5 July 2019

Barr may boost infrastructure spending as economy slows

| Ian Bushnell
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ACT property sector

The ACT property sector is pessimistic post-election and would like to see more infrastructure spending. Photo: Glynis Quinlan.

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.


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HiddenDragon6:08 pm 07 Jul 19

What about giving top priority to the hospital which was promised at the last ACT election – the one mentioned in all the road side signs saying “we can have light rail and a new hospital”. Given the numbers of NSW residents likely to be served by that hospital, a contribution from the NSW Government and/or the Commonwealth should be pursued.

Serious spending (i.e. well beyond what is currently proposed) on social housing would also be worthwhile – not just for the homeless, but also for low paid workers who are finding Canberra increasingly unaffordable.

Actually a good way to improve the local economy would be to stop taking away everyone’s meagre disposable incomes with his ludicrous rises in rates and charges. It’s hardly surprising that nobody has any money to spend locally when the ACT Government helps itself to your pockets at a rate that quadruples the rate the luckiest of us are getting salary increases. And a lot of us wouldn’t even mind that so much if we got good services for the money they take.

michael quirk10:56 am 07 Jul 19

Infrastructure spending should be prioritized on the basis of the benefits projects provide to the community. Light rail should be assessed against other projects including those in housing, health, education and public transport. The slowing economy should not be used as an excuse to fund projects that do not stack up. The extension to Woden needs to assessed before it can be prioritized. The weakening ACT economy makes it even more important that limited funds are devoted to projects that provide the greatest benefit.

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