Opportunity Lost

Canfan 5 June 2014 27

jh-budget

Canberrans will be forced to pay for $4.5 billion in debt and nearly a billion dollars in interest all so Shane Rattenbury can build light rail and Simon Corbell can build solar farms, Opposition Leader Jeremy Hanson said today.

“Tuesday’s budget was a continuation of the failures dished out over the past 13 long years. The extensive debt and deficit that Andrew Barr uses as throwaway lines are signs the government cannot show restraint in funding its pet projects that Canberrans do not want and cannot afford,” Mr Hanson said.

“Debt will rise to $4.5 billion while interest will reach nearly a $1 billion over the forward estimates. Rates will rise by 10 percent annually costing households hundreds of dollars more each year. But Andrew Barr and Simon Corbell don’t care as long as they can reach a 90 percent renewable energy target and build a multi- billion dollar tram network.

“ACT Labor is causing Canberra to lose its way but the Canberra Liberals will bring the opportunity back. I want Canberra to be the best place for everyone to raise a family, make a living and get ahead. I want to build economic prosperity, make home ownership attainable and make our health system the best in Australia.

“Canberra is the best city in Australia and Canberrans deserve better. The Canberra Liberals will fight every day for what Canberrans want and not what ACT Labor thinks they need,” Mr Hanson concluded.

(Media Release Jeremy Hanson)


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VYBerlinaV8_is_back VYBerlinaV8_is_back 2:27 pm 10 Jun 14

rommeldog56 said :

patrick_keogh said :

Well I think you can make an argument one way or the other about whether we should have done these projects and done them now. Of course the wisdom that comes from hindsight is a wonderful thing but I know a lot of ratepayers at the time thought that improved water security was worth spending money on. That believe will almost certainly come back in the next drought.

Given the decision to go ahead with these projects it makes sense for the ACT government to do the borrowing, given that the territory’s AAA credit rating means that the cost of money is lower to the government than to commercial organisations.

Calculating the NPV of these assets is tricky, because it is hard to factor in the risk of running out of water: you’d rely on elastic pricing models (as the level of the dams fall the price rises) or similar together with some modelling on the demand side (population increase etc.). So working out whether this is worth the $250M p.a. would require information I don’t have.

Well, in relation to the expansion of the Cotter dam – it probably should have been done – whether the cost blow out was justified or not is another matter.

Water security is good – water is used by everyone – as opposed to the toy train set.

Its hard to think how the ACT Government can ever drop below at least a AA rating though – I’m sure that the ratings agencies would take into account the fact that the ACT Government can and will repay their debt.

After all, they only need to further increase Annual Rates and other Government charges to pay it off.

It’s easy.

A commercial organisation usually does not have that luxuary.

The ACT government would also be backed, to a degree, by the federal government, who are the only party who can issue Australian dollars. Australia is not in the same situation as many European countries who cannot issue their own currency any more.

Of course there is a limit to how far printing money can go to solving a problem, but for short term problems it would likely be quite effective, if for no other reason than the debt becomes deflated as interest rates catch up.

rommeldog56 rommeldog56 1:24 pm 10 Jun 14

patrick_keogh said :

Well I think you can make an argument one way or the other about whether we should have done these projects and done them now. Of course the wisdom that comes from hindsight is a wonderful thing but I know a lot of ratepayers at the time thought that improved water security was worth spending money on. That believe will almost certainly come back in the next drought.

Given the decision to go ahead with these projects it makes sense for the ACT government to do the borrowing, given that the territory’s AAA credit rating means that the cost of money is lower to the government than to commercial organisations.

Calculating the NPV of these assets is tricky, because it is hard to factor in the risk of running out of water: you’d rely on elastic pricing models (as the level of the dams fall the price rises) or similar together with some modelling on the demand side (population increase etc.). So working out whether this is worth the $250M p.a. would require information I don’t have.

Well, in relation to the expansion of the Cotter dam – it probably should have been done – whether the cost blow out was justified or not is another matter. Water security is good – water is used by everyone – as opposed to the toy train set.

Its hard to think how the ACT Government can ever drop below at least a AA rating though – I’m sure that the ratings agencies would take into account the fact that the ACT Government can and will repay their debt. After all, they only need to further increase Annual Rates and other Government charges to pay it off. It’s easy. A commercial organisation usually does not have that luxuary.

VYBerlinaV8_is_back VYBerlinaV8_is_back 1:12 pm 10 Jun 14

patrick_keogh said :

Well I think you can make an argument one way or the other about whether we should have done these projects and done them now. Of course the wisdom that comes from hindsight is a wonderful thing but I know a lot of ratepayers at the time thought that improved water security was worth spending money on. That believe will almost certainly come back in the next drought.

Given the decision to go ahead with these projects it makes sense for the ACT government to do the borrowing, given that the territory’s AAA credit rating means that the cost of money is lower to the government than to commercial organisations.

Calculating the NPV of these assets is tricky, because it is hard to factor in the risk of running out of water: you’d rely on elastic pricing models (as the level of the dams fall the price rises) or similar together with some modelling on the demand side (population increase etc.). So working out whether this is worth the $250M p.a. would require information I don’t have.

I don’t think too many people would have a problem with spending on infrastructure like water capture, storage and processing, because it has a clear and ongoing benefit (provided the money was spent reasonably efficiently).

patrick_keogh patrick_keogh 12:31 pm 10 Jun 14

Well I think you can make an argument one way or the other about whether we should have done these projects and done them now. Of course the wisdom that comes from hindsight is a wonderful thing but I know a lot of ratepayers at the time thought that improved water security was worth spending money on. That believe will almost certainly come back in the next drought.

Given the decision to go ahead with these projects it makes sense for the ACT government to do the borrowing, given that the territory’s AAA credit rating means that the cost of money is lower to the government than to commercial organisations.

Calculating the NPV of these assets is tricky, because it is hard to factor in the risk of running out of water: you’d rely on elastic pricing models (as the level of the dams fall the price rises) or similar together with some modelling on the demand side (population increase etc.). So working out whether this is worth the $250M p.a. would require information I don’t have.

dungfungus dungfungus 11:07 am 10 Jun 14

patrick_keogh said :

gazket said :

It seems 1/2 the $4.5 billion borrowed money will be paying for ACTEW debt.

I haven’t looked into it so perhaps someone can inform me… I’m aware of a couple of large capital projects that ACTEW has completed (or are nearing completion), namely the Googong pipeline and the Cotter dam expansion. Is this where this $4.5 billion in debt comes from?

The article in Monday’s CT doesn’t give much detail but it said most of ACTEW’s borrowings in recent years were to fund the projects you referred to. A figure of $1.4 billion is suggested.
What is revealing is that interest payments are around $250 million a year yet the ACT Government still takes 100% of the dividends from ACTEW first.
To me this is tantamount to a public company using borrowed money to pay dividends to the shareholders which is not sustainable. Meanwhile, the debt grows and we ratepayers are exposed to the debt.
Perhaps they are deliberately gearing ACTEW’S borrowings so high that it will be unsaleable and the huge salaries of the chosen few will be preserved.

patrick_keogh patrick_keogh 9:47 am 10 Jun 14

gazket said :

It seems 1/2 the $4.5 billion borrowed money will be paying for ACTEW debt.

I haven’t looked into it so perhaps someone can inform me… I’m aware of a couple of large capital projects that ACTEW has completed (or are nearing completion), namely the Googong pipeline and the Cotter dam expansion. Is this where this $4.5 billion in debt comes from?

dungfungus dungfungus 10:32 pm 09 Jun 14

gazket said :

It seems 1/2 the $4.5 billion borrowed money will be paying for ACTEW debt. Looks like ACTEW couldn’t run a bath without letting it overflow.

Remember how ACTEW used to sponsor every sporting team and causes like the home for homeless homing pigeons?
Well, soon ACT ratepayers will be sponsoring ACTEW.

gazket gazket 9:29 pm 09 Jun 14

It seems 1/2 the $4.5 billion borrowed money will be paying for ACTEW debt. Looks like ACTEW couldn’t run a bath without letting it overflow.

dungfungus dungfungus 9:57 am 09 Jun 14

Nothing like the Monday of a holiday weekend when most of the CT’s readers are away to slip in some bad news.
In the CT today (apart from Andrew Barr’s headline about “landbanking concessions”) and Corbell failing to practice what he preaches about Green electricity use by ACT Governmnet agencies, there is one article about the massive drop in revenue from the Land Development Agency. It appears that most of the losses occurred before Abbott became PM so there is no way they can apportion any blame to him. The future years look bleak also. This will certainly be blamed on Abbott.
The other article about ACTEW being hopelessly in debt is more disturbing. We are talking about billions – the $50 million they lost on TransACT are only the crumbs.
I hope the Liberals go to town on this. The Labor Governmnet and its JV partners are out of control.

milkman milkman 9:41 am 09 Jun 14

miz said :

I went to Spotlight in Queanbeyan yesterday. I couldn’t help noticing that Queanbeyan looked beautiful – very clean and neat. Unlike what I see every day in Canberra, there is no graffiti visible on the main entrance roads into Queanbeyan; no overgrown grass and litter (not a skerrick of rubbish to be seen); and there was a rather lovely, well-maintained roundabout of low plantings at the roundabout of Canberra Ave and Lanyon Drive. I looked, and I remembered that Queanbeyan also has green bins and a hard rubbish collection.
I do not understand why Queanbeyan can do all this yet Canberra remains scruffy and embarrassing and does not have the services available in almost all other medium-sized towns across Australia.
We had interstate visitors (ex-longtime-Canberrans) this weekend. They commented on the evident lack of general maintenance – the ‘look and feel’, if you like, of their former home town.
Then I realised – Canberra has become ‘struggle town’.
I want what Queanbeyan has. Can we please, PLEASE, have a government that demonstrates that they can do the little things properly BEFORE they try to take on big, expensive things like trams we do not need. I am so sick to death of show-off pretentious ACT Governments who want to be the ‘first’ to do something momentous, like heroin injection rooms, gay marriage, and human rights prisons. Now, it’s all about trams, which apparently are the cool toy lots of cool towns are getting.

None of these things were never necessary. Prioritising these things is plain stupid – like a person who buys really posh, shiny furniture, only to put it into a house they never bother to clean or maintain.
I just want my local government to be a local government. Not cool. Not momentous. Just do the housework already.

+ a million.

Ben_Dover Ben_Dover 8:21 am 09 Jun 14

Labour’s slavish adhesion to this lunatic light rail idea, and worshiping at the altar of Mayor Rat is making the Libs a shoe in for the next election

gooterz gooterz 9:28 pm 08 Jun 14

Be nice to find out how much ‘legalizing’ gay marriage costed in the end. An investment that set back the cause by 10 years, cost millions locally and federally and p$%#%d off the many on both sides of the fence.

Its amazing that whenever the government wants to spend a big deal of money they also like to get benefit for themselves, in this case increasing the size of the assembly.

For the $0.6 billion for light rail we could get 1gb fibre to the home for everyone in Canberra, which would negate the need for many to have to go to work. Would save millions for the federal government as they could reduce office sizes for fed public servants.

The feds would probably pay half if asked.

miz miz 8:29 pm 08 Jun 14

I went to Spotlight in Queanbeyan yesterday. I couldn’t help noticing that Queanbeyan looked beautiful – very clean and neat. Unlike what I see every day in Canberra, there is no graffiti visible on the main entrance roads into Queanbeyan; no overgrown grass and litter (not a skerrick of rubbish to be seen); and there was a rather lovely, well-maintained roundabout of low plantings at the roundabout of Canberra Ave and Lanyon Drive. I looked, and I remembered that Queanbeyan also has green bins and a hard rubbish collection.
I do not understand why Queanbeyan can do all this yet Canberra remains scruffy and embarrassing and does not have the services available in almost all other medium-sized towns across Australia.
We had interstate visitors (ex-longtime-Canberrans) this weekend. They commented on the evident lack of general maintenance – the ‘look and feel’, if you like, of their former home town.
Then I realised – Canberra has become ‘struggle town’.
I want what Queanbeyan has. Can we please, PLEASE, have a government that demonstrates that they can do the little things properly BEFORE they try to take on big, expensive things like trams we do not need. I am so sick to death of show-off pretentious ACT Governments who want to be the ‘first’ to do something momentous, like heroin injection rooms, gay marriage, and human rights prisons. Now, it’s all about trams, which apparently are the cool toy lots of cool towns are getting. None of these things were never necessary. Prioritising these things is plain stupid – like a person who buys really posh, shiny furniture, only to put it into a house they never bother to clean or maintain.
I just want my local government to be a local government. Not cool. Not momentous. Just do the housework already.

lostinbias lostinbias 6:27 pm 08 Jun 14

Maya123 said :

Ha, ha, I didn’t put my bin out this week, or last week, or the week before that, and might not for several weeks as it is still almost empty. But plenty of others in my street did, although I can’t imagine what they find to fill their bins with week after week. I guess they don’t compost and spend extra on food they don’t use and then bin it.

I guess they must live different lifestyles to you! Live and let live!

milkman milkman 5:30 pm 08 Jun 14

Grail said :

VYBerlinaV8_is_back said :

Do you disagree that the current government are running up a massive debt to pander to a Green balance of power?

Do you agree that Jeremy’s promises are non-core and must necessarily give way to the austerity measures that he will introduce, should his party gain government? He’s already promised that rates will rise 10% per year.

Do you agree that Liberals have never been able to manage debt and are fixated with running at a surplus even when infrastructure, education and health have to suffer?

Do you agree that people who fund their house purchases with loans are fiscally irresponsible?

What the hell is this? Why are you shilling for Labor? Anyone can see this ACT budget is ridiculous.

rommeldog56 rommeldog56 4:49 pm 08 Jun 14

Grail said :

VYBerlinaV8_is_back said :

Do you disagree that the current government are running up a massive debt to pander to a Green balance of power?

Do you agree that Jeremy’s promises are non-core and must necessarily give way to the austerity measures that he will introduce, should his party gain government? He’s already promised that rates will rise 10% per year.

Do you agree that Liberals have never been able to manage debt and are fixated with running at a surplus even when infrastructure, education and health have to suffer?

Do you agree that people who fund their house purchases with loans are fiscally irresponsible?

1) The ACT Libs “promises” have to be taken with a grain of salt – as nowday’s all promises/policies from politicians must, no matter what their persuasion !

2) I don’t recall the ACT Liberals saying that Annual Rates would continue to rise by 10% on average under them. Citation please ? But, how would they stop it now its been legislated and implemented ? With what would they replace the revenue shortfall ?

3) Debt has to repaid sometime. So, one day, infrastructure like education and hospitals have to suffer. So, why get into that situation in the 1st place ! The ACT Labor Govt is already deeply in debt and will be “borrowing” b$1 to cover the infrastructure “investment” costs in this budget. Thats going to bankrupt this place when it has to be repaid and education, schools, Ratepayers and all ACT residents will suffer much more than they should. History tells us that those increased ACT Gov’t charges will never be reduce, either.

4) No – I for one do not agree that “people who fund their house purchases with loans are fiscally irresponsible”. Thats not, IMHO, not an apples-to-apples comparison. People borrow $ to buy a house. THEY pay it back – not others (eg. all householders). It remains their personal asset. Mortgages eventually end but subsidising loss making Gov’t infrastructure (like the light rail), sale of assets then leasing them back, increased water charges, increased parking and rego charges, etc, will go on forever – for all ACT residents to pay (like the ACTION bus subsidy). This ACT Gov’t had no mandate to press forward with the Light Rail and the consequent cost impost onto all Canberrians/Ratepayers. The ACT Lib’s actually got marginally more of the vote at the last election – but lost due to the Greens (Shane Rattenbury) supporting the incumbent Labor Government. So, responsibility for the Light Rail folly, the average 10%pa rise in Annual Rates for the next 20 years, etc, can be put fairly and squarely on Rattenbury’s shoulders. Long may that be remembered !!

Grail Grail 11:55 am 08 Jun 14

VYBerlinaV8_is_back said :

Do you disagree that the current government are running up a massive debt to pander to a Green balance of power?

Do you agree that Jeremy’s promises are non-core and must necessarily give way to the austerity measures that he will introduce, should his party gain government? He’s already promised that rates will rise 10% per year.

Do you agree that Liberals have never been able to manage debt and are fixated with running at a surplus even when infrastructure, education and health have to suffer?

Do you agree that people who fund their house purchases with loans are fiscally irresponsible?

Grail Grail 11:46 am 08 Jun 14

gazket said :

I bet you put your bin out to be emptied this week.

Nope. The garbage bin goes out when there’s smelly stuff in it: usually about once every three or four weeks. The recycling goes out every fortnight though.

Maya123 Maya123 10:08 pm 05 Jun 14

gazket said :

“The Liberals are only complaining about the 90% renewable target because it means the end of the line for their buddies in the coal-fired electricity industry”

Grail is still butt hurt, How would we pay Labour debt if there are no coal fired power stations ?
The 90% renewable target is an ideological dream.
Remember no waste by 2010, a previous ideological dream. I bet you put your bin out to be emptied this week.

Ha, ha, I didn’t put my bin out this week, or last week, or the week before that, and might not for several weeks as it is still almost empty. But plenty of others in my street did, although I can’t imagine what they find to fill their bins with week after week. I guess they don’t compost and spend extra on food they don’t use and then bin it.

Mr Evil Mr Evil 7:16 pm 05 Jun 14

Jesus, I didn’t know Jeremy was still alive – I thought he’d fallen into some Zed-like coma and died!

Anyway, good to see he can come out and thump the side of the tub sometimes; it’s just a pity he doesn’t do it more often, and a little more effectively against this hopeless government. Also, it’d be nice to hear how the ACT Liberals would do things differently if they ever get a chance to hold the steering wheel…..

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