API – ACT Industry Forum Chief Minister Andrew Barr
I think our whole city can be proud that we are stronger today than we have been at any time in our past.
Thank you to the Australian Property Institute for the opportunity to speak today.
You’ve heard this morning a few of the key drivers of the ACT economy and property markets over the next few years, like education and international student growth, and attracting international capital. I’ll touch on those key issues in a moment, but I’d like to start today by talking about the two areas of governing Canberra I want to combine into the strong foundation of our future: renewing our city and keeping our economy strong.
Firstly, I would like to recognise our friends from China who have joined us today. I have recently returned from a brief tour of Beijing where I helped promote our world-class tertiary institutions – the ANU and the University of Canberra. The trip provided me with some great ideas on how we can further build on the strong relationship our city has with China.
Historically, it has not been possible to talk about Canberra’s economy without talking about the dominant role of the federal government. In the past, it’s not so much that the decisions made on Capital Hill that were the elephant in the room – they were the walls, floor and roof of the room itself.
But Canberra has changed, and I think investors around the country and the region are starting to notice that the state of the Commonwealth Public Service doesn’t dictate our economy to such an extent any more.
Of course Canberra’s economic future remains linked to federal government activity. After all, it’s why Canberra exists, why we’re unique, and why we’re not meeting today on the shores of Sydney Harbour or the Yarra.
But if we look at the impact of federal government decisions in 1996 and the last few years – each of which took large numbers of workers out of Canberra’s economy – we can see that the Canberra’s economic performance has started to be driven by our own ideas than the decisions imposed on us.
In 1996, the new conservative Federal government cut 3,100 jobs from Canberra. Total employment fell by almost 5,500, unemployment ballooned to 8.5%, and population growth stalled over the following three years.
With numbers like that, I don’t think anyone here will be surprised to hear the property market was hit hard, cutting $25,000 from the price of the average Canberra home – when the median house price in Canberra was around the $160 thousand mark.
I took this bitter lesson to heart. We simply couldn’t let our economy remain at the mercy of the decisions of others. We had to become a city in control of its own economic destiny; that looked outward to find new markets for the things we produce; outward for investment to keep us growing.
Today, the results are clear.
Once again, we’ve had an incoming Federal conservative government cutting jobs – over 8,000 of them to date. These cuts affected 3% of our workforce: a bigger proportion of the workforce affected than in the shutdown of Holden and Toyota’s Australian operations combined.
Our local economy, more diverse than last time and supported by the Territory Government, saw total employment fall by just 2,600, despite over 8,000 jobs cut – which reflects the resilience and capacity for the wider ACT economy to pick up skilled people.
At 4.5%, our unemployment rate is still well below the national average of 6.3%. And our population has kept growing, too: by over 10,000 over the past two years. The property market has therefore not experienced the falls of 1996.
I think our whole city can be proud that we are stronger today than we have been at any time in our past. Building on that economic strength will be at the core of our 2015 budget.
External and internal shocks, like the federal government’s cuts and the need to deal with the public health risk posed by the Mr Fluffy asbestos issue once and for all, have made the framing of this year’s Budget more complex.
But that complexity hasn’t changed our priorities: attracting investment and driving economic self-reliance to lift the prospects of all Canberrans.
We will pursue a prudent, progressive fiscal strategy, because a short-term slash-and-burn exercise that looks only at the bottom line, and not the economy or the people who make it up, would have significant economic and social consequences for years to come.
Canberra’s economic and budget fundamentals remain strong.
In that environment, the right strategy is to use our budget strength to support the local economy, foster new business, and reform our tax base to make sure we remain the best place in the country to invest.
Our tax reform program has a simple goal: making our tax system fairer, simpler and more efficient.
We have already abolished commercial land tax, and duty on short-term leases and the transfer of sub-leases. We are abolishing duty on insurance, phasing out conveyance duty, and reducing payroll tax. We have slashed the top rate of stamp duty from 7.25% to 5.25%.
These are all inefficient taxes that discourage turnover and investment, and we’re replacing them with a broad-based land tax.
Our tax reforms will leave Canberra with a more efficient, more predictable, more sustainable, and – perhaps most importantly – more business- and investment- friendly tax system.
Not only will Canberra have a more efficient tax environment for business, but doing business in Canberra should be as easy as possible.
I have been strongly advocating for direct international flights to Canberra from Singapore and New Zealand. This will mean so much more than tourism opportunities, important as they are – but will mean international businesses and investors are only one flight away from their Canberra partners.
One of my first acts as Chief Minister was to also bring all of government’s regulatory functions to a single place: Access Canberra.
I have given Access Canberra clear operating instructions to work with business to get things done; to find 10 ways to make good ideas work, not 100 reasons why they can’t; to measure their regulatory success by the projects they facilitate into being, not the fines and breaches they issue.
I want them to help businesses find new and innovative ways to use our places and spaces – and that is exactly what they are doing.
As well as making sure our economic settings are as competitive as possible, the government is actively helping businesses in Canberra flourish by reaching out to the investment community.
Invest Canberra takes our local businesses to the world, and brings the world to our major projects. Invest Canberra’s outreach saw national and international companies bid for – and win – in our recent wind energy auction, and make Canberra the headquarters for their Asia-Pacific wind energy business.
Invest Canberra was also crucial in bringing the world’s best to take part in the transport project that will re-shape our city: Capital Metro.
Capital Metro will help support our economy in the short and medium term - providing 3,500 jobs during the construction phase - and change the shape of the city.
Capital Metro is a crucial investment in improving both Canberra’s transport infrastructure, and our economy as a whole. Urban renewal projects along the length of the line will stimulate the Territory economy through public and private investment, delivering new and innovative housing for our residents, and new commercial spaces and opportunities for new businesses.
At one end of the line is Gungahlin, Canberra’s fastest-growing region.
Along the mid-section of the line is the Northbourne Avenue public housing precinct. My government is committed to renewing our public housing stock, and will bring these large, centrally located sites to the market over the next few years as part of the federal government’s asset recycling scheme.
At the end of phase 1 of the Capital Metro line is the City to the Lake project. This project will re-orientate our city centre to take full advantage of the wonderful body of the lake that helps define our city.
A re-developed waterfront, city stadium, aquatic centre, law courts, a convention centre and new residential buildings will bring more life, more economic vitality, and more vibrancy to our city centre.
The early stage of our urban renewal program is already attracting international investment.
We’ve recently welcomed Aquis to our city through their investment in the Canberra Casino. I am excited by the interest we are attracting from some of the world’s best, and I look forward to that continuing as we release City to the Lake sites with even greater potential.
Urban renewal of this kind is central my vision of Canberra’s future. I think it’s obvious to locals and visitors alike that Canberra is a perfect template for urban renewal: places like Braddon, New Acton and the Kingston Foreshore attract people, businesses and events that make city life so exciting.
Increased density and mixed-use developments in our town centres and along public transport routes will provide places for new businesses to grow, and give people a wider range of choices about where and how to live.
At the heart of our approach to urban renewal is our goal of a 50:50 mix of urban renewal and greenfield development in our land release. This mix will provide housing choice, sustainable development within existing suburbs, and the best-value use of land as a resource for the people of Canberra as a whole – while at the same time driving jobs growth and providing commercial opportunities.
Urban renewal is also at the centre of our efforts to ensure Canberra truly becomes Australia’s knowledge capital. One in nine of Canberra’s residents already work or study at a university in this city, and the higher education and research sector adds 16,000 full time jobs and $2.6 billion a year to the ACT economy.
There is no better way for this city to attract investment and grow than by supporting that local research effort to commercialise, innovate and develop into successful businesses.
My government is working in cooperation with our institutions to grow our higher education sector. We are doing everything we can to create thriving campuses that create employment by attracting the best students, the best teachers, and the best minds.
I recently signed a Statement of Strategic Intent with the University of Canberra, which outlines our shared commitment to grow their campus. Earlier this month the Legislative Assembly passed the first of our reforms to enable $1 billion in investment and development on the UC campus, including innovation, health and sports precincts, residential housing and aged care.
This work combines my key priorities: growing a stronger economy by supporting our higher education institutions, and driving urban renewal to create vibrant new places for Canberrans to live and work.
In conclusion, the ACT Government will continue to diversify our economy. We will do that by using our budget levers to improve the business environment, and build our areas of competitive advantage, like higher education.
And we will concentrate our efforts in areas that will re-shape our city for the future. We will do that by investing in transport infrastructure to create a new, urban spine for our city, and drive urban renewal in our town centres to give residents our residents a wider range of housing choices.
In both of these goals we look outward: to the best ideas, the best minds, and the best practitioners the world has to offer. We need investment to grow our city, and I know we have plenty to offer. My government will welcome and support private investors, and will work hard to remove the barriers to entry these investors may face.
I leave you today with a simple message: I am leading a Government that assertively promotes and supports business in these challenging times, and one that has a clear vision for Canberra’s future. A Canberra with a strong, independent, and inclusive economy. A confident Canberra coming into its own; a Canberra strong enough to protect its distinct identity while it builds its renewed urban future.
I look forward to working closely with you as we take the opportunity to build Canberra’s future, together.