Katy Gallagher is bracing for Canberra to receive a "big hit" in Tuesday's federal budget but is predicting the impact will not be as bad as the federal cuts in 1996.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
She has not given up on a federal rescue package for Canberra to soften the blow of expected job cuts to the federal public service.
"I have sought information around what the budget means for Canberra but I've been told to read the budget on the night, which we will do, but I think in some ways we are preparing for a pretty big hit," she says.
The Chief Minister says the ACT's economy has changed in character and become more resilient since then-prime minister John Howard slashed tens of thousands of public service jobs.
And she points out the city has been witnessing job cuts already, begun by the former Labor government.
"Part of the challenge for us is managing some of the questions of confidence across the economy in an environment where we have been holding up relatively well in a period, which would exceed a year now of pretty significant reductions in Commonwealth expenditure," she says. "When you look at our housing starts, our population growth, our unemployment levels, they have been pretty resilient.
"We are seeing a small reduction in home values in the last statistics of about 1 per cent but this is off an enormous period of growth.
"So I think it is quite different to what happened in 1996 and I would hate us to get sucked into this belief that it is going to be like 1996.
"The economy is different, the population of the city is different, the diversity of outputs of the city is quite different to 1996 so we are in a stronger position.
"I think a lot of our small businesses are not seeing just the Commonwealth as their client. We are seeing really big change in the export market of Canberra where we have businesses like Aspen Medical who won Australian exporter of the year.
"Small businesses do some work with the Commonwealth but their horizons are much broader than that and we see that in the ICT industry as well, it's a global business they are engaging in and that has changed a lot since 1996 - those opportunities just didn’t exist.
"So there are a lot of good things for us to feel quite comforted about and that position us really well for our future but a short, sharp shock will impact here.
"If that's what the Commonwealth ultimately decides, then they must engage with us, on either how they support us through this adjustment or negotiate around how that is to be implemented."
At last week's COAG meeting Gallagher reminded the Prime Minister his government was the "big player" in Canberra.
"I said if you make decisions that look relatively benign across the country, don't believe that this will not have a disproportionate effect here in our city because the reality is it will," she says.
The Chief Minister says she hasn't given up on a federal government Holden-type rescue package for the ACT to soften the impact of the public service job cuts.
Chris Faulks, Canberra Business Council chief executive, also says the Canberra economy has changed since 1996 and is more able to cope with cuts to the public service.
"We have a much stronger and more vibrant private private sector then we did in 1996," she says.
"‘Having said that, there is no doubt it is going to be challenging period and we would hope that whatever comes out of the budget on Tuesday does not have particular things that are aimed at Canberra," she says.
"‘It is always the case that when federal governments attempt to use contraction of the public sector as one mechanism to make savings, that the ACT and region is impacted negatively and disproportionately to the rest of Australia simply because 40 per cent of the APS employment is in Canberra and, at the higher levels, 67 per cent of the EL1 and EL2 employment is in Canberra and 76 per cent of the SES.
‘‘We think that unlike some previous governments, it is not the intention of the federal government to have a strong negative impact on Canberra.
"We would say the long-term fundamental issue for the federal government in relation to Canberra has been a failure to understand the critical synergistic relationship between the private sector and the public sector here."