We all knew that the 2014-15 Federal Budget would bring challenges to the economy and the private sector in Canberra and the surrounding region.
After two years of speculation and rhetoric about the number of public service job cuts we now know that the Australian Public Service (APS) will be literally decimated – a massive 10% of the APS or 16,500 jobs will go (at 30 June 2012 there were 168,580 staff in the APS) – with more job losses to come and, if Senator Abetz is to be believed, more agencies will be moved out of Canberra. This will mean 6,500 job losses in the ACT, including 2,000 in 2014-15.
Yes Canberra, designed and built as Australia’s National Capital and the seat of Federal Government, is predominantly a government city with approximately 39% of the ACT workforce employed in the APS. But the ACT and region also has a vibrant and growing private sector and the evident reality is that the majority of the 26,000 businesses in Canberra, (96% of which are SMEs – i.e. they employ less than 20 people) rely heavily, either directly or indirectly, on the public sector to survive.
That doesn’t mean that the APS should just keep growing. We support the Budget’s focus on reviewing the scope and improving the efficiency of Government, while recognizing the vital role played by the APS in delivering the core functions of government.
Sharing the load
Disappointingly, Canberra residents are effectively being asked, in the Budget, to make a greater contribution than other Australians. Where other regions have been hit with cuts to their primary employment and economic base, such as the loss of the motor vehicle industry in Geelong in Victoria, and Elizabeth in South Australia, substantial structural adjustment funding has been allocated to help them to build new industry sectors. The ACT has received no funding for structural adjustment or enabling infrastructure.
When the Howard Government cut about 12,000 public service positions in 1996 it forced the ACT economy into three consecutive quarters of negative growth (recession); house prices fell and the housing market took years to rebound; unemployment reached almost 9% and business bankruptcies increased by 80%.
Yet, even in the midst of this bleak period Prime Minister Howard invested in over 20 major enabling infrastructure projects in Canberra to assist the economy to adjust – projects like The National Museum of Australia; The Australian Institute of Aboriginal Studies; Anzac Hall at the Australian War Memorial; The National Portrait Gallery; the extension and refurbishment of the National Gallery of Australia and the National Centre for Christianity and Culture – to name only a few.
At the local level, the ACT is being asked to do more than its fair share of the heavy lifting. Not only are Canberrans, businesses, the ACT Government, high income earners, families, seniors and individuals making a contribution to repair the budget like the rest of Australia but, due to our economy’s heavy reliance on Federal Government procurement and employment, the ACT is being asked to shoulder a disproportionate burden by carrying the lion’s share of the savings from public service job cuts. Disappointingly, there is no offsetting investment coming to the Territory to stimulate growth in other areas.
For an assessment of the impact of the Federal Budget on Canberra and the surrounding region, visit www.canberrabusinesscouncil.com.au
ACT Budget Breakfast
Date: Wednesday, 4 June 2014
Time: 7:00 AM
Location: National Press Club,
National Circuit, Barton
Speaker: ACT Treasurer, Mr Andrew Barr MLA
Members $85 (inc GST)
Non-Members $100 (inc GST)
Table of 10 (Members) $800 (inc GST)
Table of 10 (Non-Members) $950 (inc GST)
To register:
www.canberrabusinesscouncil.com.au/events/
or call 02 6247 4199
