The gloves are off: Barr and Lee go toe-to-toe over economic credentials and costings

The ACT election has erupted into open warfare over the major parties’ economic credibility, arguably the decisive issue of the campaign, as voters prepare to cast the first votes on Tuesday (8 October).

Chief Minister Andrew Barr has been sniping at the Canberra Liberals’ costings and fiscal policies all campaign, but with Opposition Leader Elizabeth Lee officially launching her bid to overturn 23 years of Labor ascendancy and releasing a business policy that cuts taxes and charges, he unleashed a full-throated attack on the party’s economic credentials.

Calling it a rehash of Alistair Coes’s failed Lower Taxes Better Services campaign in 2020, Mr Barr rubbished the Liberal plan as magic pudding economics and said they had a billion-dollar revenue hole at the heart of their plans.

He also accused the Liberals and the Greens of either delaying the submission of policies for costing by Treasury until it would be too late to assess them properly for voters, or of being incompetent.

This provoked a stinging reply from Ms Lee, who rejected Mr Barr’s “absurd” figures as the act of a desperate man and said he had form making simple accounting errors.

Earlier, Ms Lee had announced capping growth in commercial rates at the long-term Wage Price Index rate of 2.2 per cent for the next term of government, as well as reducing the payroll tax rate from 6.85 per cent to 5.45 per cent for wages up to $5 million.

Ms Lee has already committed to capping general rates increases at 2.2 per cent.

The business package also included a new deregulation framework, the scrapping of the City Centre Marketing Improvement Levy, a ‘Canberra created’ grants scheme to support buying local and a Business Continuity Guarantee that will support businesses impacted by avoidable delayed public works programs.

A tourism industry package promised to continue with the proposed new Lyric Theatre and bring back the Supercars Championship to the ACT, to be held at EPIC.

It also included a $1.5 million events attraction fund, $4 million worth of grants in matched funding for eligible wineries, breweries and agricultural businesses, an additional $5 million to improve and establish new outdoor tourism facilities in surrounding parks and bushland and an increase to the ACT’s destination marketing budget by an additional $4 million over the next two years.

Mr Barr said the Liberals would be forgoing around a billion dollars of revenue, and their spending commitments would now be in the multibillions of dollars.

“We’re back in Alastair Coe magic pudding economics world here, where revenue is going to be significantly reduced and expenditure significantly increased,” he said.

“So the obvious question is how are these promises going to be delivered? Who’s going to pay for them?”

Mr Barr said the budget position would necessarily have to deteriorate, services would need to be cut, and the wage rises of government employees put at risk.

He said the deadline for submitting policies to the Treasury was this Friday, but neither the Liberals nor Greens had submitted a single commitment.

“It really reaches a point that Treasury can’t provide detailed costings,” he said.

Ms Lee, who has claimed revenue would actually increase, said the Liberals’ plans for accelerated land releases would generate more than $900 million in revenue, not including the revenue from ongoing rates from these land sales.

She also said there would be savings from not proceeding with light rail Stage 2B to Woden, for which about $90 million had been provisioned in the forward estimates and the entertainment pavilion, expected to cost $250 million.

“How the Treasurer of the ACT can come to the conclusion that reducing payroll tax from 6.85 per cent to 5.45 per cent for a bracket of $2 million to $5 million would cost the Territory over half a billion dollars shows he is either misleading the public or incompetent,” she said.

“I am confident the policies we have released are sustainable and will provide real relief to households and businesses who have been slugged by Andrew Barr for years to pay for his mismanagement and waste.”

Ms Lee slammed Mr Barr as the worst Treasurer in the country who had not once delivered a surplus in 13 budgets.

“He’s clearly under significant pressure and feeling desperate, highlighted by his continuous mudslinging and negative fear campaign because he has run out of ideas and run out of energy,” she said.

“Canberrans expect and deserve a campaign on positive ideas for Canberra. Sadly, all they’ve received from Andrew Barr is a politically lazy, immature fear campaign that belongs in student politics.”

Mr Barr raised the spectre of service and job cuts to make up for revenue shortfalls.

“If they intend to implement the policies that they’ve announced in the form that they have, the only way to pay for that is by cuts across other areas of the budget,” he said.

“The only thing they have said on the public record is that they would commission a commission of audit.

“Where those have been done federally and in other states, that’s led to significant reductions in public sector employment and cuts to public services across the board.”

Mr Barr defended his government’s spending over the years, saying it had delivered three new hospitals, community health facilities in Walk-in Centres, a dozen new schools, the Woden CIT, new bus depots, electric buses, and light rail.

“That’s just a snapshot of where the infrastructure investment has occurred,” he said.

“So you can track back over the last several budgets to see where we have borrowed and what we’ve invested in.”

Mr Barr said the current staged infrastructure program meant the Territory was at full capacity and he questioned where the Liberals would get the workforce to build a stadium, convention centre, Northside Hospital and a theatre, all starting presumably in their first term.

He said the Supercars race never stacked up financially, with the cost of fitting out EPIC at $10 million and any subsidy affecting funding of other tourism events such as Floriade.

The Canberra Liberals are expected to provide policies to Treasury for costings before the election.