11 October 2020

Stubborn Coe weighed down by his own economic baggage

| Ian Bushnell
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Alistair Coe and Nicole Lawder

The stunts keep coming: Alistair Coe and deputy Nicole Lawder put a giant rates notice in the deep freeze. Photo: Facebook.

Into the home straight of the election race and it is clear that Canberra Liberals leader Alistair Coe has loaded lead into his saddlebags.

The questions around his economic strategy just won’t go away and with every sliver of information journalists have managed to drag out of him, the inconsistencies of his party’s “lower taxes and better services” slogan have been drawn into focus.

The key question of how Mr Coe is going to pay for his $1.1 billion of promises remains unanswered.

Nobody takes the ‘growing the population pie’ explanation seriously, and after ruling out borrowing more he has nowhere to go.

Residential and commercial rates freezes, rego cuts and other tax relief will mean foregoing significant revenue that Mr Coe is going to need to meet his election commitments.

Defying gravity like this has left Mr Coe as open as a pre-election polling station to Labor attacks but it needn’t have been this way.

Mr Coe’s instincts about growing unease with successive rates rises and Chief Minister Andrew Barr’s tax reform program are right, so giving property owners a breather has its attractions, particularly in this year of COVID-19.

But he has failed to capitalise on the radically changed fiscal approaches that COVID-19 has wrought, stubbornly locking himself into an untenable position by refusing to say that a Liberal government will, like every other government in the western world, drop the debt and deficit conceit and borrow.

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READ ALSOLiberals’ election promises priced at $1.1 billion over four years

Unless, of course, he is not being entirely truthful, or in Mr Barr’s colourful language, “lying through his teeth”.

In any case, the Liberals’ eCoenomics has put a cloud over his party’s shopping list of promises, from sports centres to dog parks and the infamous million trees, many of which would be worthwhile community assets.

The other campaign clanger has been light rail, first with Transport spokesperson Candice Burch’s flirtation with a Belconnen route and then again Mr Coe’s fixation on releasing the full business case for Stage 2 and going to an open tender.

The Labor government has rightly not declared its hand as it negotiates with the nominated contractor, the Canberra Metro consortium, which delivered Stage 1.

It also makes sense to stick with the same project team and all that was learnt during construction of Stage 1, instead of wasting time and money reinventing the wheel with a new entrant, or more likely, ending up back with the original contractor.

But Mr Coe remains, like an LRV, fixed on the tracks and, again, easy pickings for Labor, which simply argues he never supported light rail and never will.

Light rail does not make a whole campaign but it is emblematic of a Liberal Party that can’t quite come to grips with the times.

This was always the Liberals’ election to win and Labor’s to lose. Mr Coe has campaigned and debated with vigour, proposed some good ideas and homed in on those community sore points of housing, planning and cost of living.

But the lack of team depth has become apparent and the choice of some candidates embarrassing. As we enter the final week, the Liberals are in a bind of their own making and Mr Coe can only grit his teeth and press on till polling day.

Labor only needed to be solid, and has run a campaign firmly grounded in reality, with Mr Barr the ACT’s good COVID-19 shepherd with a safe pair of hands.

It would be a shock indeed if Canberra, even after 19 years of Labor and some pretty obvious baggage and weak links of its own, chose to change horses, but the Liberals look as if they have handicapped themselves from the start.

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michael quirk7:43 am 13 Oct 20

A very disappointing article. While questioning the Liberal party’s economic credentials you offer no criticism of the Barr – Rattenbury government with its major failings outlined elsewhere by Jon Stanhope and Khalid Ahmed.Your support for the extension of light rail despite its high cost, a failure to assess alternatives such as a busway, the absence of value capture opportunities along the route, the rapid improvement in electric bus technology and the need to address far more pressing housing and health issues, calls into question your objectivity. Andrew Barr is not the sharpest tool in the shed. An election loss may give the coxcomb some humility.

What a load of rubbish. Coe will fund his promises exactly the same way Barr will. Borrowing. You will pay for Barr’s promises directly from your pocket through rates, you will pay indirectly for Coe’s.

People should be looking at the policies each party is offering and voting. If you’re happy living with the same stuff as we’ve put up with for the past 20 years, vote Barr. If you’re ready for something different, vote Coe.

Whilst what you say is true, the difference is that Barr is being more honest that he will pay for his promises through borrowings.

Whereas Coe is presenting a fiction that he can somehow lower taxes and deliver all his promises without creating any further debt or cutting any other government services.

They both have ridiculously wasteful plans but an objective assessment would at least find that the ALP are slightly more honest about it.

So you are saying Coe is a liar then? As he isn’t saying he will be borrowing. He is saying that all ah once the good residence of Googong and QBN will come back to Canberra and increase the tax base.

Anyone that believes that furphy that somehow the ‘pie will grow enough’ should know that I have a bridge to sell.

HiddenDragon6:30 pm 12 Oct 20

Every four years, it’s the same – ACT Labor drones on about the Liberals being “socially conservative” (they’d say the same even if the ACT Liberals had a float in the Sydney Mardi Gras) and then run a fear campaign about slashing and burning of public services. The latter is essentially a dog whistle for every Canberra household which gets some or all of its income from the ACT Government – a crucial voting bloc.

This lazy formula has worked so well – regardless of how mediocre and/or aggravating the ACT Government has been in the eyes of many. This time, even without a land rights for gay whales platform, the ACT Liberals have unexpectedly outflanked Labor on the fiscal left – and Labor is having one almighty tanty, as is their one-eyed cheer squad, which has suddenly and very belatedly developed a passion for fiscal rectitude

As I’ve said many times on this site, the ACT is fiscally unsustainable as it currently operates, and I don’t believe any candidates in this election have a solution for that. Coe’s “grow the pie” is no more a long term solution than Barr’s ridiculous assumption that household and commercial rates can keep rising, well in excess of inflation and income growth, year after year after year.

When things get really bad, the ACT will most likely be left to its own devices, with little sympathy from the rest of the country, regardless of which party holds power federally – but anyone in any doubt about the scope for federal intervention should consult section 16 of the Self Government Act.

couldn’t agree more on stamp duty. the benefits of abolishing it for a broad based land tax are very clear. To get almost every economist of every persuasion to agree is no mean feat. why exactly should those who move house more often pay face a higher burden than those who stay on the same place? this makes no sense whatsoever. the huge cost of buying and moving house by the way is why we have so many poor quality, badly insulated homes in Canberra. There is no incentive to buy up old run down properties, renovate them and then on sell them for a profit as is so common in the rest of the world as stamp duty makes this unviable. (if you doubt it have a look at the number of programmes on flipping). Instead they are bought and rented on in a decrepit state to a captive rental market. Just one of the many problems that stamp duty causes

Yes, but I like it when other people pay all the tax for the services I use.

I’ve been here for ages, I don’t want to pay…..

Someone took the abacus out of Coe’s crib. Perhaps they can teach him how to use a calculator but I think that would be beyond his mental capacity.

Id like to see a Territory equivalent to the Federal parliamentary budget office.

Whom ever is in power in the ACT gets full use of their Treasury department and also the ability to outsource financial analysis to a private company such as PWC or Natsem.

I’d rather have budget, costings and financials on wider view.

It makes no sense to have a formal PBO for the ACT – not enough work outside a few weeks of the year.

What should happen is the pre-election budget update should get moved forward (to say 8 weeks out from the election), and then the Budgeting part of ACT Treasury should become the equivalent of a PBO for the period of the election – with as you say, ability to outsource work too.

Capital Retro11:43 am 12 Oct 20

Russell Nankervis, so you and many others supported marriage equality. Wasn’t it part-time Liberal Malcom Turnbull who initiated the referendum?

Like all other Labor voters you will always vote Labor no matter what the opposition say or do.

Back in form harping on about the Liberals are you, Ian.
Conveniently ignoring Labors plan to just use somebody elses money and drive the ACT deeper into debt. Amusing, really.
Bushnell the one trick pony.

Well at least Labor is being honest about how it will fund things. Liberals trying to pull the wool over the eyes by saying you can lower taxes (i.e. reduce revenue), make a truckload of policy promises, but also not increase debt to fund it all. Any person that has done kindergarten maths could work out it doesn’t stack up.

Basically, the policy agendas on both sides suck lol. And then the greens simply don’t worry ever about how they pay for all their crazy ideas…

Capital Retro9:44 am 12 Oct 20

I don’t know why you bother writing another critique of Coe and the Canberra Liberals.

It is obvious you are a rusted on Labor supporter and there is nothing wrong with that. If the Canberra Liberals (I am a past member) were as passionate about what they stand for they may occasionally get elected.

Most people reading and contributing to this blog are Labor/Green supporters so you are only preaching to the converted.

My personal opinion is that the Territory is now a financial disaster and maybe you should be scoping what will happen when an administrator is appointed.

Mike of Canberra12:27 pm 12 Oct 20

Capital, I couldn’t agree more. After 19 years of Labor, we now find a city that is “progressively” driving out the great middle class simply on the grounds of affordability. I simply don’t buy the arguments in this article that we shouldn’t be seeking an assurance of “bang for our buck” as the Libs promise with their policies on light rail and other things. To contend that seeking such evidence shows Coe doesn’t accept light rail is to insult our right to the assurance that OUR money is being spent wisely. Oh, and to those who I know will argue that what Barr is doing is “necessary tax reform” I say this: tax reform to replace stamp duty with increased rates is one thing, gouging to fund wasteful spending is quite another. As I’ve indicated before, this policy risks turning Canberra into the Mexico City of the south: you know that place where the rich live very well, the poor live very badly and there’s precious little in between. Look at Canberra in 2032 and that’s where we’ll be. Here’s another point for Barr and his many supporters on this site who seem to believe that a tripling of rates (as I’ve experienced) is the price that we have to pay for having apparently experienced subsidised living for so long and that this policy will result in long-term residents in inner suburbs moving further out so that “productive” people can live closer to the areas of economic activity. We’re not just a bunch of economic units to be moved around the chess board as Barr seems to think. No, we’re human beings with emotional attachments to where we live. Only an automaton like Barr would fail to recognise this. Let’s restore Canberra’s dignity.

Mike,
the problem you’ve got is that you think that the previous stamp duty revenue was simply the natural order of things.

Whereas in reality, under the previous policy, there was simply a different group of people paying the same revenue. This allowed existing long term residents to be effectively subsidised to stay in place without paying for the significant amenity they gained from living on that expensive inner city land over a long time.

Under that policy there is no driver for more productive use of that expensive city land and actually a disincentive for anyone to move.

So, people are still treated as “economic units” under your preferred policy settings, the difference seems to be that you are happier when other people are paying the tax.

And no, under the changed policy settings to move to lower reliance on stamp duty, it actually benefits poorer people more because the land is used more efficiently, increasing the mix of dwellings in areas, increasing housing affordability and lowering costs.

Higher stamp duty means poorer people having to move ever further away from city services and amenity because you have expensive large blocks in the inner city being massively underutilised.

Argue against wasteful spending all you want but that doesn’t change the merits of the tax reform.

And if you’re so worried about the emotional attachments to the places where we live, the government could offer to defer rates for older/poorer people that would be recoverable on the sale of properties. If it’s about emotional attachment and not financial reasons, this would be perfectly acceptable to you right?

Mike of Canberra4:33 pm 12 Oct 20

Chewy, having read your very apt reply, I realise what a blind, selfish fool I’ve been. After all, when I moved to my current inner-suburban location 40 years ago, I was surrounded by dangerous footpaths, lousy roads and out-of-control public housing, in some cases featuring very dangerous dogs. Now, 40 years later, as my area has become gentrified, I find myself surrounded by dangerous footpaths, lousy roads and out-of-control public housing, sometimes including dangerous dogs. If only I’d realised the wonderful level of amenity I’d been enjoying all this time, I think I would have paid a voluntary surcharge to the ACT Government over that whole period for my enjoyment of these wonderful amenities!

an administrator appointed? the ACT is not a local council in NSW

Mike,
Strange then that you’re so desperate to stay in an area with such clearly poor amenity as you describe isn’t it?

But have no fear, the government’s tax reform policy will actively assist you in making it easier to move out of that horrible inner city area, to the idyllic outskirts of the city. Or perhaps to another town or the bush, where the amenity is obviously far superior.

Go on then, what’s holding you back……

Capital Retro6:02 pm 12 Oct 20

I’m glad you raised that point dolphin because I am not sure what will be the sequence of events that will follow when the bubble bursts. I chose “administrator” being aware like you that in NSW one is appointed to manage insolvent local councils in NSW and the ACT is for all practical purposes just another local council, geographically within NSW.

How would it happen, anyway? I’m sure we all want to know.

Mike of Canberra8:20 pm 12 Oct 20

Bit presumptuous aren’t you Chewy? Why should I run away? What I want is to see Canberra get better, something I don’t see happening under the egocentric Barr. I want a change from this tired, old, hubristic government to one that will look at our affairs through fresh eyes. I want a government that delivers something in return for the high revenue it is so busy collecting from us. In other words, as a swinging voter, I want to give the other side a go in the hope they may deliver us something different from what we’ve been getting. By the way, you have misrepresented my position on stamp duties. I actually believe it’s a good idea to scrap stamp duties and replace them with higher land rates, for all the reasons Barr and company have stated. What I don’t agree with is what I perceive to be a gouging approach by Barr. This divisive Chief Minister is busy setting one Canberran against another. Let’s restore our dignity shall we?

Capital Retro8:52 pm 12 Oct 20

Thanks Hidden Dragom about alerting us to Section 16 of the Self Government Act.
It’s actually the Governor General’s call and he/she will appoint a commissioner to hold another election. The Chief Minister at the time is unable to participate in the proceedings.

Andrew Barr should immediately seek another job.

Capital Retro,
Here you go, you can read all about why our government exists and what can and can’t happen.

I’m pretty sure however that we aren’t remotely close to section 16 being enacted, although I think your were facetiously referring to bankruptcy in your original comment.

https://www.legislation.gov.au/Details/C2013C00134

Mike,
When you argue against some of the clear and obvious benefits of moving to a heavier reliance on a broad based land tax, you are arguing against the reform.

There needs to be a price signal to encourage the most efficient use of land and that will necessitate that people either pay for the amenity they receive from owning that land, move or receive some kind of payment deferral from government.

This is a desirable outcome.

But if you want to argue simply against overall government expenditure, I would agree with you. For example, the fact that the government is even considering extending the light rail shows that they have little interest in efficient delivery of government services.

This is where we need to identify areas where the government is wasteful rather than just railing against increased rates, which are mostly just a byproduct of the tax reform.

Pick out specific areas of government expenditure or revenue collection that could be improved. That’s the way to hold the government to account.

He believes in miracles… seriously.

Mike of Canberra12:33 pm 12 Oct 20

So do you if you don’t recognise the economically polarising influence of Barr’s policies.

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