18 October 2022

Feds dash Territory's hopes of $100 million housing debt waiver ... for now

| Lottie Twyford
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ACT senators Katy Gallagher and David Pocock campaigned to waive the ACT Government’s $100 million housing debt. Photo: Michelle Kroll.

The Federal Government has dashed the hopes of the Territory government that it would waive the latter’s $100 million housing debt.

Finance Minister and ACT Senator Katy Gallagher told reporters in Canberra yesterday (12 October) the government was “not in a position” to forgive the debt.

That follows months of pressure from Senator David Pocock and Chief Minister Andrew Barr for it to do so since the Federal Labor government came to power in May.

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Senator Gallagher said yesterday it was “not that easy” to forgive the ACT’s loan given all states and territories owed the Commonwealth a combined $1.6 billion in housing debts.

“But I’m not Finance Minister for the ACT – as much as at times I would like to be – I’m Finance Minister of the country, and I don’t think it’s right to waive debts for the price of a vote on the Senate floor, which is how it’s happened in the past. We’ve got grownups in charge.”

Senator Gallagher was referencing a previous deal in which the Morrison government waived Tasmania’s $150 million housing debt in exchange for Senator Jacquie Lambie’s support on another matter.

But she said work would continue on the issue.

“We’ll continue to engage with the ACT Government. I’ve had meetings with the Chief Minister about it,” she said.

“I know this is an issue that they would like to see resolved. We want to be a government that works with states and territories,” she said.

Senator Gallagher was critical of the previous Federal government for not having waived the historic housing debt or accepted the local government’s calls for refinancing it.

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That hasn’t sat well with independent Senator Pocock. He has indicated he is still prepared to use his position on the crossbench to force the government to waive the Territory’s debt in exchange for his support.

Senator Pocock had pledged to do so during his election campaign.

“Senator Gallagher may, of course, say the Government won’t be doing any deals, but the fact remains, the government doesn’t have a majority in the Senate,” he said.

“I wouldn’t be doing the right thing by the people who elected me if I didn’t try everything possible to see this debt forgiven.”

Mr Pocock said the ACT was bearing the brunt of a crippling shortage of social and affordable housing and the money currently going towards interest payments would be better served going towards supply.

He also questioned how the government could afford billions in tax cuts but could not wipe $100 million of debt.

“This looks like a government choosing to let people sleep in cars while planning to give tax cuts to politicians and other wealthy Australians,” Senator Pocock said.

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In response to multiple questions from Region, Chief Minister Andrew Barr said he was “disappointed” by the news the debt would not be waived in this month’s budget.

“We will continue to work with the Commonwealth to find a way for the debt to be waived,” Mr Barr said.

“In parallel, the ACT will seek to partner with the Commonwealth on other ways to increase housing supply and lower the cost of housing.”

Chief Minister Andrew Barr

Chief Minister Andrew Barr has been arguing the Territory’s case for waiving the debt since 2019. Photo: Ian Bushnell

The ACT Government has promised if the debt were waived it would use the money it’s currently paying the Federal Government to invest in social and affordable housing.

Mr Barr has been arguing the case for the ACT since the 2019 Tasmania deal. In May, he said he was “hopeful” the government would be more open to listening to the ACT’s case.

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The ACT Greens are also up in arms about the news.

Greens crossbencher Johnathan Davis echoed Senator Pocock’s comments and questioned how the government could afford to back the Stage 3 Tax Cuts but not to wipe the debt.

“Unlike other state and territory governments who are advocating for their historic housing debt to be forgiven, the ACT Government has committed to investing savings from debt forgiveness dollar-for-dollar back into buying and building more public housing,” he said.

“Australians voted for a change of Federal Government because they wanted change. Tax cuts for the rich while more and more people struggle to find a home? Sounds like more of the same old ‘trickle-down’ neoliberal con to me.”

Opposition Leader Elizabeth Lee said it was “interesting” to see Senator Gallagher’s changed tune now she was in government.

“When she was in opposition, she was very quick to say to Senator Zed Seselja, ‘get on with it, it’s not that hard’, and now the tables are turned and she is not able to listen to her own colleagues,” she said.

Ms Lee said if Mr Barr could not get action on this issue, it would be clear his political alliance was more important to him than the needs of Canberrans.

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Just the latest round in the housing procrastination and blame game, all just a distraction from their lack of interest in meaningful reform and taxation.

Ray Polglaze1:58 pm 14 Oct 22

Some commenters have accused Katy Gallagher of being disloyal to the ACT in not supporting a special decision to waive the housing debt for the ACT.

If Gallagher was a back bench member of the Senate and not a minister, then she could focus on putting special cases for the ACT. But as the Minister for Finance, she has to focus on the broader needs of the government and people throughout the country. It would be improper and arguably corrupt for her to make decisions slanted to provide special advantages to her electorate.

To be fair and consistent, if the $100 million ACT housing debt was waived, then the whole $1.6 million housing debt should be waived for all states and territories.

There could also be better ways to use $1.6 billion to increase public housing in Australia. For example, there could be direct grants where the Commonwealth covers half the cost of new public housing. That might double the number of new public housing units that were built with $1.6 billion.

One hundred million dollars is also not going solve the public housing shortage in the ACT that has built up through lack of spending on public housing by the ACT Government over more than ten years. That will require at least $1 billion for an additional 2 000 public housing units.

The ACT community would be well served if Jonathon Davis, as a back bench member of the ACT Labor Greens Government, focused on lobbying that government, of which he is a member, to spend more on public housing to at least match the population growth.

Do you think commenters gave Zed the same leniency in the previous government over not delivering for the ACT?

Surely what’s good for the Gander is good for the Goose?

Ray Polglaze10:47 pm 13 Oct 22

How does Johnathan Davis get to be a “Greens crossbencher” when he is a member of one of the two parties that are in government? Surely he is a Greens backbencher.

HiddenDragon7:54 pm 13 Oct 22

The federal government could certainly do more to deal with pressing issues such as housing if it was not making room in its budget for major middle/upper income tax cuts legislated by its predecessors.

The same could be said for the ACT government which, just to take one example, can find funds to subsidise the uptake of electric vehicles by the affluent while other Canberrans deal with homelessness and grinding poverty in a very expensive city.

Rather than continuing to press the housing debt issue in these circumstances, the ACT government might be better to take the opportunity of a federal Finance Minister with first-hand knowledge to get stuck into the issue of cross-border servicing costs (particularly for big ticket items like health and education) between the ACT and NSW.

In the past, this issue seems largely to have been left to unequal wrangling between a small territory and the largest state, with federal governments of both brands standing on the sidelines – but maybe Senator Gallagher could be persuaded to buy in either in the specific case of ACT/NSW, or through getting the broader issue on to the National Cabinet agenda for all jurisdictions.

The potential gains for the ACT budget from this could be far more, over time, than forgiveness of the $100m. housing debt.

Capital Retro5:32 pm 13 Oct 22

Pocock is also responsible for the Feds not funding a rebuild of Viking Park.

ACT sold their public housing for light rail, now we have none we’re asking the feds to pay for housing, and indirectly the useless tram.

Labor campaigned on how useful having a labor senator from ACT as the treasurer. Turns out that was worth as much as the Tram cost benefit analysis.

Barr and Pocock have spent months of time of pressing the feds for nothing, surely, they could have predicted the budget situation. Instead, it’s more likely they’ve known from the start but now want to give the impression, ‘Oh well I tried’.

William Newby4:46 pm 13 Oct 22

Gallagher; as loyal to the ACT now as she was when chief minister. Zero!

Absolutely William Newby. She actually made things far worse for the ACT when she was CM by not forcing the Commonwealth to take responsibility for the cost of the Mr Fluffy clean up. Instead she foisted a massive debt on us just so she didn’t spoil her run at the Senate. She’s a disgrace.

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