As Chief Minister Andrew Barr and his cabinet set about reshaping the city in fundamental ways, their agenda is becoming confused by imperatives that pull in conflicting directions.
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On tax reform, the ACT's shift from stamp duties to rates is widely regarded as necessary and courageous. But the large budget deficit has left the government hamstrung, reluctant to cut stamp duties to any significant extent, and unable to lift rates beyond a theoretical "revenue neutrality". As a result, the government is introducing a novel way to calculate rates for units. It will mean a big increase in rates for units, and an even bigger increase in land tax when units are rented out. Mr Barr describes this as rebalancing the tax burden between owners of houses and apartments. In practice, it boosts the budget.
The light-rail project is mired in similar confusion of motives. To make it stack up in a city as sparsely populated as Canberra, the government is engaged in a frenzy of densification. And while it talks about creating exciting New Acton-style precincts, so far we have seen two vast blocks of Northbourne Avenue-fronting land sold off to private developers with no detailed planning available to give confidence that the vision will be made a reality.
The rush to higher-density living will, in turn, overload the city's sewerage infrastructure, so Icon Water is imposing a levy on new dwellings. This levy will increase the price of apartments. The government's rates and land tax changes will increase the cost of owning apartments. Combined, the measures risk creating an incentive to developers to cut corners to reduce costs, especially in an uncertain market for units, threatening the promised design excellence.
If the government had time to roll out its Northbourne transformation in an orderly fashion with an ear to the market, we could hold more hope for the results. But it has created yet another conflicting imperative in the rush to sell more than $400 million of public buildings before the deadline for federal asset-recycling payments.
This in turn has put enormous pressure on the public housing team to build 1288 new homes in a hurry. As it casts around for sites, it is settling on vacant land wherever it can find it. It plans 30 or so townhouses on each site. And while it insists this is "salt and peppering" public housing throughout the suburbs, housing of that size could risk creating the very concentrations of disadvantage the government purports to be eliminating. Whatever the sensible rationale for widespread public housing, the government risks losing the battle with Weston Creek residents because of failings it created.
Confused motivations are set to complicate yet another front, as attention turns to development along Adelaide Avenue and Yarra Glen to make the second leg of the light-rail line viable and sensible. Here, the government risks coming up against the National Capital Authority, whose disapproval of the first attempt at eight-storey residential along Adelaide Avenue in 2015 forced a drastic downsizing of the plan. Now, the NCA is consulting on rules to preserve the garden city in a precinct of Deakin and Forrest that it controls, a signal that the ACT could hardly fail to miss of the challenges its Adelaide Avenue development front will bring.
