ACT Chief Minister Andrew Barr has not ruled out residential development west of Tuggeranong, but said it would be some years off.
The ACT was already developing greenfields areas in the Molonglo Valley, Gungahlin and Riverview in West Belconnen, and could not sustain opening a fourth development front at the moment, he said. It would also have to consider the cost of shifting infrastructure over the Murrumbidgee River.
"I'm not opposed to looking at it, but it's not on our short-term agenda nor on our medium-term agenda," Mr Barr said. "It is certainly worthy of examination as a longer-term proposition - but by that I mean at least 10 years away, if not longer, before anyone would be living there."
Mr Barr was responding to news that the federal government wants to curtail the reach of the National Capital Authority over planning in Canberra, restricting the authority's control to the parliamentary triangle, the major entry roads to the city, and the inner hills and ridges. It would no longer have a say over the Namadgi National Park, the Murrumbidgee and Molonglo river corridors and the Tuggeranong area, where the ACT Government would have sole planning control. The change has been pushed by ACT Senator Zed Seselja, who wants to see residential development west of Tuggeranong.
Mr Barr, who met with Regional Development Minister Jamie Briggs on Thursday, said he was satisfied the proposal wasn't a "cost shift" and agreed that the National Capital Authority should be focused on the parliamentary triangle in particular.
The proposal met with a mixed response on Thursday. The Property Council of Australia was concerned about control going to a much less efficient ACT planning department.
ACT executive director Catherine Carter said she welcomed anything that removed unnecessary duplication, but any changes must ensure that the ACT government could deliver on "world-class outcomes" being achieved by the National Capital Authority.
The authority's planning process was far more streamlined and efficient than the ACT's and had delivered "demonstrably superior outcomes", such as the New Acton precinct.
"It will be essential that we retain the level of skills and expertise currently on offer within the NCA - and for the ACT government to lift its game," she said.
Master Builders ACT executive director Kirk Coningham said the decision would drive land prices down and allow the ACT government to make planning decisions without duplication and second-guessing from the National Capital Authority.
"The mash of local and national authorities has delivered a tangled ball of red and green tape, driving up housing prices and driving people out of our city," he said.
"Zed Seselja's sensible change will go some way to untangling the mess, injecting opportunity and raising confidence, particularly for private-sector residential developers."
Commonwealth restrictions had "partially strangled" the development of West Tuggeranong, and the power shift would open the ACT for more development, particularly in the south, revitalising centres such as Tuggeranong.
But the Inner South Community Council said the community had never been more suspicious about the ACT planning system, and they were now being told it should be expanded to cover vast swathes of the territory.
The decision raised frightening possibilities, chairman Gary Kent said.
"We have a beautiful and world-renowned national capital precisely because the Commonwealth has overseen its development from the beginning. The suggestion that the short-term political and commercial interests that dominate ACT Government planning in Canberra will be let loose across most of the rest of the ACT is truly frightening."
Pointing to debate over the suburban development at Yarralumla, he said the council was concerned similar development would be repeated in "currently pristine areas" that had been safeguarded by the national planning authorities for more than a century.
This announcement also cast doubt on the long-awaited heritage listing of Canberra - a decision is due in June. "Rumours are rife that the ACT government has opposed the nomination and that it may well now not proceed," he said.