For businesses looking in envy at the grants on offer across the border, a recent Grattan Institute analysis showing the ACT had the lowest rate of coronavirus stimulus spending will come as no surprise.
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But Chief Minister Andrew Barr is right to point out the ACT's high rates of public sector employment play a part in that figure. He says it means elements of the stimulus package like payroll tax waivers and deferrals apply to a smaller proportion of the workforce. Canberra has also been insulated from the unemployment rates seen in other jurisdictions, thanks largely to the fact one in four people in the territory are federal government employees.
In the most recent jobless rates, the ACT recorded a 0.2 per cent fall, from 4.3 per cent to 4.1 per cent. It was the only jurisdiction to buck the trend of sharp rises in unemployment. In that sense it's not surprising the ACT's total stimulus spending so far has been less than those seen in most other states and territories.
However, that's cold comfort for local businesses who have been hit hard by the virus and feel left behind when they see what other governments across the country have on offer.
For example, in Victoria a $500 million fund to support the hardest-hit small and medium businesses was established, offering one-off $10,000 grants. This has recently been extended as the state enters a second lockdown. NSW and Queensland have also offered cash-flow support to small businesses.
Canberra Business Chamber chief executive Graham Catt says this is frustrating many of the group's members. But Mr Barr has previously ruled out a cash grants program for struggling businesses, saying the ACT did not have the mechanisms to deliver them.
There's no doubt Canberra has been more resilient due to its high levels of public sector employment. But as the full economic impact hits, and minds turn to budget repair, there's no guarantee the public sector will avoid cuts. In that context, increased local government spending to help stimulate private sector activities will be even more crucial. The events of the past few weeks in Melbourne are a stark reminder the road to recovery will not be linear.
No state or territory is immune from the risk of further lockdowns, and any response must be agile and adaptable. As we are so often reminded, that risk only evaporates when an effective and safe vaccine is developed and mass-produced. The government is promising more assistance in the months and years ahead. It may be time to increase its spending, and indeed step up its support for small and medium businesses through cash grants.
