The federal government's borderline hung parliament spells good news for economic growth in the ACT, boosted by low interest rates, according to a new national economic outlook report.
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The Deloitte Access Economics report said Prime Minister Malcolm Turnbull's Coalition government formed majority in the lower house by one seat at the last election and the gridlock allowed the federal public sector to continue expanding, with federal public servant numbers growing by 2.5 per cent last financial year.
"Yet although headcount has accelerated again, there's been considerable wage restraint, meaning that federal largesse has been better, but not spectacular," the report said.
Deloitte Access Economics partner Chris Richardson said overall the ACT was "looking genuinely good", with the growing public servant sector and lower interest rates the two biggest drivers of Canberra's economy.
Mr Richardson said a larger majority government could see the amount of public servants in the ACT reduced, but the report said the gridlock wasn't permanent, although it wasn't expected to end soon.
"What bad thing could happen? The answer is something that would be good for the nation [spending cuts], would be bad for the ACT," Mr Richardson said, but added it wouldn't spell disaster for the capital's economy.
Mr Richardson described the ACT as "one big, fat mortgage belt", which meant the lower interest rates were helpful for homeowners, giving Canberrans more money to spend with local businesses performing strongly.
"It sent retail in the territory into overdrive, and it topped up what was already an upward lurch in housing construction off the back of asbestos-driven construction work," the report said.
"If Canberra's small businesses were any more confident, they'd be giving [US President] Donald Trump lessons on self-promotion."
Interest rates globally would continue to rise, especially in the US, but other countries like Australia would slowly follow suit with the report expecting interest rates to begin rising in 2018, with much of the world following suit through 2019.
Mr Richardson said despite concerns about Mr Trump's impact on global markets, Australia's economy was safe, with national income leaping ahead and global growth improving.
While other state's outlooks were troubled by a decrease in manufacturing, rising house prices or reduced commodity prices, the report said the ACT was one of the nation's better performing economies. Mr Richardson said Canberrans would be less impacted by any unforeseen financial disaster in the future.
He said Canberra had shorter economic cycles – the period between economic contraction and growth – than others states, and this allowed a faster recovery.
Canberrans' average weekly earnings were forecast to rise, while the unemployment rate was shrinking, with trend rates falling under 4 per cent.
The light rail project, commercial construction at the Canberra Casino, various office developments and expansions at the ANU and the ACT law courts added a boost to construction but Mr Richardson said these didn't mean huge growth to the capital's economy.
"I suspect that a lot of people will be happily surprised by the time 2017 is finished," Mr Richardson said.
