The federal government could be forced to set up its own firefighting service in Canberra to protect the city's national institutions if a multi-million dollar funding row with the ACT government cannot be resolved.
The territory is accusing the Commonwealth of unilaterally ''tearing up'' the $10 million agreement that ensures Parliament House, the High Court, the Australian War Memorial, the National Gallery and other national institutions are protected by emergency services.
ACT Emergency Services Minister Simon Corbell said the federal government would not pay its fair share for emergency services for its Canberra buildings after the Department of Finance and Deregulation refused to pay the last annual $10 million bill, offering $4 million instead.
Mr Corbell said the territory was forced to maintain a specialist biological, radiological and nuclear response capability to deal with more ''white powder'' incidents each year than any other jurisdiction, with most of the attacks directed at federal installations.
White power incidents are where suspicious and sometimes harmful substances, such as anthrax spores, are sent to targets. They are usually hoaxes.
But Finance and Deregulation says the Commonwealth already pays Fire and Emergency Services levies on buildings it occupies around the city and that it had been paying too much for fire cover for many years.
The department also denies Mr Corbell's assertion the Commonwealth was refusing to negotiate.
The latest Fire Services Payment agreement, in place since self-government in 1989, expired in June last year and Mr Corbell told The Canberra Times said Finance and Deregulation had failed to pay the $10 million bonus and ''decided'' the deal should cost $4 million instead.
''They think that ACT taxpayers should be picking up the tab for providing fire services,'' Mr Corbell said. ''The Commonwealth has indicated to us that they are unilaterally changing the terms of that agreement, not honouring the previous agreement, before a new agreement has been reached.''
The minister said the presence of the Commonwealth in the city had resulted in Australia's highest rate of ''white powder'' incidents, more than 200 a year.
''We have the highest rate of white powder incidents in the country, measured against head of population we have 67 white powder reports over 100,000 head of population, the next highest is Western Australian with 6.5,'' Mr Corbell said.
''So for a city of our size, we have to maintain a chemical, biological, radiological and nuclear response capability which equivalent cities of our size don't have to maintain.''
The minister said his federal counterparts had refused to hold talks with him about the problem.
''Regrettably, we have been snubbed at every avenue, I have written to my counterparts federally, I have raised the issue with the Treasurer, the Prime Minster and all of those overtures have been rejected,'' he said.
''They're basically saying that they are not willing to negotiate, that they will pay what they have decided to pay.''
Mr Corbell said the territory could be forced to withdraw from the arrangement, a move that would require legislation, forcing the Commonwealth to provide a second fire-fighting force for the city, with five stations, at an estimated annual cost of $18 million after $12 million set-up expenses.
''That's clearly something that we don't want to see eventuate,'' the ACT minister said.
''I think that the Commonwealth needs to have a think about this, otherwise we might have to tell them: 'You need to set up their own fire response capability and we will be putting you on notice that you need to do that'. ''
''But there's no suggestion that we would withdraw fire services unilaterally, that's not appropriate or responsible.''
A Finance and Deregulation spokesman said the department was applying the same principles it used to pay for emergency services across the nation.
''The Commonwealth recognises its responsibilities as a property owner in the ACT and is committed to paying a fair and equitable amount for the provision of fire protection services to Commonwealth-owned buildings,'' he said.
''Over the past 10 years the composition of the ACT property market has changed significantly with the proportion of Commonwealth-owned buildings reducing relative to the growth in both privately owned commercial buildings and the residential sector in the ACT.
''As a result under the previous arrangements, which lapsed on 30 June 2011, the ACT has for some time been receiving a disproportionately high payment. The revised payment structure is consistent with this commitment.''
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