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Federal budget hits Canberra, public service hard

Misery loves company – that's Canberra's main problem in the wake of Tony Abbott's first budget.

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Budget 2014: what you need to know

Joe Hockey's Budget gave us much of what we already knew and some surprises too, reports Callum Denness.

A key to surviving Abbott's big bash will be the community mindset.

If our collective reaction is to rein in spending, an understandable reaction in the face of job insecurity, the territory's economy will slow even further.

However, the reality is Canberra is being slammed disproportionately hard, in the name of the national interest.

The budget's litany of broken promises will position Canberra as collateral damage – but will it break the heart of the national capital?


Thousands of public servants will lose their jobs as Abbott breaks his promise not to cut more than 12,000 positions.

But his task has been made easier because the Labor Party has put in train the abolition of 14,500 jobs.

Abbott is adding 2000 to that total, but more job cuts are likely.

Treasurer Joe Hockey told the budget lock-up press conference more pain would follow in successive budgets.

As the public sector takes a hit, Canberra's small businesses need a hand up.

Given that the rest of Australia doesn't care, and no Holden-style rescue package will emerge, this is where next month's ACT Budget will play a key role.

It is expected to unveil infrastructure projects to create jobs, and may award contracts to kick start preliminary work on the ambitious Gungahlin to Civic light rail.

Although this is an expensive project for a small jurisdiction, it has the potential to create hundreds of jobs.

Canberra went through Armageddon in the late 1990s under John Howard's blowtorch but this time around, as expected, the cuts are not so severe and the territory's economy is larger and more robust and diverse.

However, with the public service making up 40 per cent of the population, Canberra must brace.

Property values are expected to slide and retail trade could slow as the flow-on effect of the job cuts seeps throughout the town.

Tuggeranong would have been gutted if the Department of Social Services moved out – but it's staying.

The "fat cat" tax will reach into the pockets of the SES, while the petrol tax, the GP fee and changes to family assistance will affect household budgets from Gungahlin to Tuggeranong.

The efficiency dividend will rise, as announced in the mid-year budget review, saving an extra half a billion dollars over four years.

The Australian Tax Office will bring forward staff reductions that were already planned in response to efficiency dividends and decisions of the former government.

"A smaller, less interfering government won't need as many public servants," Hockey told Parliament.

It's not all bad news for Canberra – ANU will be in a prime position to charge premium fees and CIT students will be supported by federal funds.

However it will be hard to appreciate the national boost to infrastructure and the establishment of the largest medical research fund of its kind in the world if you work in the back office of a national cultural institution where the job axe will fall.

All this means Joe Hockey was at the height of disingenuousness when he told Parliament, "It is time, for all of us, to contribute and build ... We are a nation of lifters, not leaners."

The reality is it's time for some of us to contribute much more than others.

It's no surprise that in these tight budgetary times, no money is available for the first leg of the very fast train, between Canberra and Sydney.

But the so-called infrastructure Prime Minister just looks stingy when he can't kick in $8 million over three years in seed money for the proposed Australia Forum convention centre – particularly after he asked for just such a private sector project to be pitched by the ACT.

However, just as Howard slashed the public service but later built the National Museum and the National Portrait Gallery and massively upgraded ASIO and the AFP, Abbott will have his chance to "contribute and build" to the Canberra skyline when the budget bottom line becomes healthier.

Outside of Canberra, the budget will seem relatively mild when compared to the doom and gloom predictions created by the government to massage expectations.