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Damning legacy from self-government and six ACT chief ministers

By Peter Clack 26 June 2014 41


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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Damning legacy from self-government and six ACT chief ministers
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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.

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