Chief Minister's ‘State of the Territory’ address
Address delivered by ACT Chief Minister Katy Gallagher
Thursday 13 March 2014, National Gallery of Australia
I acknowledge the traditional custodians of the land we are meeting on, the Ngunnawal people. I acknowledge and respect their continuing culture and the contribution they make to the life of this city and this region.
- Prof Michael Frater, Rector, UNSW (Event sponsor)
- Andrew Barr MLA, Deputy Chief Minister and Treasurer
- Michelle Melbourne, Chair, Canberra Business Council
- Chris Faulks, Chief Executive, Canberra Business Council
- Business Council members
Thanks for the opportunity to address you today and share with you the ACT Government’s outlook on the Territory at a time of great importance for our economy and our city.
I will take some time to reflect on the current state of play as we move towards a crucial few months before I speak in detail about key priorities for the ACT government.
I’m also pleased to be able to announce two important initiatives as part of our plans to continue to improve liveability in our city and diversification in our economy.
It goes without saying that my team and I have planned for various scenarios from the federal budget and prepared ourselves to act where intervention is warranted.
But the point I want to make clear today is that we won’t be hitting the panic button.
The ACT Government’s long-term commitments to economic reform and fairness in our community will continue.
There are some exciting initiatives taking shape which reflect this fact and demonstrate that we are already seeing the emergence of a stronger, more diverse economy.
As I speak about these and the government’s commitment to stay the course on our own commitments, I hope you hear at the very least an echo of your own ambitions for the future of our city.
Today marks exactly two months to the handing down of the next federal budget1 and possibly less time to the release of the government’s Commission of Audit.
Obviously, the ACT Government awaits both documents with interest and I expect that each of you are doing the same.
It would be very easy to join the voices of doom and gloom and the associated speculation that comes with that. But instead I think we should deal with the facts that we know and then focus on the vision and the opportunities that will present themselves over the next few years.
So some facts.
- it’s six months since the federal election and the start of a series of cuts to Commonwealth agencies
- it’s two years since the federal spending contraction began in earnest
- and it’s six years since the Global Financial Crisis first sent tremors through our economy.
Throughout this period, the fundamentals of the ACT economy have remained strong:
- forecast economic growth for 2013-14 is unchanged from last June (1.75%)
- retail trade figures are positive (growth of 3.4% in year to January 2014)
- population growth remains steady, and
- employment growth in our economy is slow, but steady2.
The combined efforts of public and private sectors have driven growth in investment, exports and jobs and shown an economic resilience which not everyone thought we had.
The fact that unemployment remains at 3.8% – the lowest in the country – is helping keep other economic vitals such as housing and retail activity in shape.
Just as importantly, it is maintaining levels of confidence and cohesiveness in our community.
Stimulus and job creation
Protecting the livelihoods of working Canberrans remains a core priority of our through 2014.
The question becomes, what is the best way for the territory government to support local jobs?
Pumping vast amounts of money direct into the economy is neither within our means or our economic philosophy.
We have worked hard to earn our economic credentials, strong budget position and a triple A credit rating and we use these advantages strategically.
We have created capacity for government to invest in productive infrastructure which attracts private sector buy-in and delivers a long-term dividend to our economy.
The $480 million Canberra Airport project is a great example:
- it drew a high level of private investment
- it has helped create an attractive commercial precinct
- it delivers a major capability boost for tourism across the capital region
- the infrastructure is ready for direct international flights, and
- it directly connects to the Majura Parkway, which itself is estimated to deliver a $1 billion dividend in the long term.
We have also been able to act to pump-prime the vital construction sector through the stimulus package announced last week.
This package was a direct response to the advocacy of local industry groups for changes, in particular around lease variation and extension of time charges.
The package also offers a boost for housing affordability through the accelerated development in Moncrieff and we want to see industry continuing to innovate in the construction of quality, affordable housing.
The government’s land release program now includes a pipeline of more than $500 million in landscape and civil works across the greenfield and infill estates in the ACT.
Now, as the government painstakingly frames the 2014-15 budget – bid by bid, line by line – we’re maintaining the strict discipline and budget strategy these times demand.
The snapshot I’ve provided before sums up why we are better-prepared for the coming challenges – as a government, as a business community and across the economy – and certainly better than we have been in the past.
But it’s vital that government maintains a level perspective.
The ACT Budget – as 9% of our economy – can respond to federal belt‑tightening, but not savage austerity.
Our exposure is easy to see:
- the Commonwealth’s ACT workforce is three times the size of our own and we cannot absorb large redundancies3
- our GST revenue continues to decline relative to the services it’s supposed to pay for and further cuts to that will hurt
- direct funding for vital reforms and community services, if cut, would undermine hard-won gains for our schools and some of our most vulnerable citizens.
For my part, I am resolute in delivering on promises the ACT government has made to our community – including our commitments under national reforms:
- our frontline health workforce and health infrastructure will grow
- our disability sector will be supported to transition to the NDIS
- our school resourcing will increase, with all schools across Canberra resourced to the Gonski resourcing standard, and
- we will continue delivery of our ambitious plan to stop rising obesity rates.
I led a delegation of key business representatives to meet with Assistant Infrastructure and Regional Development Minister, Jamie Briggs, last month.
Minister Briggs is aware that our employment and growth are our top priorities and it’s important that government and business remain united on this front.
Our early discussions have been very productive and he has shown encouraging interest in working with us to progress plans for the widely supported convention facilities.
We will continue regular meetings with Minister Briggs and have agreed to meet again once the federal budget is handed down in May.
While I put great value on a good working relationship with the federal government, I think in this room it’s important to acknowledge there is a limit to what support we can expect to receive.
That’s why we aren’t waiting around for bad news to come to us.
We have acted early on economic stimulus and we are pressing ahead with perhaps the most ambitious tax reform agenda in Australia.
Too often this reform program is dumbed down in a tabloid discussion about rates, but I believe there is broad support in our business community.
We are heading towards a 9% improvement in the efficiency of our tax base by 2016-17 – in other words, a yield of $57 million for our economy which is no longer absorbed by administration and compliance.
Sales activity in the commercial sector has increased following our decision to drop commercial conveyance duty to 5.5% for properties valued at $1.65 million or greater – now amongst the lowest rates in the country.
And our support for small business through the reduction of payroll tax4 is also delivering important support, both to individual businesses and to the government’s drive for diversification.
Australia’s experience has shown that the early movers on economic reform reap the rewards.
And, whilst we may be the smallest government in Australia – we don’t lack ideas; nor courage; nor the willingness to cast aside the misperceptions of others and lead the way on big changes which will have long‑term payoffs for our community.
City Plan and Capital Metro
It is our fundamental belief in the potential of the ACT and broader regional economies which drives our ambitious agenda.
But a great economy demands a great beating heart, which is why I’m pleased today to release the final version of the City Plan, which has been released publicly in its draft form before – which really shows a step forward in the transformation of our city centre (visit the City Plan website ).
The views of 15,000 Canberrans have been combined with the work of expert planners to set the direction for what will be a transformation in Civic.
People want a greater pedestrian and public transport focus in the city. They want less through-traffic, more appeal and a stronger identity.
Flattering as it is to hear things like “Braddon’s looking more like Melbourne all the time” or “even my Sydney friends would like this place”, we’re not here to seek comparisons.
Canberrans want a city centre which says “Canberra” and the overwhelming sentiment is they want it sooner rather than later.
The City Plan creates a blueprint for this transformation to happen:
- a framework for extensive residential growth in Civic
- plans to progress major infrastructure projects, and
- a permanent bridging of the divide between the city and the lake.
The government will be announcing in the new future the fast tracking of some of the next stages of the City to Lake Project and I look forward to selling the project in China next month as part of the Prime Minister’s trade delegation, and the Deputy Chief Minister will be doing the same in Singapore and in Hong Kong in June.
It is a plan to guide decision making for public and private sectors and encourage the next phase of our city centre growth – a process already well-underway.
It will steer the city centre towards the commercial and cultural hub which both our city and regional communities have said it ought to be.
Under the plan, which was funded by the Commonwealth’s Liveable Cities Program, the ACT is investing to progress key projects such as the Parkes Way split boulevard and the redevelopment of the ABC flats.
Perhaps the defining feature of the City Plan is the introduction of light rail as the spine of our future public transport network and catalyst for an economic resurgence along Northbourne Avenue.
Let’s be clear, transport pressures in the Civic-Gungahlin corridor are not a future prediction; they’re here now.
With five times the Territory’s average population growth, combined with car dependency at around 90%, this corridor is a major pressure point on the transport system and the economy, with projected costs running into the hundreds of millions of dollars.
Capital Metro is not only a transport solution, it’s a city-building project – a major capital investment which delivers against other key priorities I am laying out today:
- its a catalyst for economic growth and development, with a major uplift effect along the corridor
- a centrepiece in the transformation of the city centre
- a high quality connection with the new Dickson development announced last week by the Treasurer
- a driver of commercial growth in Gungahlin town centre
- a more active, healthy and affordable transport option for Canberrans
- a template for the transport system of the future, and
- a project which will pick up some of the spare capacity created by the completion of other major infrastructure projects.
That is why we choose to invest now, with the long term firmly in our minds.
The government’s Capital Metro Agency will be far more visible in the city this year as it ramps up its work program of planning and consultation.
The City Plan also reflects broader elements of the government’s productivity and public health agenda in our support for active living.
And if I could just paint this picture (and I am conscious that I’m speaking just before dessert arrives):
- In Canberra we have one of the most overweight metropolitan populations in Australia which in turn, is one of the most overweight countries in the world
- despite the highly educated nature of our community and the abundant access to quality food, we Canberrans are well on track for as much as 80% of the adult population to be overweight or obese by 2025. Now there is a target we don’t want to achieve.
- if these trends go unchecked or unchallenged, our public health costs will threaten the sustainability of every other part of the budget and completely undermine the gains we’re working so hard to achieve elsewhere5.
I do want to make it clear that our goal – which is simply to stop the growing levels of obesity at the current rate of 63% of adults being overweight or obese – is not about nannying people or restricting their fun or individual freedoms.
It’s a call to action (similar to the campaigns run over previous decades in relation to smoking) – a call to action across the government, business and community sectors – to be part of the solution on obesity.
It goes to the heart of liveability and productivity in our city – these are assets we’re very proud to lead the way on (as attested by the recent MyCity survey) and we need to keep working to improve them.
Interestingly, some developers are already at the forefront of designing facilities which encourage active transport, outdoor recreation and connections to public infrastructure which do the same6.
A city centre which has reached its potential – particularly as the economic heart of the region – is also going to support further diversification.
We believe in the ability of this economy to compete and succeed, not only in construction and property development, but in other high-skilled, high-wage industries of the future.
Many of you are familiar with the government’s diversification agenda which is lead by the Deputy Chief Minister, which is heavily focused on growing the economy through human capital.
As with our macroeconomic reform, this program is yielding results:
- sustained growth in higher education exports
- our IT industry maturing and attracting global attention
- regional tourism continuing to grow.
Global markets are vindicating our decisions to invest in sectors where our economy has distinct advantages and these success stories are all contributing to the headline economic indicators I have mentioned, and we want to see them do more.
Our tertiary institutions are at the heart of our growth as a knowledge-based economy.
Canberra’s place in the global education market and its recognition as a study destination are firming up and we are very deliberately building on the research base which drives innovation, attracts talent, supports business formation and generates growth.
More than 10,000 international students are spending more than $440 million in our economy each year and the education sector now generates 11% of our tourist activity.
Our direct links in Asia are strengthening and this is an agenda I will be pushing strongly during my trip to China with the Prime Minister next month.
Let’s remember that our world class education sector is also home to world class research organisations such as CSIRO, NICTA and Geosciences Australia, and the John Curtin School of Medical Research.
Looked at in its whole, this sector includes 45,000 people in this region and contributes $2 billion to our economy.
No other jurisdiction has an education industry so significant to its makeup, which is why the ACT must continue to assert itself as Australia’s learning capital.
On top of direct investments in our institutions, we are working at a strategic level to identify the future opportunities in this sector and promote it to the world – most notably through our StudyCanberra program.
One of the true signs of innovation is in the commercialisation of some of the talent and ideas which are so present in Canberra today.
The Canberra Business Council is an active partner in helping us to nurture technological innovation and this work is added to by Invest Canberra and the new private sector investment framework.
Together, let’s dispel the idea that a government town can’t compete globally at the cutting edge of innovation and digital technology.
The government’s determination to do this, is the reason we have developed a strategy to create a truly digital city.
This strategy is set out in the Digital Canberra Action Plan which I am releasing today7 (Visit the Digital Canberra Action Plan website ).
Backed by a $4.4 million investment, the plan shows our vision to develop and promote Canberra as a modern, dynamic, digital city.
It provides the roadmap of how we are going to accelerate business engagement with the digital economy and help businesses access new customers and markets.
And it puts new impetus behind the government’s commitment to lead by example – using technology to be a more open government, making it easier for people to access our services, innovating in how we engage with the community and cutting red tape for local business.
In other words, we as government are moving towards “digital by default” and we are enabling the most tech-savvy community in Australia to do the same.
Today I’m pleased to announce the five priority projects to kick off the action plan.
- The roll out of free Wi-Fi in Canberra will start to come online in Civic from the second half of this year. Free Wi-Fi will then roll out in other town centres and commercial precincts to deliver the benefits of greater connectivity across the ACT.
Once complete, the Territory’s network will be the largest free outdoor public network in Australia. While not a service for business directly, it will create yet another incentive to be active online and engage with fast-growing digital media channels.
- We will see Garema Place become the centre of digital innovation in Canberra through the creation of a dedicated digital space and digital screen. The space will create a new forum for the meeting of creative minds and creative digital ideas in the city. It will be a very visible reminder of Canberra’s excellence in the digital world and another illustration of contemporary urban development in the heart of the city.
Connected to the Garema Place digital space, we are looking to create a digital and innovation hub as a service centre for digital government and the digital economy.
This hub would help concentrate the development and incubation of digital ideas – building both the culture and the capability of the sector through practical support to connect innovators with applications in government and industry.
- Digital Business Capacity Building Workshops, delivered in partnership with the Canberra Business Council and individual vendors, which will respond to research the government carried out last year around the digital capabilities and needs of our business community. We will invest $80,000 to give our business community the practical assistance to make the most of the digital economy and achieve the growth it can help deliver.
- In further support for businesses which choose to up-skill, grants totalling $225,000 for Science, Technology, Engineering and Mathematics internships will offer the private sector, ACT Government support in training of their staff.
- Finally, the Innovation Pitch Panel – which I know members of the Business Council have put to me as an idea over the years – will create a forum for local innovations aimed directly at the ACT Government.
We know that some of the best ideas come from outside of government and we want to make sure there are no barriers to us being early adopters of local digital innovations which may save money or improve services.
As with higher education, a globally competitive digital economy in Canberra is no longer just an aspiration8.
Even for businesses one or two levels removed from the IT sector, the evidence clearly shows that those with a strong digital presence are far more likely to be growing and recruiting.
I believe the same lessons apply to government and we will continue to increase our own capabilities.
Now, as I look ahead, I see a city with the fundamentals for an exceptional decade.
If our centenary year was a test of community spirit and culture, this year will be a test of economic mettle.
Today I have set out to make it clear that in our mind, our economic program is inseparable from the broader agendas of liveability, productivity, urban renewal and good public health.
I believe it’s our investments and advantages in these areas – in precisely these areas – which put us in good stead to respond to economic challenges and to overcome them.
As leaders in this city, meeting this potential is a responsibility we all share.
Thank you very much.
1 To be delivered on Tuesday 13 May
2 Recent budget review included unchanged forecast for 2013-14 employment growth of 0.25%
3 APS is 34% of ACT workforce, compared to ACTPS at 11%
4 Payroll tax-free threshold has increased to businesses with turnover up to $1.75 million
5 Peter Dutton’s speech to CEDA on 19 February made a similar point re sustainability of the health system
6 The Loop in Belconnen is a recent example (Rock Development Group)
7 The plan is available online and a dedicated website will be launched shortly
8 Eg. the US$76 million Lithicon sale is returning $11 million plus licensing revenue direct to the ANU; Microsoft and Lockheed Marton have invested many millions in facilities and staff in Canberra.