Time to stop digging: The ACT can't afford to ignore the first rule of holes

You’d think with talk of a new stadium from both sides, more light rail, hospital upgrades, promises of public housing for thousands, a new theatre – why not chuck in a convention centre, as well? – that the ACT was rolling in money.

You might even think that we’d solved all the problems that beset a modern city.

Except for the fact that business is drowning in red tape, that the houses we need to build tout suite are mired in bureaucracy, our main emergency department is its own running sore, we cheer when most of our students can actually read at their age level, we reduce crime by legalising everything (didn’t take long to ride that slippery slope from decriminalising marijuana to heroin and ice, did it?), our cop shops are mould-infested piles of asbestos and diesel particulate (luckily we don’t have enough police so at least they aren’t crowded – unlike our prison), our courts are notoriously soft and yet we lead the nation in locking up Indigenous people (how does that work?) while we dislocate our shoulders patting ourselves on the back at welcome to country ceremonies for the opening of an envelope … but least we have big hearts, right?

That doesn’t even begin to cover it.

We finally seem to have fixed the mowing problem and the potholes you can see from space – until the next decent rain and the roads collapse and our mowing brigades buckle under the rain + sunshine = grass equation.

What else?

The debt. Dear God, the debt.

We don’t talk about it much in the ACT. We should. The candidates should. It’s not good.

You know that Victoria’s an economic basketcase, right?

Their gross debt is $156.2 billion and their population is 6.9 million giving a per person debt of $22,637.

And you know the Queensland Labor government is trying to buy an election win despite gross debt of $147 billion with a population of 5.5 million giving a per person debt of $26,727.

Do you know what it is in the ACT?

Gross debt of $17.4 billion with a population of 470,000 gives a per person debt of $37,021.

Of course, the ACT Government prefers the net debt figure. Sure, let’s play along.

Net debt for the ACT is about $10.7 billion, giving a per person debt of $22,765 – take that, Victoria!

And that’s before we lift a shovel for an infrastructure wishlist from both sides that’s pure fantasy.

So next time you hear a promise from a candidate, ask yourself if we need whatever rubbish they’ve promised more than schools that teach and hospitals that heal and roads that you don’t need a 4WD to safely travel on.

You know who knows this? Andrew Barr. It’s a bit rich and shows a bucketload of chutzpah to lecture other parties about their spending when he spent the money to create the debt.

Is that fair? You decide. Andrew Barr became Treasurer in July 2011 and Chief Minister in December 2014.

As Jon Stanhope observed in July 2022: “In 2011 the ACT had a gross debt of $1.443 billion, and a negative net debt of $736 million, that is cash reserves were larger than the accumulated debt, and provided ample capacity to repay maturing debt”.

(‘Negative net debt.’ File under phrases you’ll never hear again, like ‘the Oscar goes to Rob Schneider’.)

In the 2014-15 Budget, when he became Chief Minister, net debt (excluding super) was $1.22 billion. Again, today, $10.7 billion.

Maybe Andrew Barr 2024 needs to meet Andrew Barr 2006.

In his inaugural speech, Barr spoke about the importance of economic management. And surpluses.

“Good governments manage the economy responsibly, and good management leads to benefits for all the community. It is what underpins the delivery of the services that Canberrans want and need,” he said on 2 May 2006.

“Running a surplus operating budget provides intergenerational equity. It means that each generation of the ACT community pays for the government services they are receiving.

“A surplus budget is vital to maintaining the territory’s AAA credit rating. A surplus budget also provides the basis for managing the risks and uncertainties that will inevitably arise in the future. That is the reason why this government has delivered successive budget surpluses totalling $250 million since coming to office.”

Ah, the good old days. When we had a surplus. And a AAA credit rating. What happened to that? Good question. We lost it. Must have left it on the tram.

Our credit rating was downgraded almost exactly one year ago, on 11 September 2023.

As Region reported: “A global credit rating agency has downgraded the ACT’s rating for the first time in over 20 years, anticipating a slower fiscal recovery from the COVID-19 pandemic and higher spending.

“The agency lowered its long-term issuer credit rating on the ACT from the highest rating, AAA, to AA+ … S&P Global forecasts that the ACT’s ratio of debt to operating revenue will reach 154 per cent by 2026, far higher than its international peers with a AAA rating.”

S&P has another update, by the way.

On 11 September 2024, they wrote: “We forecast ACT’s total tax-supported debt, as a proportion of operating revenues, will reach 179 per cent in fiscal 2027, up from 147 per cent in fiscal 2023.”

Does it matter if we were downgraded? It does. Quite a bit. That means the cost of our debt becomes more expensive.

What was that about intergenerational equity?

But the real question is, what do we have to show for it?

About 12 km of light rail and a new hospital. Doesn’t seem like we got a lot when we’re in a $17 billion hole and we refuse to stop digging.

So you ask, could the Liberals have done better? Unlikely.

If, however, by some miracle, the Canberra Liberals form government on 19 October, their promises are only likely to exacerbate the debt problem with bread and circuses we don’t need and certainly can’t afford.

So if you’re jack of the current mob, you’ll likely park your vote with a fellow traveller to Labor – Independents for Canberra. Sure, they talk a big game, and Dr Vanessa Picker in Brindabella seems to have made up her mind not to back Andrew Barr, but would a Pocock-lite party back the Liberals? Doubtful.

Could the Greens emerge as the largest party? It’s possible – very possible. Hilarity would ensue. The indignities they’ve suffered at the hands of Labor, their senior coalition partner for years, will be avenged, and that will be fun to watch.

If Greens emerge victorious, expect a lot of Labor figures to suddenly decide they’d rather spend time with their families.

HL Mencken wrote: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard”.

It will come to pass. It always does. And all debts are paid.

The election is less than four weeks away. A lot of promises will be made between now and then. One of those should be to stop digging.