Federal minister says ACT Liberals guilty of 'economic lunacy' on light rail

Federal minister says ACT Liberals guilty of 'economic lunacy' on light rail

Federal Assistant Infrastructure Minister Jamie Briggs has warned the ACT opposition not to cancel contracts for Canberra's light rail line after the 2016 election, describing the move as "economic lunacy".

Mr Briggs said the Abbott government's firm position was that contracts lawfully entered into by governments to build infrastructure projects must be honoured.

Assistant Infrastructure Minister Jamie Briggs has weighed in on the light rail debate on the side of the Labor government.

Assistant Infrastructure Minister Jamie Briggs has weighed in on the light rail debate on the side of the Labor government.

Photo: Rob Homer

His comments came a day after Opposition Leader Jeremy Hanson and Liberal transport spokesman Alistair Coe wrote to two international consortiums to explain a Hanson government would stop the $783 million project after the October 2016 election because it was not viable.

Mr Briggs' comments follow Prime Minister Tony Abbott's criticism of the Victorian Labor government's decision to tear up contracts for a controversial tunnel project.


"As we have seen with the East West Link disaster in Victoria, tearing up legally binding infrastructure contracts raises sovereign risk, damages investor confidence and stifles economic growth," Mr Briggs said.

"Australia needs more private sector involvement in infrastructure, not less. In this respect threatening to tear up contracts is bad enough but to follow through with this threat is simple economic lunacy that will damage not just the jurisdiction involved but the broader economy."

Following Mr Briggs' warning, Mr Hanson said: "If the Canberra Liberals are elected next year, we will have a responsibility to stop light rail because that's what Canberrans would have elected us to do."

"The best course of action would be for the Labor government to not sign contracts before the election so that Canberrans can have their say on this massive project.''

Capital Metro Minister Simon Corbell said on Wednesday that the ACT Liberals' letter was "reckless" and said that it signalled the possible loss of hundreds of jobs under a Hanson government.

Asked 10 questions about the letter, Mr Corbell mentioned jobs, employment or work in nine of his answers to reporters and TV cameras.

The new emphasis on jobs was stark, coming after the government and Capital Metro Agency have repeatedly talked up reductions in traffic congestion, public transport development and health.

Last week Unions ACT confirmed it was polling about the tram project, including whether poll participants were more or less likely to vote for light rail if it created 3500 jobs during construction.

Unions ACT secretary Alex White has met with government and opposition members to discuss light rail. The organisation is finalising its position on the tram but Mr White said it was job-creating infrastructure.

Mr Corbell said the government had a clear mandate to build the $783 million tram line. The project is set to receive a $375 million capital contribution from the government once services begin from 2019.

The opposition won't say exactly how much they are prepared to pay to exit contracts for light rail after the election.

"I think the Liberals really should be writing to the hundreds of Canberrans who will lose their jobs if they tear up these contracts for light rail," Mr Corbell said.

"That's clearly what is at risk and they clearly have no regard for the future employment of many of Canberrans.

"All contracts have breach conditions and this contract will be no different," he said. "It will be no more exceptional and no less exceptional than any other contract the government enters into."

Tom McIlroy

Tom McIlroy is a political reporter for the Financial Review in the federal press gallery at Parliament House.

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