Tens of thousands of square metres of office space in buildings adjoining Lovett Tower already lie empty because of public service departments downsizing (or leaving the area altogether) in response to continued government budget cuts. With the departure of those office workers, and tougher economic conditions, retailers in the Westfield Woden shopping complex are feeling the pinch, too.

So uncertain is the economic outlook that question marks now hang over plans to redevelop some of the older buildings in the area and to refurbish the shopping centre.

The predicament, in which many landlords at the Woden town centre now find themselves, is partly a function of the normal ebb and flow of commercial and retail activity where properties become tired or unfashionable and tenants leave for newer and greener buildings elsewhere. This generally opens the way for refurbishment or redevelopment and an influx of new tenants, or so theory would have it. The changes now occurring at Woden, particularly at the shopping centre, are also a function of shifting consumer preferences.

The rise of internet retailing has had a significant impact on the viability of bricks-and-mortar retailers and on the profitability of shopping centre managers and owners such as Westfield. The widely discussed merger of David Jones (an anchor tenant at Westfield Woden) and the Myer chain of stores also heralds continuing uncertainty at the town centre - as does Canberra's immediate economic outlook.

Joe Hockey indicated this week the spending cuts in his first budget may not be as severe as he and Prime Minister Tony Abbott had led voters to believe, in part because of concerns about rising unemployment and weaker-than-expected economic growth. If the Treasurer does pull his fiscal punches in May, however, the territory will probably see little benefit. The public sector spending cuts implemented by Labor and enthusiastically embraced by the Coalition have already resulted in job losses and service delivery cuts across the bureaucracy, particularly in Canberra where most of the federal public service is based. The extent and severity of these cuts is such that they are being compared with those that followed the election of the Howard government in 1996, and which plunged the territory into recession.

With the Coalition having promised faithfully to deliver aid and development packages to areas hard hit by recent factory closures, Canberrans might reasonably expect some Commonwealth help to cushion the impact of public service job losses here. But with the Coalition appearing to wear its disdain for Canberra as a badge of honour, no such offers are likely to be forthcoming.

Strong representations to the executive from our elected representatives would be desirable and worthwhile at this point. And with his links to the Canberra business community, the ACT's Liberal Senator Zed Seselja would undoubtedly be a robust advocate for retailers and landlords doing it tough. However, history suggests he will be met with polite indifference.

The ACT government will be largely on its own in weathering the contractionary effects of Commonwealth belt-tightening, just as it was in 1996. In its favour now, the territory's population and private sectors are bigger, and its housing market is reasonably strong. Interest rates, too, are much lower now than they were then, and this should add impetus to any counter-cyclical spending policies the Gallagher government might implement in response to Mr Hockey's forthcoming budget. But should the national economy weaken further, the task of propping up Canberra's economy to maintain jobs will become much harder.

Whatever further economic squalls are headed Canberra's way, we will have to rely on our own strengths, skills and capacity to weather them. The city has these in abundance, but the next few months, even years, could test its resilience.