In warning the consortia shortlisted to build Canberra's light rail system that they will cancel any contract signed with the Barr Labor government, the Canberra Liberals have taken an extraordinary and in many respects unprecedented step. Their ploy skewers the notion that opposition parties can oppose, but not actually interfere in government decision-making. And it could create a worrying precedent in which oppositions can overturn multi-million dollar infrastructure projects, however well planned or supported by voters, on the basis that they, and they alone, believe them to be unaffordable. More fundamentally, it could undermine the Territory's reputation as a jurisdiction with a strong commitment to large public infrastructure projects as well as make the rail project more expensive.
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The breach-of-contract scenario now being entertained by the Canberra Liberals echoes that engineered last year by then Labor opposition in Victoria. Before the state election it declared it would kill off a $5.4 billion tollway project initiated by the Napthine government. One of the justifications cited by Labor leader Daniel Andrews was that the Coalition government's commitment to the project had come too close to the election. No such justification exists with Canberra light rail, however. Labor's commitment before the 2012 election was reasonably unequivocal, although many people continue to question its explicitness and timing.
The gist of the ACT Liberals' opposition is that the project's $800 million-plus price tag can't be justified when the ACT budget is running at historically high levels, that it "doesn't stack up" economically, and that it faces "very significant community opposition". The Liberals can't claim to know the full extent of community opposition, but their caveats about the economic wisdom of the project remain strong, the more so given Labor's inability to build a compelling supporting case. Their blanket opposition might be easier to support, however, were they to offer an alternative.
That absence of a competing infrastructure vision – one that offers up the potential for job-creation and economic stimulus that light rail does – has left the Liberals vulnerable to criticism from their political opponents and from their own constituency, particularly in business. Even Federal Assistant Infrastructure Minister Jamie Briggs has described the letter as "economic lunacy".
It is the job of opposition parties to gainsay governments, and as Tony Abbott showed, unyielding opposition can reap rich political rewards. However, governments normally honour infrastructure contracts made by their predecessors. To do otherwise is to condemn governments into forever seeking their opponents' agreement before they embark on any kind of major undertaking – hardly conducive to good government. The other consequence is that if governments fear their work will be undone, they will try to ensure reversal or cancellation comes only at great cost or inconvenience. It would hardly surprise, for example, if Labor agrees to a contract with nasty penalty provisions in the event of cancellation.
Victorian taxpayers were hit with a $339 million bill when the East West Link contract was cancelled. If they are right in judging the mood of Canberrans is strongly enough against this light rail plan to win them government, the Liberals will need to hope their electors are really prepared to pay a similar bill for nothing in return.
