A national research centre of excellence with Canberra-based workers would be targeted by a Coalition government to help achieve savings announced by Shadow Treasurer Joe Hockey.
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ACT Treasurer Andrew Barr, pictured, said $42 million in cuts to the National ICT Australia's (NICTA) centre of excellence would bring more pain for the territory as many of its programs and researchers were in Canberra.
The plan to discontinue direct Commonwealth funding to the information communications technology research centre was included with the Coalition's plans to for an additional 0.25 per cent efficiency dividend, which will pull more than $400 million from public service agencies.
The ACT government committed an extra $12 million to the centre, which was established by the Howard government in 2002, over four years last year.
"Given the innovative and important work undertaken by NICTA, this is a short-sighted decision," Mr Barr said.
Mr Barr said the Coalition's costings package "will inevitably mean job losses" because it ended "a number of programs that are Canberra based."
"All this comes on top of the 12,000 public servants the Coalition wants to cut from Canberra," Mr Barr said.
"There's no doubt this will hit the ACT economy hard, particularly Tuggeranong and Belconnen.
"The Commonwealth is 54 per cent of the ACT economy when you include their investment - their capital spend plus their actual consumption.
"So the contraction foreshadowed by the Coalition would have a significant effect on our economy."
Fairfax Media revealed on Thursday that ACT government economic planners had been told to prepare for recession in Canberra, with Mr Barr saying 12,000 job losses would set the territory economy back for years.
"It looks like there will be even greater impacts on the Canberra economy," Mr Barr said following Mr Hockey's announcement on Thursday.
"It is disappointing that the Coalition is again targeting the public service."
