25 October 2022

Best to keep ACT expectations low for tough Budget, and beyond

| Ian Bushnell
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Senators Katy Gallagher and David Pocock

Finance Minister Katy Gallagher and Senator David Pocock, who needs to play hardball to make a difference for the ACT: Photo: Michelle Kroll.

It wasn’t supposed to be like this.

A Labor PM in the Lodge and a former ACT Chief Minister in the key Finance job would make all the difference for the Territory after those lean, hard years of election year crumbs under the Coalition yoke.

Even hard man Zed Seselja couldn’t make much impression on the government bean counters and political strategists who deemed the ACT just not worth too much largesse compared to those tight races elsewhere.

But with Seselja gone, David Pocock willing to play powerbroker in the Senate and Katy Gallagher with a hand on the till, it was supposed to be milk and honey days for the little Territory that could.

Surely the nation-leading jurisdiction with progress as its talisman would be rewarded for its virtues – and its wisdom in being a red wall and discarding the Liberals’ Dark Knight.

It was a nice narrative, but as often happens, political reality hijacked the dream.

Katy – I’m not Finance Minister for the ACT, I’m Finance Minister of the country – Gallagher broke our hearts over the $100 million housing debt, a long-held grievance that she was expected to remove.

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But now that the “grownups” (to quote Senator Gallagher) are in charge, there won’t be any deals done on the Senate floor – an unmistakable message to Senator Pocock, who may yet have the last laugh on that one.

Senator Gallagher’s backflip disappointed Andrew Barr, attracted derision from the Liberals and provoked Pocock to press on, reminding the government of the deciding vote he will have on certain legislation.

Also disappointing has been the way Territory rights legislation has been shuffled back in priority, and we’re still waiting.

The ACT has a long shopping list, from social housing funding to the lease of Commonwealth land for housing to light rail.

The recent pre-Budget infrastructure announcement barely mentioned the ACT and many thought it was a snub.

“Don’t worry,” soothed Member for Fenner Andrew Leigh. The ACT won’t be forgotten.

Well, the budget is upon us, and the ACT is no wiser about what could be in it for us.

And there is no reason to believe that, with the numbers looking so bleak, an election a long way off and Labor prepared to call Pocock’s bluff, that tomorrow night will be much different to the reduced expectations of the months since election night.

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The government might be saving up the good news for the budget, but it could be that Mr Barr is in for ongoing talks about the AIS and other land that could be turned over to the ACT for housing, along with the housing debt and other matters.

The fact is that in the greater scheme of things, this comfortable, safe Labor stronghold is not a priority.

That may only change when Pocock is prepared to play hardball and extract some serious concessions when it really counts.

In the meantime, it is probably time to declare the election honeymoon over and settle into a relationship where nothing can be taken for granted.

The ACT may eventually fare better under the Albanese Government but more realistic expectations are due.

In that way, we might be pleasantly surprised tomorrow night, and in the future.

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HiddenDragon9:08 pm 24 Oct 22

Given all the doom and gloom which is being talked about the structural problems in the federal budget, there are likely many more disappointments to come for the ACT, and not just over the housing debt (which seems to have become some sort of totemic obsession) and hoped-for squirts of cash for light rail etc.

The bigger risk will be to APS staffing and spending in Canberra if chronic budget pressures force the federal government to face up to the long-ignored issue of duplication and overlap between federal and state/territory/local government bureaucracies. Beyond the areas which are clear Commonwealth responsibilities under the Constitution, there are extensive bureaucratic empires which rest on the shaky ground of tied grants – the stroke of a pen could untie those grants and sweep away a lot of Canberra bureaucracy in the process.

Capital Retro11:25 am 24 Oct 22

The RBA, who got is so wrong about low interest rates, are now predicting house prices will fall 20% in the next 2 years. That is being irresponsible.

Well CR I think it is pretty clear that the rise in interest rates we have seen over the last number of months will reduce housing demand. This will also see a fall in housing prices over the long term. That is economics. Many people have overcommitted on properties during the good times of low interest rates. Housing demand soared during this time and people have taken on massive mortgages they can little afford if circumstances change. That’s the way the economy works!

Capital Retro2:28 pm 24 Oct 22

Indeed Jack, that is what happens normally but what happens when the 100,000 per month (98,000 last month) new Australians start looking for somewhere to call home?

The RBA didn’t mention that, did they.

Well CR what do you want the RBA to do about that, lower interest rates? What do you want the government to do, give the wealthy tax cuts and put the country into a spiral of debt like the UK government did? I care about people attempting to get into the housing market and those in homelessness but it is a complex issue and needs state and federal intervention. It also needs a lot of boldness from the government to take us into the future and make the necessary changes. These changes include removing tax credits to wealthy retirees which costs the country more than the health and education budgets combined. These tax breaks were implemented by the Howard government. It also includes making the necessary changes in taxation law to ensure that big business and multinationals pay their fair share of tax!

It also means the government being bold enough to make the necessary changes to negative gearing tax breaks for those investors which inhibits and places enormous pressure on those seeking to get into the housing market.

That’s not the RBA’s job. Housing and immigration is up to our Federal and State governments. The Federal government controls immigration, so needs to plan for it to work well, whilst working with the States and Territories. The RBA could mention the need, but it should be obvious to all governments and they should not be waiting for the RBA to tell them this.

Over the last few years, the Feds have paid little attention to anything the RBA has said except when it suited them. They ignored being told how things need to be shifted to increase wages. However, many listened to the RBA was when they said interest rates weren’t expected to rise and that caused chaos. They’d not heard earlier messages that interest rates would eventually rise it seems.

The Feds borrowed lots of money ignoring the reality that paying it back would be expensive as interest rates would rise eventually and were not getting lower so cheap money now would not always be cheap. They didn’t care as their thinking was short term for the country, but long term for them personally (knowing they’d not be in government to deal with it).

The RBA really has very limited ability to influence Australia’s economy, with interest rates the only lever.

Yes psycho over the last number of years (12 in fact) the LNP government has paid little attention to the RBA. The RBA and its board are also lacking in many respects but that is another story. We have a new government psycho and they need to be bold. The economic situation is dire at the moment thanks to the Morrison government. Our economy under this new government has a chance to overcome the crisis and the challenges ahead including a worldwide recession. The UK and US at the moment don’t look like they are in a position to overcome these challenges. I have somewhat confidence in Katy Gallagher and Dr Chalmers but I would like to see them going further as economists and media have been pushing for.

Capital Retro6:09 pm 24 Oct 22

I don’t recall ever the RBA saying “house prices are going to rise”.

What specific “tax breaks for wealthy retired people” are you referring to?

You are exactly right CR. I apologise unreservably. You seem to flip flop around on certain issues and I tend to skim over your comments. Sorry about that! I have revisited your comment. In my humble defence I did not read it thoroughly enough. But looking at it again your second sentence suggested to me that you believe that the RBA is being irresponsible in pushing up interest rates then them predicting that house prices will reduce over the next couple of years. Two different sentences with different meanings.

I am just all over the place at the moment with the budget being handed down in a number of days. I just seem to be in budget mode! It has been all over the media. Not to mention our very own Katy Gallagher doing wall to wall interviews! I don’t remember Zed going out of his way in promoting his party’s budgets. And can you believe the front page of the Canberra Times today! Delivered personally to my front door. There he was, our Treasurer, Dr Jim Chalmers, a Queenslander, on the front page out and about running around Lake Burley Griffin! Like shouldn’t he be back in the office helping Katy! Now I made a couple of suggestions above (pretty good I think) to get the budget back into shape. I remember Katy’s no-nonsense approach as Chief Minister and treasurer. I know Katy is busy at the moment but I hope she finds time to read my suggestions. Just hoping!!

Capital Retro8:15 am 25 Oct 22

Maybe we should both have a cup of tea, a Bex and a good lie down.

OMG CR a blast from the past!! The last time I saw a Bex box was at the Bowral museum! I remember Bex was all the rage amongst my mother’s friends all those years ago!

Anyone who expected any different from this mob needs to take a long look at themselves.

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