One possible site for a high-speed rail station - below Ainslie Avenue near the Canberra Centre. Photo: Melissa Adams
Will Canberra meet the challenge of its second century?
It certainly can if we identify what those challenges are and formulate and implement the appropriate solutions.
The political rhetoric of both sides of federal politics in recent years clearly confirms that they both believe smaller public sectors are both fiscally and politically desirable. The incoming Coalition is no exception and may reduce the public sector in Canberra by up 7000. It is almost a cliché´ that government needs to formulate policies that will broaden our economic base, but it has never been truer than now. There are opportunities and strategies but government cannot deliver them without a closer relationship with the private sector, greater than ever before.
The proposed city to lake project.
I intend to focus on our central business district as driver of our economy.
Australia's major cities provide nearly 80 per cent of our nation's gross domestic product. Although some of this is generated in commercial hubs surrounding key infrastructure such as airports and distribution centres, the real engine room of a city's economy is its CBD. I believe that it can be the same here. So too does the ACT government. It has embarked on a campaign to attract investors from Asia through its ''Invest ACT'' initiative, many targeted to invest in the CBD.
It has also progressed policy and planning work on the City to the Lake project, The Australia Forum, a new stadium in the city, a new theatre complex and new ACT government offices.
Canberra's CBD is well placed to take advantage of the new century's economic opportunities. It sits adjacent to the world-class Australian National University, voted just this week as Australia's top University. It is very close to all the nation's major cultural institutions, Federal Parliament and Canberra International Airport.
It is also just a short stroll to beautiful landscapes such as Reid, Commonwealth Park and, Lake Burley Griffin.
We tend to take these for granted but visitors from highly urbanised society's rate open spaces very highly.
The hallmark of successful cities is the degree of integration with the global economy they have achieved. Although each of the infrastructure projects we aspire to for the CBD are integral to our efforts to diversify our economy, the quantum leap we need to take is to connect Canberra to the global economy.
The connection cannot just be technological - internet and the like - but physical, such as a gateway for exports, accessibility for tourism, research and development in knowledge-based industries, cultural and artistic interaction, environment and livability.
This week Chief Minister Katy Gallagher wrote to prime minister-elect Tony Abbott to seek a meeting with him to discuss the impact on Canberra's economy of the federal government's policy agenda. Her decision to engage him so quickly is commendable. I suggest the High Speed Rail Advisory Group recommendations to the outgoing government be put high on the agenda. The project, in tandem with the international airport, will be the biggest contributors to lifting Canberra to the rank of a global city.
I am hopeful the Coalition government will instruct the High Speed Rail Advisory Group to continue its work. I agree with the Canberra Business Council's assessment of the positive impact on Canberra and the Capital Region of high-speed rail. I respectfully disagree with their view that the station should be located at Canberra International Airport.
The implementation report of the High Speed Rail Advisory Group released last month reaffirmed the compelling case made in the phase II report to locate the station in the CBD. It highlighted the evidence that the majority of journeys made both ways would be for reasons other than to connect to an air service. Airport managing director Stephen Byron has conceded as much. So too has the territory government.
I can't emphasise enough the huge contribution Canberra International Airport makes to the region's economy. Over the years I have often been irritated by the negativity, misinformation and sheer vitriol directed at the owners of the airport.
The Canberra community was fortunate when the Snow family decided to buy the airport from the Commonwealth.
This is a family with deep roots in the Canberra community that was prepared to take a substantial financial risk and has continued to invest heavily to transform the airport into the world-class facility it now is. Since buying the airport in 1998 the owners have spent more than $600 million in developing the precinct. The Commonwealth spent less than $6 million in the last five years of its ownership.
It is inconceivable that we would have this important piece of infrastructure as it is now had it passed into other hands. We know that the commitment continues and I'd be delighted to see a partnership forged with the ACT government to finance a light-rail link to the CBD partly funded by the money originally earmarked for the high-speed rail station at the airport.
Clearly I would have preferred that much of the non-aviation activity that has been located at the airport had been located in the CBD, but at least it has underpinned the funding of the expanded aviation facility. I will vigorously champion the CBD but at the same time I respect the airport's perfectly legal right to enter the market to compete for tenants.
I'm hopeful that we don't see a repeat of the circumstances that led to Costco choosing to locate at the airport instead of adjacent to the Epicentre in Fyshwick, which would have supported the Crown lessees that have invested there. For the same reasons I'm puzzled by the decision to contemplate a Majura Road location as a site for Ikea.
Nor is my CBD-centric passion confined to arresting leakage to Brindabella Park or Brand Depot but also to Barton.
An important element of the appeal of the CBD as a superior location to do business is the superior amenity it provides the workforce and its accessibility for customers. Nowhere else in Canberra offers the amount of comparative shopping, the restaurants, the cinemas, theatres, museums and galleries that are on offer.
Yet this vibrancy, which has greatly grown in recent years, belies the trading performance of the CBD, which is inferior to that of our town centre malls. This contrasts sharply with the situation in the state capitals, where the trading in their CBDs is stronger than in their regional malls the equivalent of our town centre malls.
This is confirmed by the respective rental levels. Here the average rent in the malls is far higher than the average rent in the CBD. The reverse is the case in the state capitals, where average CBD rents are far higher than the average in regional malls. This can also be seen by a comparison of the respective vacancy levels. Here the retail vacancy in some parts of the CBD is 15 per cent, whereas in the Sydney CBD it is about 3 per cent.
There is no doubt that the Canberra Centre has revitalised the north quarter of the CBD and has attracted some big national and international traders to the city. New Acton, Childers Street and the emerging Braddon Village are also contributors to the new vital CBD.
I must put in a short plug for the work done by CBD Ltd. It has been highly successful in its program of improvements to the CBD, decorating it with flowers, staging crowd pleasers such as Skate in the City and sponsoring an array of popular events. All the activities are funded by the property owners of the CBD.
Regrettably the mid-city precinct which takes in Garema Place, City Walk and the Sydney and Melbourne buildings is struggling to compete with other parts of the city. Many businesses have relocated from this precinct to other parts of the CBD. As a result the precinct has been characterised by rising vacancy rates and falling rents for several years. The result has been an incremental drop in property values such that many have dropped over 20 per cent in the past five years. It should be sobering that this is occurring in an economic environment where the unemployment rate is the lowest in Australia and average wages are the highest in the country.
Unfortunately it is nearly impossible to hide vacancies and they are not a good look when you are trying to attract Asian investors.
I am concerned that the government is loosing sight of the obligations I believe ACT's Leasehold Land Tenure system imposes upon it. Sometimes it seems that once a Crown lease is sold government is content simply to play a municipal role, collect the rates, pick up the rubbish and dispatch the fire brigade if a building catches fire.
I believe the government should be very concerned that property values have fallen as much as they have in parts of the CBD not just because the rating base is eroded but because the value of the territories' unleased land is also falling.
Imagine for a moment that in a single suburb somewhere in Canberra all the homes dropped 20 per cent in value over five years but the value of all the houses in the surrounding suburbs increased in value. I'm sure both the residents and the government would be extremely concerned.
Government has a continuing interest in a Crown lease right through to its expiration. Upon the expiration of a Crown lease the government may have to accept surrender and pay the lessee the value of the improvements. Thus the Crown lessee and the Crown lessor have a special relationship not found under a freehold land tenure system.
Dr Allan Hawke's excellent report, Governing the City State, provided some of the answers on how government could be more engaged with Crown lessees. He spoke at length on ''agile'' government, ''citizen-centred governance and public value''; and although he was drawing on best practice from around the world to improve engagement and service delivery for the community as a whole, I found it valuable in providing a framework for resolving the issues confronting the business community in the CBD. He provided a blueprint for matters such as cleaning, management of clutter and public safety.
Of greater interest from a commercial point of view was his proposal to establish an executive committee of cabinet along the lines of one established in South Australia. He suggested that such a body could be a guide to development of planning and development policy.
The report also recommended replacing the Land Development Agency with an advisory board. The government chose not to adopt that recommendation.
Commenting on the election of the Coalition, Treasurer Andrew Barr said the ACT government would review its land release programs and taxes after assessing the impact on Canberra of the new federal governments' policy settings.
As I said earlier I believe the CBD will be the engine room of Canberra's economy in the next century. As such it should be accorded the status of a special economic zone and administered by a statutory authority whose terms of reference make it responsible for master planning, development, capital works, maintenance, provision of parking and land release. The autonomy of the authority would allow it to be proactive rather than reactive in the marketplace. This agility will lead to better outcomes delivered more quickly.
LDA functions in so far as they relate to the CBD should be transferred to the statutory authority. Other organisations - such as the Commercial Advisory Committee - in so far as their activities relate to the CBD should also be folded into the statutory authority. It is important that the relevant intellectual resources of these should move across as well.
Canberra's town centre malls have effectively operated as de facto statutory authorities for years, periodically planning extensions, providing their own environmental impact statements and submitting development applications that are invariably approved or ''called in'' with a minimum of fuss.
Had such an authority been in place over the past 20 years it might have sutured the loss of office stock from the CBD. Between 1990 and 2000 only one new office building, Garema Court, was constructed in the city. In the meantime at Barton the federal government reaped millions of dollars in land sales; and from the early 2000s Brindabella Park constructed many thousands of square metres of new office space.
There is also the imminent possibility of another major Commonwealth department leaving the city and locating in Barton or Brindabella Park.
The government expects the new lease variation charge (LCV) in respect of certain prescribed residential leases to provide an amount of revenue broadly as anticipated in the macro-economics report by Professor Des Nicholls. In a way it is reminiscent of the window tax introduced in England during the 17th century because it is easy to calculate the LVC based as it is simply on numbers and doesn't require any complex calculation relating to values.
Intuitively I suspect the revenue targets will not be achieved because developers will not be able to acquire properties at a price below their intrinsic value as land with a detached house. However, the new legislation should be given a chance to prove itself.
The macro-economics report recommendations in respect of lease variations of commercial Crown leases are based on flawed logic. Clearly, if the value of improvements and remedial (but not new) off-site works cannot be offset against the LVC, many applications to vary will not be commercially viable. The ''commence and complete'' provisions are not conducive to achieving premium prices for land sold in the city and should be scrapped. They will have a role after some amendment, in preventing land-banking in residential greenfield sites.
Canberra's economy will benefit from population growth in the Capital Region. Predicting what the population will be in 2113 is tenuous.
Assuming a growth rate of between 0.07 per cent and 1 per cent, the Capital Region will be home to between 1.4 and 1.9 million people within 100 years. Fortress ACT is neither possible nor desirable; the memorandum of understanding between the ACT and NSW acknowledges this and has protocols in place to manage this growth. If the high-speed rail link is built, the Sydney-Canberra corridor will provide the relief valve that takes pressure off the Sydney basin already struggling because of capacity constraints. Rather than the resultant development placing environmental burdens on our region it provides employment opportunities close to affordable housing by co-locating the two along the corridor.
As I said, Canberra International Airport is enormously important to the economy of the region. Passenger numbers are estimated to rise to 7.2 million annually within 20 years.
I am yet to be convinced that it cannot play a role equally as good if not better than the role that Sydney's second international airport, if established somewhere west of Sydney, will play. I express it this way because I view Canberra International Airport as Canberra's first international airport rather than Sydney's second. It is ideally placed to connect this region to the world and place Canberra among the world's global cities.
What is not in doubt is that, in its capacity as a freight hub, its curfew-free status must remain.
I feel privileged to live in Canberra. It has great natural beauty, is environmentally sound, and offers an exciting lifestyle with great connections to the rest of Australia.
I stress that the views here are entirely my own and do not represent the policy or opinion of any organisation I am associated with.
I hope they stimulate discussion on the issues and encourage new ideas and alternative solutions. Writing in Dissent in 1987, American philosopher and humanist Marshall Berman, now at The City College of New York, stated: ''Civic culture was born, in ancient Athens and Jerusalem, when intellectuals took their stand in public spaces and took it on themselves to act as the consciousness of their cities.'' I invite Canberrans, intellectuals or not, to do the same.
Greek philosopher Aristotle said ''the common purpose of the city is human flourishing''. By 2113 I believe Canberra will have well and truly achieved that purpose.
Manny Notaras is chairman of Canberra CBD Ltd. These are his personal views.