Chief Minister Andrew Barr may boost spending on infrastructure on top of that announced in the Budget as the ACT economy shows signs of slowing.
According to the latest ANZ/Property Council Survey, confidence and growth expectations are down post-election, in the face of public service cuts and falling forward work schedules in the property sector.
While the federal election result – which saw Labor’s property tax measures rejected – boosted confidence elsewhere, in the ACT the prospect of $1.5 billion in cuts to the public service to pay for the Coalition’s $1.4 billion worth of election promises, with the loss of 3000 jobs, has taken the wind out of the local economy’s sails.
The survey for the September quarter outlook, conducted online between 28 May and 14 June, found the pipeline of work had fallen to the lowest level in five years and expectations of economic growth were the lowest in the country.
Sentiment across multiple sectors – residential, office, industrial, retail, hotel and retirement – fell, with a pessimistic ACT also expecting national economic growth to decline, the only jurisdiction to do so.
The jobs outlook was also down, coming off record-high sentiment last quarter.
The Property Council’s ACT Executive Director, Adina Cirson, said the survey results showed the need for more investment in infrastructure.
Although the overall outlook remains positive, Mr Barr said that with interest rates at record lows the Government would consider extra borrowing and spending but would need to be balanced against the capacity to deliver within the ACT’s small infrastructure market.
“We have been calibrating our forward infrastructure program to take advantage of this opportunity to build for Canberra’s future now,” he said. “There are a number of significant projects which the government currently has under consideration which will add to this capital program in the coming months, including Stage 2 of Light Rail to Woden and other initiatives that will be outlined in the new Infrastructure Plan when it is released in September.”
Mr Barr said the Budget outlined the ACT’s largest-ever forward infrastructure program, with projects worth over $3 billion in the pipeline, and there was scope for those involving the Commonwealth to be brought forward.
The Government had also asked the Federal Government to waive the remainder of the Mr Fluffy debt but there had not been any response from Treasurer Josh Frydenberg.
“We are actively engaging with national and international capital markets in light of opportunities to refinance this, and other, government debts at lower interest rates to save millions of dollars in interest payments,” Mr Barr said.
He said, if needed, more measures to stimulate the economy would be considered in the mid-year budget update but stressed that growth was predicted to average 3.3 per cent per year over the next four years and employment and retail data was still strong.
Ms Cirson said that while the Budget included some welcome measures to speed up the development approval process and changes to the Lease Variation Charge regime, commercial rates went up by 6 per cent and the sector was keen to see the Government response to the recommended changes from the recent inquiry.
Mr Barr said the Government was carefully considering all of the committee’s recommendations and would respond shortly.
Ms Cirson said the Canberra region also needed greater commitment from the Commonwealth Government to infrastructure projects, including support for the next stages of the light rail network.
“Canberra’s growth has been just as significant as that experienced in our major capitals, but has been mostly overlooked by the Commonwealth,” Ms Cirson said.