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Malcolm Turnbull's dream city is his new home town, Canberra

Malcolm Turnbull is a big fan of renewable energy, public transport and land tax. However his ACT Liberal colleagues are campaigning against them.

Richard Denniss

It's fascinating to think how Canberra's most powerful resident might vote in the upcoming ACT election. Since announcing that the newly renovated Lodge would be his home, Malcolm Turnbull seems to have done more to build the case for the ACT government's policy agenda than anyone else. While the "innovation Prime Minister" is a big fan of renewable energy, public transport and land tax, the ACT Opposition Leader, Jeremy Hanson, is opposed to all three.

Let's start with light rail. While the ACT Liberals want to "save our city" from the scourge of public transport, the Liberal Prime Minister has gone out of his way to be photographed using the trams in Melbourne and the Gold Coast. Turnbull has not just been keen to highlight the fact that light rail is a lot cheaper way to get around than helicopters (and comcars), he has also made the need to invest in the construction of efficient cities a central plank in his economic agenda.

Illustration: Pat Campbell
Illustration: Pat Campbell 

In announcing the creation of a minister for cities, Turnbull declared that "liveable, vibrant cities are absolutely critical to our prosperity ... we often overlook the fact that liveable cities, efficient, productive cities, the environment of cities, are economic assets".

"You know, making sure that Australia is a wonderful place to live in, that our cities and indeed our regional centres are wonderful places to live, is an absolutely key priority of every level of government," he said.

Indeed, so keen is the Turnbull government to encourage state governments to invest in projects such as Canberra's light rail that they are willing to subsidise it. The Commonwealth's so-called "asset-recycling initiative" will provide $60 million to support the ACT light rail project, just as it gave support to the Queensland government for the extension to the highly successful Gold Coast light-rail project.

In announcing the Commonwealth subsidy for Canberra's light rail, former treasurer Joe Hockey "welcomed the fact that the first agreement to be formalised under the asset-recycling initiative is with the ACT Labor government and strongly encouraged other states around the country to participate and benefit from the incentive pool available". Hockey also highlighted the fact that Commonwealth support for infrastructure was "designed to encourage states to get going with asset recycling at a time when the historic mining investment boom is receding" and that the Coalition government saw infrastructure projects like light rail as "an important part of the Abbott government's historic $50-billion infrastructure growth package".

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It is inconceivable to think that the federal Liberal Party would be so contemptuous of public money that it would offer to subsidise a project that was a wrecking ball for the local economy. But while the Prime Minister and former treasurer see money spent on public transport infrastructure as an investment to be encouraged, the ACT opposition sees it as an expense to be minimised. Someone must be wrong.

Canberra's population is set to double by 2055. And as anyone who has been to Sydney or Los Angeles knows, spending on roads is unrelated to the goal of reducing congestion. While the $700-million sticker price of the light-rail project is highly visible, opponents of the project are relying on the fact that the cost of new roads, traffic congestion and the greenhouse gas emissions associated with alternatives are far less visible.

Speaking of greenhouse-gas emissions, the ACT government's investment in light rail will significantly boost the Prime Minister's new home town's ability to achieve one of his other stated goals if helping to tackle climate change. Not only will the light-rail project result in a significant reduction in traffic congestion during peak hour, it will also reduce greenhouse gas emissions from Canberra's transport by 2900 to 4700 tonnes a year, according to Professor Will Steffen.

When combined with the ACT government's commitment to secure 100 per cent of the territory's electricity from renewable sources by 2025, the plan to shift a significant amount of Canberra's transport mix from petrol-fuelled cars to renewable energy-fuelled light rail must really excite Turnbull: investment in our cities, reductions in greenhouse-gas emissions and innovative renewable energy policy all at once. If he is pumped about having Barnaby Joyce as Deputy Prime Minister, he must be over the moon about light rail.

The Prime Minister's new home town is also one of the few bright spots on the otherwise bleak landscape of tax reform. Just this week, he said state governments should stop treating the Commonwealth government like an ATM and do some tax reform of their own. He was quite clear about what that might look like, saying: "Some of the most efficient tax bases in Australia are state tax bases like land tax."

While successive federal governments have struggled to sell, and implement, switches in the tax mix, the ACT Labor government recently managed to switch from the stamp duties that economists are always complaining about to the kind of land tax that most economists, and the Prime Minister, clearly prefer. How disappointing it must therefore be for Turnbull to hear the leader of the ACT Liberals rage against "taxing the family home". How short term of the ACT Liberals, he must think to himself.

Much has been written about the inability of recent federal governments to implement major reforms, with typical explanations focusing on the rise of social media and the demise in the quality of politicians. But while such factors may no doubt play a role, it is important to recognise that countries such as New Zealand have managed to maintain stable governments that have introduced major changes and, of course, so have we here in little old Canberra. Twitter hasn't made reform impossible everywhere outside Australia's Parliament House.

A competing explanation for why federal governments have found things so hard is that social media has made the role of opposition a lot easier and, in turn, oppositions have become far more effective at whipping up scare campaigns on everything from work choices and the carbon price to "triple your rates" and light rail.

Building the case for major reform requires determination, consistency and allies. If Turnbull is serious about building the case for investing in cities, tackling climate change and tax reform he should be standing shoulder to shoulder with the ALP Chief Minister of his hometown, Andrew Barr, and urging others to hop on board.

But like all politicians, Turnbull doesn't just need external allies to implement his reform agenda, he also needs internal allies to secure his political agenda. Will he speak out in support of the ACT government on light rail? Will he slap down the ACT Liberals' populist campaign against the land tax he thinks is so efficient? Or will he stay silent? Social media has a lot of crimes to answer for, but the hypocrisy of politicians isn't one of them. 
 
It's not clear why the Electoral Act allows a prime minister to live in one seat and vote in another, but it is clear that based on his public statements, Turnbull would likely have to vote for Labor in the ACT. Unless of course he cares more about political wins than policy reform.

Richard Denniss is the chief economist for the Australia Institute. Twitter: @RDNS_TAI