not the one for 11 km of track Canberra proposal servicing about one third of the Canberra population. There are more attractive light rail systems for what is planned at substantially less cost and they could be integrated with ACTION (rather than compete with them). The funding could be managed by the Territory alone. Meanwhile, Labor+Green plan to waste another $30 million on yet another
Zed should be focusing on this.

JessP 9:41 pm 09 Nov 12

They could just increase the rates we pay.

Oh thats right, they already thought of that.

housebound 5:54 pm 09 Nov 12

johnboy said :

Andrew Barr is showing few signs of a kinder, gentler polity.

This is a typical response from Barr – it usually means the accuser is right. Quite a few people have been on the receiving end of these vicious but lame counterattacks. They are a bit of a badge of honour in some circles.

johnboy 4:44 pm 09 Nov 12

Andrew Barr is showing few signs of a kinder, gentler polity.

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