28 July 2014

Canberra is doomed

29 July 2014 | 22Years

Have the changes brought about by a Federal Liberal Government and an increasingly broke and desperate Labor/Green Alliance, started to sink home to Canberrans yet?

I can remember so many years ago when the same sort of looney left Labor and Green Alliance took over in Tasmania, promising a change of culture (to the left) and increased economic security in the future from a ‘new way’ and renewavble energy and tourism.

And what did Tasmania become after 12 years of that rubbish? The economic basketcase of Australia that was almost destroyed in the GFC and an economy that will take another 10 years to recover – if they ever do.

The certainty of employment that the APS (and ACT PS) has provided to Canberra, will probably remain in the future, but it will be significantly reduced in its ability to shield Canberra anymore, like in did with the GFC. The future of this town is very much at a nexus – it could go either way over the next 5-10 years. To believe things will remain the same and that just like after Howard in 1996, this town will recover, is at best otpimistic and more realistically is delusional.

What Canberra needs is exactly what Tasmania failed to do, and that is to foster economic development through business ventures, and not to be totally biased against the benefits of a business sector, and to believe that Government money is a never ending magic pudding.

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HiddenDragon6:59 pm 04 Aug 14

dtc said :

So what ‘red tape’ does Canberra have that other places dont have? Other than the ‘tripling rates’ thing that people hold up as causing all of these issues.

Secondly, if you are running a business, the no 1 or maybe no 2 (depending on the business) key factor for you is staff. Do you have sufficiently skilled staff. Wonder why IT companies arent set up in Byron Bay or high tech component manufacturers on cheap land in country towns?

Canberra has plenty of skilled people but finds it hard to attract people to move here outside of the government, we are cheaper than the other major cities. Our location at times is an issue (transport, esp overseas) and we do have limited land availability for certain industries. But there is no particular reason why Canberra cant have more non govt private sector work; its just that its never been a focus/need to date and its not perceived as a valid choice (over, say, Sydney).

Whether that mindset will ever change who knows; at some stage the downsides of living in sydney will get to enough people, but they may well move to Newcastle instead of here.

I agree with davo in a way – imagine how different Canberra would be had it been placed at Jervis Bay or anywhere on the coast really. It would be much bigger and with much more private sector; people would come to the town voluntarily instead of reluctantly.

We probably gain some benefits from having local and state governments combined here, but too often, we seem to get the worst of both worlds – the petty-mindedness of local government (at times, zealously enforced with the resources of a larger bureaucracy), and the imperious and out-of-touch attitudes of a state government, cossetted in the CBD and remote from much of suburbia and the regions. In the latter case, that is no mean feat, considering that we have a blink-and-you’ll miss it CBD and that the entire Territory is postage-stamp sized by Australian standards.

I think a lot of the problems go back to a bureaucratic mentality which is understandably part of the “Canberra DNA”, and the closely associated assumption that the true economic role of government is to raise revenue, rather than to facilitate the creation of income and wealth from which a reasonable level of government revenue can be derived. The effort and creativity (such as it is) goes largely to the former, with the latter an after-thought, and an add-on for presentational purposes.

All of that said, I agree with your final point – had Canberra been set in a location with more obvious appeal to a wider range of people as a place to live and work, it would very likely have a larger, more diverse and sounder economic base.

dtc11:35 am 04 Aug 14

But most of those South Coast issues are small town issues, not coast issues. Same problem if you headed off to a small inland town.

I dont work in the APS and this is how our staff recruitment goes

1. hire someone who lives in Canberra or who recently graduated from a Canberra Uni
2. they move to Sydney
3. we try to hire more people in Canberra, but they dont exist
4. we try to hire people from interstate.
5. if they have family reasons to move here, then sometimes they do
6. no one moves here for any other reason.

dungfungus5:41 pm 03 Aug 14

Maya123 said :

dtc said :

I agree with davo in a way – imagine how different Canberra would be had it been placed at Jervis Bay or anywhere on the coast really. It would be much bigger and with much more private sector; people would come to the town voluntarily instead of reluctantly.

I have never understood this fixation with living on the coast. I grew up in mainly inland towns and rarely saw the ocean. I enjoyed it when I did, but have always considered it a fun place to visit occasionally, but have never wanted to live near it. I am willing to accept that I might be in the minority, but still I wonder if being near the ocean is overrated.

Well, you are not in the minority in the house I live in because we endorse exactly what you say.
I know a few people in Canberra who have retired and they can’t wait till they move down to the south coast. Then in about 6 months they are gravitating back to Canberra.
Some reasons for the disappointments that retirement on the coast have given them is you have to wait up to 2 years to get a private GP (you take your place on the waiting list for someone to die) and if you have medical problems and you need a specialist you will be referred to a Sydney hospital/specialist.
Regarding entertainment, there are few live cultural performances and few movie theatres. Pet dogs get ticks, cars rust etc. Most of your friends are back in Canberra and retirement is the wrong time in life to start new friendships.
In Canberra, you can travel to all points on the compass; on the coast you almost lose half those choices.

Maya12311:31 am 03 Aug 14

dtc said :

I agree with davo in a way – imagine how different Canberra would be had it been placed at Jervis Bay or anywhere on the coast really. It would be much bigger and with much more private sector; people would come to the town voluntarily instead of reluctantly.

I have never understood this fixation with living on the coast. I grew up in mainly inland towns and rarely saw the ocean. I enjoyed it when I did, but have always considered it a fun place to visit occasionally, but have never wanted to live near it. I am willing to accept that I might be in the minority, but still I wonder if being near the ocean is overrated.

dtc11:20 pm 02 Aug 14

So what ‘red tape’ does Canberra have that other places dont have? Other than the ‘tripling rates’ thing that people hold up as causing all of these issues.

Secondly, if you are running a business, the no 1 or maybe no 2 (depending on the business) key factor for you is staff. Do you have sufficiently skilled staff. Wonder why IT companies arent set up in Byron Bay or high tech component manufacturers on cheap land in country towns?

Canberra has plenty of skilled people but finds it hard to attract people to move here outside of the government, we are cheaper than the other major cities. Our location at times is an issue (transport, esp overseas) and we do have limited land availability for certain industries. But there is no particular reason why Canberra cant have more non govt private sector work; its just that its never been a focus/need to date and its not perceived as a valid choice (over, say, Sydney).

Whether that mindset will ever change who knows; at some stage the downsides of living in sydney will get to enough people, but they may well move to Newcastle instead of here.

I agree with davo in a way – imagine how different Canberra would be had it been placed at Jervis Bay or anywhere on the coast really. It would be much bigger and with much more private sector; people would come to the town voluntarily instead of reluctantly.

rommeldog5610:12 am 02 Aug 14

milkman said :

It’s very simple. A business has costs of delivery, costs of risk, contingency and profit, and all need to be accounted for. When you have lots of government red tape, high cost of living and a (generally) well paid local population, prices are high.

Well said. It is simple. So, why does the ACT Gov’t continually not get it re their own contributors to the high cost of living/conducting business and employing staff in the ACT ? The potential tripling of Annual Rates (including Commercial Rates) and repaying the massive principle and interest for the supposedly necessary infrastructure stimulus package, Gov’t charges/red tape and “investments” in projects like the Light Rail (which, as far as I can tell, wont help grow the economic base here) really are self destructing for the ACT economy.

If the potential tripling of Annual Rates here really is “revenue neutral” as the ACT Govt claim (but wont release the figures to prove that !), then all they have done is to increase the cost of setting up a business in the ACT and employing Canberrians ’cause it artificially inflates the cost of living here (= need for higher wages).

A few commentators on here claim that the potential tripling of Annual Rates is the best decision this ACT Govt has ever made because it guarantees future revenues.

In years to come, you will find that it is in fact one of the worst decisions ever made in this place (and that’s saying something !) as business growth is driven across the border and Canberra based labor force becomes too expensive to employ.

milkman10:10 pm 01 Aug 14

It’s very simple. A business has costs of delivery, costs of risk, contingency and profit, and all need to be accounted for. When you have lots of government red tape, high cost of living and a (generally) well paid local population, prices are high.

HiddenDragon5:50 pm 01 Aug 14

dianak said :

I agree with the author, Canberra is just too hard to operate a small or startup business mainly because of the huge amount of legislation controlling every aspects of our lives here, but more simply because of the cost of living, rates, water, electricity, food and petrol. Anything other than basic services is just not viable without paternal government grants to keep you afloat. It’s just amazing how ignorant many Canberrans are of our relatively high living costs due to government over spending and over taxing. They only start to realise this when their public service jobs are on the line, but too late to make a difference by then.

The software business is controlled by multinats and most of their staff are brought in from overseas on working visas to reduce costs, obvious to anyone who’s been in the public service in recent years.

The nanny state government programs, sponsorships and advertisements make it feel like you’re living in some eastern block communist state with big brother showing you how to tie your shoelaces.

I’ll be moving my business interstate in the next few months simply because the costs analysis has showed Canberra is not all it’s cracked up to be by this socialist government. As iron Maggie once said “The problem with socialism is that eventually you run out of other people’s money”. I wonder how many of our MLA’s have ever run a successful business?

The relatively high living costs in Canberra can also be attributed – in part, at least – to the tendency of some businesses to set their prices on the assumption that they have a captive, well-heeled market. Such businesses would, in turn, probably point to the high government-imposed costs of doing business in Canberra. One way or another, it doesn’t add up to a conducive environment for those businesses which actually have to compete with peers based in more business-friendly locations.

dianak1:58 pm 01 Aug 14

I agree with the author, Canberra is just too hard to operate a small or startup business mainly because of the huge amount of legislation controlling every aspects of our lives here, but more simply because of the cost of living, rates, water, electricity, food and petrol. Anything other than basic services is just not viable without paternal government grants to keep you afloat. It’s just amazing how ignorant many Canberrans are of our relatively high living costs due to government over spending and over taxing. They only start to realise this when their public service jobs are on the line, but too late to make a difference by then.

The software business is controlled by multinats and most of their staff are brought in from overseas on working visas to reduce costs, obvious to anyone who’s been in the public service in recent years.

The nanny state government programs, sponsorships and advertisements make it feel like you’re living in some eastern block communist state with big brother showing you how to tie your shoelaces.

I’ll be moving my business interstate in the next few months simply because the costs analysis has showed Canberra is not all it’s cracked up to be by this socialist government. As iron Maggie once said “The problem with socialism is that eventually you run out of other people’s money”. I wonder how many of our MLA’s have ever run a successful business?

dungfungus12:49 pm 01 Aug 14

HenryBG said :

Funny how your political slant on this fails to take into account the gas-fired power station and Data Hub we never got, blocked by the ACT Liberals and the NIMBYs of Macarthur……

http://the-riotact.com/dirty-energy-power-plant-in-canberra/7358

Here was a project that would have created employment and infrastructure and attracted further business to the territory – but no, some sort of looney-right alliance had to stop it from happening.

So we lost this proposed development to whom and where?
One of the JV partners in this folly was Galileo Connect who have a DA approved in a business park in Sydney for 3 similar sized data centres (no gas fired power stations) but that is as far as it apperas to have developed.
The Canberra Technology City concept (data storage and natural gas fired power station) was another speculative ActewAGL proposal hot on the heels of their foray into TransACT which ended up costing ACT ratepayers over $50 million.
They were also going to build another facility at Belconnen (what happened to that I have no idea) and a gas fired power station at Williamsdale (fate of that one also unknown).
I think you will find that the real reason none of these projects proceeded was that ActewAGL finances were already stretched and the Cotter dam upsize was more urgent.
The Cotter project has since been completed at a massive cost overrun and along the way ActewAGL managed to blow several more milllions on “A Better Place” ( what a misnomer that one turned out to be).
A separate data centre and solar power thermal power station development was proposed a year later by a consortium of Sanctury Energy, Wizard Power and Springfield Land Corporation on land nearby.
It has failed to materialise. Data centes are not big employers by the way.
Of course there was a lot of local opposition to the CTC proposal. It was to be located between the exiting Mugga Lane garbage tip and the compost factory and both of these facilities already send their odours to residents of Fadden, Gilmore and Macarthur. The threat of massive volumes of greenhouse emissions travelling on the same air currents was a real health risk.
In the end these data centres they were only “thought bubbles” of a few people who who had more power than business experience and access to other people’s money (that is code for you and I).
We should consider ourselves lucky.

dungfungus8:44 am 30 Jul 14

rommeldog56 said :

Hosinator said :

Canberra should focus on its strengths, a well educated population and our location.

Mark makes a good point that when you no longer have cheap labour you need to turn to entrepreneurialism.

Mark of Sydney said :

Now it’s about the availability of skills or cheap labour. Canberra has the first if not the second, but it does need to become more entrepreneurial.

Small to micro manufacturing. We are well placed between Sydney and Melbourne to produce niche products or mass market ones through the use of technology, small scale manufacturing equipment, lasers, 3D printing etc.
A friend of mine has recently set up a micro manufacturing business in Sydney based on a recent trip to Europe. He can’t fill orders fast enough, and is now considering moving into manufacturing one of the major secondary components himself, just so that he can keep up with demand.

Germany is a good example of an intelligent and entrepreneurial country where labour costs are high, so to get around this they use machines rather than people to produce goods. This has paved the way for companies from 3 to 80 running small scale, highly profitable businesses.

Fair enough – makes sense and a good way for the broadening of the employment base and revenue raising base in the ACT.

But, why did the ACT Gov’t up to triple Commercial Annual Rates (along with residential annual rates) ?

Surely, over time, that will limit the growth in business start ups in the ACT and so limit employment growth and broadening of the employment market ? Makes no sense to me.

The only businesses that will survive in the ACT are those who are providing essential local services.
Because of the “non-supportive/buy out of town” attitude of the ACT Government and other disincentives like the ones you have reffered to, it is extremely difficult to base a business in Canberra and compete nationally.
The geographical siting of Canberra (mentioned in an earlier post) and the difficulty in arriving in Canberra direct from overseas is also a negative and nothing can be done about this.
The MLAs from all sides of politics who are promoting a new convention centre should come to grips with the fact that like most other businesses, Canberra cannot compete with other cities in Australia that are already offering the same thing.
I can’t think of one MLA who has had any recent business experience so we are really doomed.

HiddenDragon8:42 pm 29 Jul 14

chewy14 said :

davo101 said :

We’re all doomed; it’s known as the second law of thermodynamics.

As to the more immediate issue in Canberra, I’m not sure that there really is anything to be done about it. Canberra is after all just Australia’s largest company town and if the company is planning to cut production then that’s that.

You need to remember that there is no natural reason why Canberra should be located where it is. It has no hinterland to support, no port, no access to natural resources. If it hadn’t been selected as the site for the seat of Government then it would now be just an interesting old church at a crossroad on the Queanbeyan-Yass road. This, in combination with the high salaries of the company workers, means that there is really not that much business opportunity in Canberra beyond servicing the needs of the company workers and the national institutions based here or providing a home for organisations that need to be close to the seat of government.

I think you’re significantly underestimating the business opportunities for companies to be close to the seat of government. Sure we won’t be challenging Sydney or Melbourne but there is plenty of scope for growth. Obviously if the proposed federal cuts go through, we are in for a lean couple of years but I don’t buy into this doom and gloom stuff. We’ve been there before, we’ll be there again, the wheel turns.

Whether it’s for lobbying on broader policy questions, or for chasing contracts, I imagine most businesses and business groups have probably already made their choices about a Canberra presence, and in the case of lobbying, some are so powerful that the politicians tend to go to them in Sydney, Melbourne, New York etc……

I have trouble seeing an economic case for anything here that’s not at least partially reliant on government or university spending – that’s ultimately not a criticism or a complaint, just a good reason for thinking that big, ambitious ACT Government spending based on dreams and visions is foolish.

Sadly, the most likely opportunity for growth (absent another free-spending federal government) is probably in further provision of subsidised (by ACT taxpayers) services to the residents of surrounding NSW – the “greater Canberra” vision – nice for the beneficiaries, including bureacratic empire-builders, and appealing to the fans of regional government who think the States are so last century, but not so good for those who are paying for it.

Mark of Sydney1:40 pm 29 Jul 14

Well I bought my first Canberra property on the weekend. Was going to wait for a few more months to see if prices would fall significantly after the election but there is no sign of that and the property is centrally located and ideal from an investment or living perspective.

The OP says ‘To believe things will remain the same and that just like after Howard in 1996, this town will recover, is at best otpimistic and more realistically is delusional.’ Why, what evidence do you have?

I’m no great fan of the current Labor-Green style of territory government but to suggest it’s ‘broke and desperate’ is just silly. Had an acquaintance from Europe here to stay for the past few weeks and she was incredulous when talking about how the people she was working with in Canberra were complaining about how tough things are at the moment. If you think things are bad here, ask someone who knows what it’s like in a major European city, particularly in a public-sector dependent field.

Davo101 says ‘there is no natural reason why Canberra should be located where it is. It has no hinterland to support, no port, no access to natural resources.’ But you can say that about many prosperous cities the world over. Having a port, an agricultural hinterland or access to resources was once a pre-condition for a powerful urban economy. Now it’s about the availability of skills or cheap labour. Canberra has the first if not the second, but it does need to become more entrepreneurial.

The answer probably isn’t in the kind of obsessively over-reaching — there’s not a human problem that can’t be fixed by rolling out a new law or program — approach to government that seems to characterise the current territory government, but nor is it in the populous whining and reactionary response of so many people who post on this site, who seem to think that unless something is produced on an assembly line or in a paddock it’s of no economic or social value.

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