Damning legacy from self-government and six ACT chief ministers

Peter Clack 26 June 2014 41

black-mountain

It is 25 years since self-government was imposed on Canberra by the Hawke Labor Government in May 1989, a hybrid concept that blended state and local government. There have been just six chief ministers and Labor has governed for 17 of 25 years (and for the past 13 years).

Almost all governments have been hamstrung by hung parliaments or exposed to the policies of minor parties (such as the Greens) or independents who seek their own personal agendas, for example Michael Moore’s push for – among many other things – decriminalising marijuana.

Through it all, Canberra has experienced some staggeringly costly administrative bungles, ranging from various unwise and badly thought out projects to misplaced or crackpot investments and outright neglect.

Individual chief ministers have frequently faced criticism over some of the more expensive and visible losses. But generally most of these failed ventures are brushed under the carpet.

The longest serving chief minister, John Stanhope (more than nine years), was censured for the government’s handling of the 2003 firestorm crisis. It is difficult to put an actual cost on the losses, but it is in the area of hundreds of millions of dollars, including $60 million for the loss of the pine plantations alone, and $345 million paid out for 3,300 insurance claims (figures from Insurance Council of Australia, 2003).

The coronial inquest into the bushfire in mid-December 2006 found significant bureaucratic failings contributed to the devastation, although it also claimed shortcomings at a political level.

However, the majority of the debacles were devised and backed by executive managers in the ACT administration, and rubber stamped or given the imprimatur of the government and ACT Legislative Assembly.

Liberal chief minister Kate Carnell resigned in October 2000, rather than face a no-confidence motion about cost over-runs for the Bruce Stadium redevelopment project. The project cost to the government ballooned to $82 million and no private sector money was found. It was strongly criticised by the ACT Auditor General for not having a proper assessment, analysis or review process and pointed to breaches of the Financial Management Act.

Under the first ACT Labor chief minister, Rosemary Follett, Labor backed the Australian International Hotel School in association with Cornell University at the historic Kurrajong Hotel. This project was entirely the brainchild of executives of the Canberra Institute of Technology, who took numerous fully paid trips overseas to pursue this project.

A 2002 report by the ACT Auditor General identified accumulated losses of $20.6m, borne “entirely by ACT taxpayers”. It was a failure at almost every level; failed to attract enough students, was completely unprofitable and yet defended at every turn by public servants or chief ministers, including Liberal chief ministers Kate Carnell and Gary Humphries. In September 2005 the school was acquired under peppercorn terms by the Blue Mountains International Hotel Management School, which has a sound reputation for managing boutique hotel schools.

The ACT-owned Totalcare Industries ended up delivering unrecoverable losses of $40 to $50 million, largely blamed on incompetence by various managers and government ministers. It was finally shut down in 2003.

The ACT’s fibre-optic and broadband network provider, Transact Communications, registered losses of $104 million, identified in the ACT Auditor-General’s report in December 2004. This project was backed by Actew Corporation, which itself invested $60 million.

In the early 1990s, the Labor government faced the loss of $7 million to $10 million over the Vitab affair, where the ACT was forced to pay compensation to a group of investors, including former Labor Prime Minister Bob Hawke. See the ACT Auditor General’s report (page 75).

The ACTION bus network has consistently drained more than $50 million a year from public money. No alternative system has been considered. Losses have continued at this rate since the start of self-government 25 years ago.

In 2010 the ACT Auditor General reported that ACT Government subsidies had steadily increased from $60 million in 2005-06 to $77 million in 2010-11. The audit found that the Department of Territory and Municipal Services had not coordinated, managed, and delivered bus services in an effective manner.

It’s a damning legacy from the ACT’s political leadership over the past 25 years.


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41 Responses to Damning legacy from self-government and six ACT chief ministers
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miz miz 10:30 pm 30 Jun 14

If there were a local council component, those councillors would ALL have an active role, including the ‘opposition’, so we would get far better value for money from our pollies.

rommeldog56 rommeldog56 10:04 pm 30 Jun 14

Apart from lessening the workload on the current ACT Gov’t Ministers, can anyone explain how one additional, or more, Ministers (or even MLAs !) will improve ACT Government decision making ?

Will they just merely tow the Corporate line of what ever party they are drawn from ? Or will they be merely another source of Gov’t spin, of endless media releases, etc.

I’m certainly far from convinced of the merits/need for this.

rommeldog56 rommeldog56 8:31 pm 30 Jun 14

Me2 said :

rommeldog56 said :

miz said :

Argonaut said :

My main problem is the conflation of state and local governmentt services, which by necessity has meant prioritising the former at the expense of the latter. It also means that we lack the local government accountability, as there is no-one with a vested interest in serving the needs of the local community.

Where you would be able to write to or visit your local councillor to have your views heard elsewhere, here in Canberra we have bureaucrats who are employed to do their job, and have no accountability to their community (aside from the usual charter of the public service).

Meanwhile, as rate payers we are paying twice what local government areas are paying (I am comparing this with my own experience as a rate-payer in Sydney, and in Perth), and getting much less in return, from a local government services perspective.

While I support public transport, healthcare, and education, I don’t believe we should have to choose between them, and the provision of local government services such as green waste collection, house-hold junk throw-outs, and someone who I voted in on my local council.

Yes, I personally think the hybrid State/Local govt model has proved to be an overwhelming failure. Having lived elsewhere in Australia for about 15 years before returning to Canberra post-self-government, I agree that Canberrans are significantly diddled on local government services and accountability. However MLAs don’t like to hear that as they have a vested interest in maintaining the (expensive yet significantly inefficient) status quo.
My only disagreement with the OP is his views on ACTION. We have to have public transport, and it is one of those things that cannot be met market forces. Having lived in areas solely served by private buses (in Sydney), they are way, way worse than ACTION. Further, privatising ACTION would not fix the intrinsic public transport problem we have at present – which is to sanction the diversion of public transport funds for the whole town, into an inflexible (but apparently ‘cool’) light rail extravaganza for one privileged part of town, and refusing to accept BRT would be better in every way.

Agree with u, miz re the hybrid State/Local Gov’t model. Not sure if its the mix of those functions – the cost of which is spread across a relatively small constituency base of Ratepayers in the ACT – or the relative fiscal/economic incompetency of successive ACT Governments that’s the problem.

I suspect a bit of both – with heaps of the latter adding to the problem.

Re subsidising public transport. Agree also that ACTION, if it runs at a loss and is reasonably well managed, should be subsidised – after all, it arguably covers most of the ACT. Ditto for a Bus Rapid Transit System.

But, introducing the possibility/probability of the subsidisation of another public transport system aka a toy train set from Gunners to Civic, is at least to me (living in Tuggers), an absurdity and economically irresponsible.

The toy train set decision will be a huge cost for a small geographic area, as opposed to a BRT for all of the ACT, just reflects the relative fiscal/economic incompetence of this current ACT Gov’t.

So perhaps, rather than the current plan to increase the ACT assembly to 25 members, we should be looking to create a separate local council? Keep the current (or perhaps a slightly smaller) assembly and have an 8-10 member council. Or a north and a south council with 4-5 members in each. I don’t know how they decide the size of councils by population etc. but you get my drift.

I’m with your drift, me2. And, it has merit i would think. Perhaps “junior” ACT Govt Ministers or Legislative Assembly “Secretaries” (like Parliamentary Secretaries in the Commonwealth) to separate local council activities from “State” type activities, might also work – except that the number of MLAs would need to increase of course.

Then again, what would the point be if they all just towed the party line anyway ?

Me2 Me2 3:15 pm 30 Jun 14

rommeldog56 said :

miz said :

Argonaut said :

My main problem is the conflation of state and local governmentt services, which by necessity has meant prioritising the former at the expense of the latter. It also means that we lack the local government accountability, as there is no-one with a vested interest in serving the needs of the local community.

Where you would be able to write to or visit your local councillor to have your views heard elsewhere, here in Canberra we have bureaucrats who are employed to do their job, and have no accountability to their community (aside from the usual charter of the public service).

Meanwhile, as rate payers we are paying twice what local government areas are paying (I am comparing this with my own experience as a rate-payer in Sydney, and in Perth), and getting much less in return, from a local government services perspective.

While I support public transport, healthcare, and education, I don’t believe we should have to choose between them, and the provision of local government services such as green waste collection, house-hold junk throw-outs, and someone who I voted in on my local council.

Yes, I personally think the hybrid State/Local govt model has proved to be an overwhelming failure. Having lived elsewhere in Australia for about 15 years before returning to Canberra post-self-government, I agree that Canberrans are significantly diddled on local government services and accountability. However MLAs don’t like to hear that as they have a vested interest in maintaining the (expensive yet significantly inefficient) status quo.
My only disagreement with the OP is his views on ACTION. We have to have public transport, and it is one of those things that cannot be met market forces. Having lived in areas solely served by private buses (in Sydney), they are way, way worse than ACTION. Further, privatising ACTION would not fix the intrinsic public transport problem we have at present – which is to sanction the diversion of public transport funds for the whole town, into an inflexible (but apparently ‘cool’) light rail extravaganza for one privileged part of town, and refusing to accept BRT would be better in every way.

Agree with u, miz re the hybrid State/Local Gov’t model. Not sure if its the mix of those functions – the cost of which is spread across a relatively small constituency base of Ratepayers in the ACT – or the relative fiscal/economic incompetency of successive ACT Governments that’s the problem.

I suspect a bit of both – with heaps of the latter adding to the problem.

Re subsidising public transport. Agree also that ACTION, if it runs at a loss and is reasonably well managed, should be subsidised – after all, it arguably covers most of the ACT. Ditto for a Bus Rapid Transit System.

But, introducing the possibility/probability of the subsidisation of another public transport system aka a toy train set from Gunners to Civic, is at least to me (living in Tuggers), an absurdity and economically irresponsible.

The toy train set decision will be a huge cost for a small geographic area, as opposed to a BRT for all of the ACT, just reflects the relative fiscal/economic incompetence of this current ACT Gov’t.

So perhaps, rather than the current plan to increase the ACT assembly to 25 members, we should be looking to create a separate local council? Keep the current (or perhaps a slightly smaller) assembly and have an 8-10 member council. Or a north and a south council with 4-5 members in each. I don’t know how they decide the size of councils by population etc. but you get my drift.

bigred bigred 9:39 pm 29 Jun 14

Was down in god’s waiting room aka Coolamon Court on Saturday and had a look at the draft planning documents. Obviously contrived without understanding a few problems that need to be solved including making it easier for the old folk that infest the centre. So what do the propose? Let us move the community across the road away from the centre. But it is OK I am told, because there will be dedicated parking. What is the problem? The old folks are surrendering their licences and shuffling from the community centre to the shops now. Every metre matters to these folk.

The other issue I saw was they are not proposing traffic calming in Brierly St.

rommeldog56 rommeldog56 5:19 pm 29 Jun 14

miz said :

Argonaut said :

My main problem is the conflation of state and local governmentt services, which by necessity has meant prioritising the former at the expense of the latter. It also means that we lack the local government accountability, as there is no-one with a vested interest in serving the needs of the local community.

Where you would be able to write to or visit your local councillor to have your views heard elsewhere, here in Canberra we have bureaucrats who are employed to do their job, and have no accountability to their community (aside from the usual charter of the public service).

Meanwhile, as rate payers we are paying twice what local government areas are paying (I am comparing this with my own experience as a rate-payer in Sydney, and in Perth), and getting much less in return, from a local government services perspective.

While I support public transport, healthcare, and education, I don’t believe we should have to choose between them, and the provision of local government services such as green waste collection, house-hold junk throw-outs, and someone who I voted in on my local council.

Yes, I personally think the hybrid State/Local govt model has proved to be an overwhelming failure. Having lived elsewhere in Australia for about 15 years before returning to Canberra post-self-government, I agree that Canberrans are significantly diddled on local government services and accountability. However MLAs don’t like to hear that as they have a vested interest in maintaining the (expensive yet significantly inefficient) status quo.
My only disagreement with the OP is his views on ACTION. We have to have public transport, and it is one of those things that cannot be met market forces. Having lived in areas solely served by private buses (in Sydney), they are way, way worse than ACTION. Further, privatising ACTION would not fix the intrinsic public transport problem we have at present – which is to sanction the diversion of public transport funds for the whole town, into an inflexible (but apparently ‘cool’) light rail extravaganza for one privileged part of town, and refusing to accept BRT would be better in every way.

Agree with u, miz re the hybrid State/Local Gov’t model. Not sure if its the mix of those functions – the cost of which is spread across a relatively small constituency base of Ratepayers in the ACT – or the relative fiscal/economic incompetency of successive ACT Governments that’s the problem. I suspect a bit of both – with heaps of the latter adding to the problem.

Re subsidising public transport. Agree also that ACTION, if it runs at a loss and is reasonably well managed, should be subsidised – after all, it arguably covers most of the ACT. Ditto for a Bus Rapid Transit System.

But, introducing the possibility/probability of the subsidisation of another public transport system aka a toy train set from Gunners to Civic, is at least to me (living in Tuggers), an absurdity and economically irresponsible.

The toy train set decision will be a huge cost for a small geographic area, as opposed to a BRT for all of the ACT, just reflects the relative fiscal/economic incompetence of this current ACT Gov’t.

dungfungus dungfungus 2:41 pm 29 Jun 14

dungfungus said :

MERC600 said :

Masquara said :

And, of course, the V8 supercars – was it times two? three? before they woke up on those?

and the Better Place leccy car scheme that fell over, but only at a miserable 2 million, I think.

Extract from my previous comment #28:
“The latest crazy scheme that Corbell has announced to appease The Green is for the Government to replace its (leased) fleet of motor vehicles with all electric and “pollution free” ones”

Better Place Mk2 is about to happen.

They will probably call it “A Much Better Place”

dungfungus dungfungus 1:42 pm 29 Jun 14

MERC600 said :

Masquara said :

And, of course, the V8 supercars – was it times two? three? before they woke up on those?

and the Better Place leccy car scheme that fell over, but only at a miserable 2 million, I think.

Extract from my previous comment #28:
“The latest crazy scheme that Corbell has announced to appease The Green is for the Government to replace its (leased) fleet of motor vehicles with all electric and “pollution free” ones”

Better Place Mk2 is about to happen.

miz miz 1:15 pm 29 Jun 14

Argonaut said :

My main problem is the conflation of state and local governmentt services, which by necessity has meant prioritising the former at the expense of the latter. It also means that we lack the local government accountability, as there is no-one with a vested interest in serving the needs of the local community.

Where you would be able to write to or visit your local councillor to have your views heard elsewhere, here in Canberra we have bureaucrats who are employed to do their job, and have no accountability to their community (aside from the usual charter of the public service).

Meanwhile, as rate payers we are paying twice what local government areas are paying (I am comparing this with my own experience as a rate-payer in Sydney, and in Perth), and getting much less in return, from a local government services perspective.

While I support public transport, healthcare, and education, I don’t believe we should have to choose between them, and the provision of local government services such as green waste collection, house-hold junk throw-outs, and someone who I voted in on my local council.

Yes, I personally think the hybrid State/Local govt model has proved to be an overwhelming failure. Having lived elsewhere in Australia for about 15 years before returning to Canberra post-self-government, I agree that Canberrans are significantly diddled on local government services and accountability. However MLAs don’t like to hear that as they have a vested interest in maintaining the (expensive yet significantly inefficient) status quo.
My only disagreement with the OP is his views on ACTION. We have to have public transport, and it is one of those things that cannot be met market forces. Having lived in areas solely served by private buses (in Sydney), they are way, way worse than ACTION. Further, privatising ACTION would not fix the intrinsic public transport problem we have at present – which is to sanction the diversion of public transport funds for the whole town, into an inflexible (but apparently ‘cool’) light rail extravaganza for one privileged part of town, and refusing to accept BRT would be better in every way.

MERC600 MERC600 11:00 am 29 Jun 14

Masquara said :

And, of course, the V8 supercars – was it times two? three? before they woke up on those?

and the Better Place leccy car scheme that fell over, but only at a miserable 2 million, I think.

dungfungus dungfungus 11:48 am 27 Jun 14

patrick_keogh said :

Queen_of_the_Bun said :

Queen_of_the_Bun said :

Never a good look when 5 out of 16 replies are from the OP – just saying…

dungfungus said :

Rhodium Asset Solutions, The Canberra Glassworks, The National Arboretum? GWS sponsorship?
It goes on and on. Most of these ventures were pet projects of a few Walter Mitty-minded people and none were put to the voters.

What’s your issue with the Glassworks? It is a major success story. It makes money and attracts people to an area of Canberra where other small businesses make money of its back.
What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

I wasn’t going to say anything but your post has prompted me… I feel the same way about the Arboretum. No it has not made a “profit” (in a financial sense) and maybe never will. It is hard to imagine a public park that has. The social and environmental profit may have a long payback period. That is kinda part of the nature of trees. A world where government could only spend money on things that make a profit and things that are really, really, really essential would be a very poor place. No parks, fountains or public art? No Eiffel tower, no statue of liberty, no war memorials? No London Hyde Park, no Sydney Domain, no Washington National Mall? I for one do not want to live in such a society and I suspect that I am not alone.

I utterly, utterly reject the dry economic posture where minimal government is seen as the best outcome. In fact I am a little amused to see “making a profit” characterised as positive by those who in another sentence would want less government. If it could make a profit shouldn’t they argue it is no place for government? Anyway enough ranting for now.

Well, the ACT Labor Government started Rhodium Asset Solutions with the idea of “making a profit” so was that a positive? The same goes for the ill-fated TransACT venture undertaken by an ACT Government corporation.
The outcomes were a massive negative.
Re parks etc., haven’t we got enough of these already? And you obviously don’t get out and about much because there is “public art” all over Canberra. You could be forgiven for not noticing it though.

Peter Clack Peter Clack 11:07 am 27 Jun 14

justin heywood said :

Excellent post Peter. I have long wondered (or marvelled) at the poor performance of ACT governments.

You say that some of the blame can be laid of the feet of senior ACT public servants, who made poor decisions which were then rubber-stamped by the Assembly. If so, surely the blame chiefly lies with the relevant ministers who, after all, are responsible for the appointment of senior management and the approval and implementation (or not) of their advice.

In my view, the current arrangement combines some of the worst aspects of local government (lacklustre, parochial elected officials) and state governments (large, unwieldy bureaucracy, a focus on short-term political agendas). As a result, we have ministers of modest ability making decisions based more on short-term political considerations than on any interest they may have in the long term success of the ACT.

How do we get an Assembly composed of capable, thoughtful citizens, rather than an assembly made up chiefly of third rate political operators? Perhaps as voters, we need to elect more genuinely non-aligned independents – if such a being exists. I for one, would vote for people who occasionally acknowledge that Labor, the Greens and the Libs occasionally come up with good and bad ideas in about equal measure, and support/oppose based on their merit.

You interested in standing Peter?

Well said, but politics has a way of swallowing up individuals I’m afraid.

dungfungus dungfungus 10:57 am 27 Jun 14

pajs said :

All so negative, this piece. No balance. You get the impression that the only things governments in the ACT of all persuasions have done is make mistakes. This kind of unbalanced content does not foster informed discussion. By all means be critical, and there is much to be critical of, but this piece does not do this website or its audience justice.

I am glad you mentioned “informed discussion” because this is always absent when the ACT Government decides to embark on a another non-recourse grand scheme to be funded by ratepayers.
There used to be a thing called “community consultation” but I haven’t heard that terminology being used lately.
The latest crazy scheme that Corbell has announced to appease The Green is for the Government to replace its (leased) fleet of motor vehicles with all electric and “pollution free” ones.
Do we seriously need this extra indulgence?

justin heywood justin heywood 10:51 am 27 Jun 14

Queen_of_the_Bun said :


What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

And therein ^ lies the problem. For most, government in Canberra all comes down to the politics. Many of the posters critical of the OP are very happy to be ‘small-minded and petty’ of their political foes, but seem blind to the failings of their own team.

You’re welcome to the view that the ACT is or has been well governed, but in my view that would be a minority opinion.

Maya123 Maya123 10:26 am 27 Jun 14

pajs said :

All so negative, this piece. No balance. You get the impression that the only things governments in the ACT of all persuasions have done is make mistakes. This kind of unbalanced content does not foster informed discussion. By all means be critical, and there is much to be critical of, but this piece does not do this website or its audience justice.

Agreed, it turned me off reading many of the comments. So negative, but this site tends to be more negative than positive.

pajs pajs 9:56 am 27 Jun 14

All so negative, this piece. No balance. You get the impression that the only things governments in the ACT of all persuasions have done is make mistakes. This kind of unbalanced content does not foster informed discussion. By all means be critical, and there is much to be critical of, but this piece does not do this website or its audience justice.

dungfungus dungfungus 9:22 am 27 Jun 14

Queen_of_the_Bun said :

Queen_of_the_Bun said :

Never a good look when 5 out of 16 replies are from the OP – just saying…

dungfungus said :

Rhodium Asset Solutions, The Canberra Glassworks, The National Arboretum? GWS sponsorship?
It goes on and on. Most of these ventures were pet projects of a few Walter Mitty-minded people and none were put to the voters.

What’s your issue with the Glassworks? It is a major success story. It makes money and attracts people to an area of Canberra where other small businesses make money of its back.
What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

The Canberra Glassworks is a “major success story” only because of the financial support it receives, mainly from you know who. The following is an extract from theit 2013 Annual Report:

“The success of the Glassworks depends very much on the rich and ongoing support of government, corporate and individual partners, its staff, artists and volunteers. I am constantly impressed with the generous, thoughtful and dedicated support we receive from all these quarters. I would like to thank the ACT Government, in particular the Chief Minister, Katy Gallagher, and the Arts Minister Joy Burch for the continued financial assistance under the Key Arts Organisations funding as a special initiative”

There is no balance sheet or profit and loss statement in the report. It only continues to exist on handouts from the ACT Ratepayers for the benefit of a chosen few.
Success means different things to different people.

switch switch 9:17 am 27 Jun 14

Queen_of_the_Bun said :

What’s your issue with the Glassworks? It is a major success story. It makes money and attracts people to an area of Canberra where other small businesses make money of its back.
What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

Just the hypocrisy. One big source of greenhouse gas that only produces trinkets and dust collectors for the trendy is OK, but other big sources of greenhouse gas, eg Bogan-nats, are universally decried by the same mob.

patrick_keogh patrick_keogh 8:46 am 27 Jun 14

Queen_of_the_Bun said :

Queen_of_the_Bun said :

Never a good look when 5 out of 16 replies are from the OP – just saying…

dungfungus said :

Rhodium Asset Solutions, The Canberra Glassworks, The National Arboretum? GWS sponsorship?
It goes on and on. Most of these ventures were pet projects of a few Walter Mitty-minded people and none were put to the voters.

What’s your issue with the Glassworks? It is a major success story. It makes money and attracts people to an area of Canberra where other small businesses make money of its back.
What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

I wasn’t going to say anything but your post has prompted me… I feel the same way about the Arboretum. No it has not made a “profit” (in a financial sense) and maybe never will. It is hard to imagine a public park that has. The social and environmental profit may have a long payback period. That is kinda part of the nature of trees. A world where government could only spend money on things that make a profit and things that are really, really, really essential would be a very poor place. No parks, fountains or public art? No Eiffel tower, no statue of liberty, no war memorials? No London Hyde Park, no Sydney Domain, no Washington National Mall? I for one do not want to live in such a society and I suspect that I am not alone.

I utterly, utterly reject the dry economic posture where minimal government is seen as the best outcome. In fact I am a little amused to see “making a profit” characterised as positive by those who in another sentence would want less government. If it could make a profit shouldn’t they argue it is no place for government? Anyway enough ranting for now.

rosscoact rosscoact 8:44 am 27 Jun 14

Queen_of_the_Bun said :

Queen_of_the_Bun said :

Never a good look when 5 out of 16 replies are from the OP – just saying…

dungfungus said :

Rhodium Asset Solutions, The Canberra Glassworks, The National Arboretum? GWS sponsorship?
It goes on and on. Most of these ventures were pet projects of a few Walter Mitty-minded people and none were put to the voters.

What’s your issue with the Glassworks? It is a major success story. It makes money and attracts people to an area of Canberra where other small businesses make money of its back.
What is so wrong with so many Riot-acters that they have to be so small-minded and petty?

Spot on.

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