CHIEF MINISTER – CANBERRA BUSINESS CHAMBER STATE OF

CHIEF MINISTER – CANBERRA BUSINESS CHAMBER
STATE OF THE TERRITORY – 31 MARCH 2015
I acknowledge the Traditional Owners of the land on which we are
meeting, and pay my respects to their Elders, past and present.
It’s always a privilege to be here at one of Australia’s great institutions,
the National Press Club.
It’s great to be joined by so many leaders of our community. Can I
particularly welcome representatives of our higher education sector, and
thank the sponsor, UNSW Canberra.
A thriving higher education sector is vital to our city’s future – something
I will talk more about today.
I want to start by emphasising the ‘two strands’ of governing Canberra.
Government leadership is bringing together what we want to do – renewing
our city – with what we must do – keeping our city’s economy strong.
If we get this task right, we can combine these ‘two strands’ – urban
renewal and economic strength – to form a strong cord for the city’s
future.
My Government will energetically pursue this task.
Canberra is confronting very new challenges and new opportunities.
For our city, in 2015, ‘business as usual’ doesn’t cut it. Canberra needs
more.
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Our urban life is changing, and we must renew our transport, planning
and urban services to change with it. Our approach to investment,
development, industry and growth must change too.
So the Government I lead is bringing a new approach. We are joining
with our community in creating a city with its own distinct lifestyle and
identity for the future – and we are very actively joining with our business
and university sector in laying new economic foundations for the city as
well.
That is why I am bringing a more active approach to attracting
investment and renewing our urban centres, and will outline today key
examples of how we will are taking control of our future:
First, a light rail system – a city-defining project to make us a city in
our own right: designed for Canberra, and benefiting all Canberrans.
Second, a drive to greater economic self-reliance - capitalising on
our natural advantages; making us less reliant on, and subservient to,
the Federal public sector economy.
And third, making Canberra a true ‘knowledge capital’ by giving our
world-class local universities structural advantages over their education
competitors.
Thriving city campuses create opportunities for development and
collaboration, innovation, and business offshoots.
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Ladies and Gentlemen, I believe this city is on a roll.
Some will tell you we shouldn’t be optimists. I occasionally hear them
shouting from the political sidelines: that we should retreat into our shell
at the first sign of wider economic instability, and not commit to major
infrastructure or development projects.
But I can feel the excitement in this city about what we are now, and
what we can become.
I share this feeling. That is why we should be optimistic. That is why my
government will be bold.
We are no longer a country town that closes down at 8pm.
We are not Sydney and Melbourne’s little brother either; we stand in our
own right as the most liveable city in the world.
We love the new precincts, like New Acton, Braddon and the Kingston
Foreshore, which have redefined living and socialising in this city.
We don’t have to lose those things that make this city special as we
grow up – our community, our inclusiveness, our bush landscapes, our
world class educational system, the lifestyle of suburbs like Curtin,
Kambah and Aranda, which so many people have grown up with, or
moved here for.
In short, Canberra is coming into its own. We are a place of brilliant
possibilities.
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I share the determination of our business and university sector, and our
community at large, to be more economically self-reliant; to stand on our
own feet.
We face the toughest external economic environment in the selfgovernment era. We’re facing both a weakening national economy and
an unfriendly Federal Government.
The task is large, but the fact is our business leaders, thought leaders,
community leaders, advocates, small businesses, and school leavers
are stronger than we’ve been before.
We are up to the job of taking an economic challenge and turning it into
a city-building opportunity – through renewing our urban fabric, putting
Canberra in a stronger and more independent position.
Transport Reform - Capital Metro
So, let’s talk about transport reform – and in particular – Capital Metro.
Simply, it’s the right thing to do for our city, at the right time.
Forward-looking public transport infrastructure is critical to the future
growth of this city. Our unique town centre design, along with our
projected population growth to 600,000 people by the 2040s, lends itself
perfectly to a fast, efficient and reliable light rail system.
It’s not just suitable, but necessary.
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It’s the right thing to do for our community. We want everyone, no
matter where they live, to be included in the social fabric of our city. We
must reduce congestion and make getting around Canberra easier – to
unlock productivity and lifestyle benefits.
The benefits of more people living close to great public spaces and
places, with excellent public transport, also helps build the innovation
economy by reaching a critical mass of thinkers and businesses in the
one area.
It is good for drivers, not just for public transport users. If you drive
up the Parkway in the morning, do you really want to be turning right and
merging with the thousands of extra cars that would be on the road
without Light Rail? Each tram takes 200 cars off the road.
It comes at the right price. It is a significant financial undertaking, but
when you look at the economic and social benefits light rail will bring,
and consider the economics of land use in our city, the decision is clear.
It builds for the future. We must invest now, when Canberra needs it,
to yield long-term benefits. That is what good governments do, and it is
what my Government will always do.
If you look at current population growth, and planned expansion, it
makes sense Gungahlin to the City will comprise the first stage – it will
the second largest district in Canberra, running a very close second the
Belconnen.
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By planning for the future – not stuck in short term opportunism – we will
lock in the cost of this project in today’s dollars, but not have to make
payments until 2019, and spread over 20 years.
But above all, Capital Metro is a vital project for economic activity in
Canberra now – when we need it most.
Over the next 3 years alone 3,500 jobs will be created from the
construction phase of this project.
Stage 1 of the Capital Metro light rail project from the city to Gungahlin is
expected to deliver $406 million in transport benefits alone.
When you include the wider economic impacts associated with land use
changes and increasing the density of activity along the proposed light
rail corridor, all up there are expected to be $1 billion in economic
benefits associated with stage one alone.
These are benefits we must unlock as soon as possible – and I am
determined they flow to local sub-contractors and allied businesses.
I’ve been asked how the first phase of Light Rail will benefit those living
in areas not directly serviced by that first stage.
That is a fair question.
The Capital Metro investment, as part of an integrated transport network,
will benefit all users of our roads, parking and buses.
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If you work in Civic, do you really want to be competing for a fixed
number of parking spots with thousands of additional cars coming in
from the North? Or be facing the increased congestion on our roads?
At the heart of the debate is this: picture Canberra in twenty years time
WITHOUT light rail.
What does that city look like?
Without it, in 15 years everyone in Gungahlin travelling to the city will
spend an hour in their car in the morning.
Everyone else will see their travel times blow out as they compete for
lane space and car parks with the new residents.
For these reasons, I am unapologetic about moving quickly on this city
building project.
We have just shortlisted two high-quality proponents and aim to settle on
a final provider and have contract close in the first half of next year, and
begin construction – begin hiring Canberrans – soon after.
In this respect, I am concerned, just as many in the Australia business
and infrastructure community are, by the reported threats to rip up a
signed and commenced Capital Metro contract.
Large scale investors and developers have started to use the term
‘sovereign risk’, which sends shivers down the spine of any responsible
Treasurer around the country.
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Every business person here knows that the system only works if we
honour contractual commitments.
We are simply not big enough and attractive enough an investment
destination to walk away from one major contract and expect private
investors to bid for the next – for a start you could kiss goodbye to
investment in a new convention centre.
That is what national and international investors are saying to me.
I trust cooler heads will prevail, because the city’s reputation is too
important to use in political gamesmanship.
The wider transport network
Of course, light rail is but one important component of Canberra’s
transport system.
Roads are a key part of how people move around the city, and that won’t
change in our lifetime. That is why we’re improving every aspect of the
driving experience, including strategic investments in our road network,
to reduce congestion from your driveway to your car park.
We are starting the roll out of new smart parking technologies to assist
people find parks more easily and reduce travel times – particularly
during peak times.
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In January, I announced the Innovation Review of Canberra’s Taxi
Industry to best utilise new companies, like Uber, providing technology
based transport solutions.
We welcome new market entrants, but must ensure the taxi industry
remains viable, and that all players meet the necessary regulatory and
safety requirements our community expects.
And we are beginning the process reform of our bus network. No one
who lives in Canberra thinks our bus service is everything it could be. No
one.
I won’t embarrass all of us (myself included) by asking how many people
came to work by public transport today, but we all know the answer is
‘not many’.
This won’t be fixed overnight, and I am committed to change through
conversation, not confrontation – but to be clear, our goal is service
improvement, efficiency and rising patronage.
Spending more on buses without reform will not deliver the public
transport improvements our city needs.
Urban renewal
My urban renewal focus goes hand in hand with transport reform.
Canberra’s structure is well-suited to intensification that is focused on
centres and public transport routes.
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Urban renewal along Canberra’s rapid public transit ways is being
implemented progressively to minimise conflicts that occur between
established areas and redevelopment.
Opportunities for businesses to locate in more affordable commercial
accommodation are part of mixed-use developments along the rapid
public transit corridors and in group centres.
A key element of this approach is the goal of a 50:50 mix of urban
renewal and Greenfield development in our land release.
The mix provides housing choice, sustainable development within
existing suburbs, and the best value use of land as a resource for the
people as a whole.
Economic strategy, fiscal consequences
The Government’s active approach to strengthening Canberra’s
economy will again be reflected in our 2015 Budget.
External actions, such as the Federal Government’s ongoing cuts and
current policy paralysis – and internal requirements, such as delivering a
comprehensive response to deal with Mr Fluffy once and for all – have
made framing this year’s Budget more complex.
But the principles upon which I base the Budget, and the proposals my
Government are working through now, remain the same: supporting a
greater economic self-reliance through a more diverse industry base,
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and fostering our natural advantages, while ensuring all Canberrans are
lifted by our successes.
Slashing and burning to meet short-term, politically-derived fiscal targets
is no way to support an economy.
We will pursue a progressive economic strategy with prudent fiscal
consequences, not a regressive short-term fiscal strategy that would
have significant economic and social consequences for years to come.
Yes we do face some significant short-term pressures but our
fundamentals remain strong: our unemployment rate of 4.5 per cent
remains low relative to the national average of 6.3 per cent.
Economic growth, measured by gross-state product, has slowed recently
as a result of the federal cut backs, but is still expected to increase 1.5
per cent in the year to June 2015.
This data reflects the ongoing resilience and diversification of our jobs
market. I am proud that we have not repeated the outcomes of 1996.
The strength of this position is reflected in Standard & Poor’s
confirmation of the ACT’s AAA stable credit rating. Of all the state and
territory jurisdictions in the world, the ACT is only one of 27 to hold this
rating – meaning we have one of the strongest balance sheets in the
world.
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Our clear Budgetary strategy in the face of these factors has been to
support local business through tough times, foster new enterprises, and
reform our tax base.
Self reliance: tax reform and business development
A key part of strengthening our economy and managing our budget is a
taxation system that accurately reflects economic activity, while
encouraging turnover, investment and expenditure.
Since I became Treasurer in 2011, I have been progressively bringing
forward reforms to make our tax system fairer, simpler and more
efficient, and to create greater fiscal and economic self-reliance over the
long term.
This drove the major changes I announced in the 2012 Budget, such as
the phased abolition of inefficient conveyance and insurance duties and
their replacement with a broad based taxation regime.
Conveyance duty, for example, adds to the cost of buying a property,
falls on a small number of people each year, and is difficult to predict.
Our reforms provide a more stable and sustainable revenue base.
They lower cost and regulatory burdens on business as well.
This is critical, because as you all know, local enterprise will play the
major role in Canberra’s fortunes over coming years.
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That’s why I am taking immediate, practical steps to make it as easy as
possible to do business here, whether you are a small, medium or large
company:
First, I established Access Canberra to create a single point of
contact with ACT Government regulators for local business people
and event organisers – Access Canberra will work with you to make
your proposal happen.
Second, we are establishing a Local Industry Advocate. My view
is that if work can be done by local businesses, we should be taking
steps to ensure that we build that capability and economic activity in
our city. It’s really important that we don’t have over-engineered
procurement processes which reward big players ahead of small
players for no practical reason.
Third, I have prioritised cutting red tape across all areas of
government.
There are obviously things that our bureaucracy can do better. That’s
why my Government continues to bring forward Red Tape Reduction
Bills to cut costs for business, and make our public sector focus on
what really matters.
Fourth, I am implementing our business development strategy in full.
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I recently reported to the Assembly that all 26 Business Development
targets we set ourselves in 2013 have been achieved. This has
included measures to attract foreign investment, and skilled and
business migrants; grow our export capabilities; partner with our
Universities to commercialise research; and maximise the value of
the visitor economy.
But now is not the time to sit back. Building on this success, work is
well underway on stage two of this strategy and I am pleased to
announce today that it will include a new small business innovation
research program.
This will see agencies across the ACT Government commit a portion
of their budgets to working with small business on research
partnerships.
Small, smart businesses will help government solve a problem and
then use that solution to sell their talents to other clients, so they get
new business not once, but potentially with numerous customers.
These have worked well in the US. I am confident this kind of smart
procurement by the government can stimulate small businesses here.
Finally, I am personally making the case for direct international
flights from Singapore and New Zealand.
I advocate this so strongly because I know it isn’t just about tourism
opportunities, as important as that is.
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The economic impact for the region is estimated to be $88 million and
690 jobs for landing direct Singapore flights, and $51 million and 395
jobs for Auckland.
You just have to look at the rapid increase in international exports of
services from the ACT in the last ten years – topping $1.2 billion in
2013-14 – to see that international flights will make Canberra a truly
global city.
The Knowledge Capital
I also want to outline the Government’s higher education policies, and
what they mean for Canberra’s future industries and workforce.
When Kim Beazley was Chancellor of the ANU he would speak with
great passion about the university’s mission as ‘nation building of the
mind, in a city of the mind’.
This city needs to support industries that create wealth and attract new
money into our economy – and there are few better ways to do that than
commercialising local research, innovation and development.
Today, we must enable our universities to build on their strengths and
attract the best prospective students, researchers, staff and investors.
I’m thinking, for example, of UNSW’s world-leading engineering course.
I am working in a co-operative partnership to grow Canberra’s higher
education sector – in particular, doing everything we can to create
thriving campuses that attract employment and collaboration.
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At least one in nine of our residents either work or study at a University
in the ACT – the highest proportion of any city in Australia.
We have more than forty-four thousand students across ANU, UC,
UNSW, ACU, Charles Sturt and CIT.
If you include the broader research sector, it adds 16 000 full time
equivalent jobs, and contributes $2.6 billion a year to the ACT economy.
In the face of widespread uncertainty about where the sector is headed
over the next decade, allowing our Universities to unlock revenue
streams is more important than ever.
That’s why I have recently signed a Statement of Strategic Intent with
the University of Canberra outlining our shared commitment to
development and growth of the University’s Bruce campus.
Last week the Assembly passed the first of a suite of legislative reforms
that will enable $1 billion in investment, development, expansion and job
creation on the UC campus and in the surrounding community.
Those changes were accompanied by some wider debate about our
local universities in the Assembly in recent weeks.
Speaking as Chief Minister of the ACT, and a graduate of our local
schools and institutions, I’m proud of our universities, and proud of their
leaders, never more so than when they are voices on the national stage.
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Our city, our time
Today I have spoken mainly about the economy, but social inclusion is
critical to building the best possible Canberra - a vibrant, multicultural,
cohesive and supportive place to live.
I have appointed a new minister assisting on social inclusion and
equality, Yvette Berry, and we will have more to say on this in the future.
I leave you today with the message that I am leading a new
Government, with a new focus: one that assertively promotes and
supports business in these challenging times, and one that has a clear
vision for Canberra’s future.
Canberra is changing, and it takes leadership to make that change work
for the benefit of all Canberrans.
My Government will be different from those that have come before. Our
economic circumstances demand a different approach.
I share the confidence and optimism of our community for the future –
we know our city is truly coming into its own. Together, we’ll renew our
city and strengthen our economy.
We’ll do this the Canberra way: creative and clever, innovating and
investing, building for the future and sharing as a community.
Our values and strengths will ensure that this is Canberra’s century.
Thank you.
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