ACT Chief Minister Andrew Barr said delivering the government's $4 billion infrastructure program would be his biggest challenge in the next four years, as he expressed fears construction industry capacity could be overwhelmed amid massive recession-busting spending blitzes in NSW and Victoria.
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But Mr Barr said there were no excuses for his re-elected government not to deliver its package of long-promised major projects, headlined by the delay-plagued Canberra Hospital upgrade, light rail expansion and Woden CIT.
"The greatest challenge, under which I expect us to be marked, is the delivery of these projects," he said.
In the second part of an interview with the The Canberra Times to mark the start of what's looming as his final term in the Legislative Assembly, Mr Barr also described his concerns about the ongoing impacts of the COVID-19 pandemic on young people and said Canberrans shouldn't be worried about the ACT's growing debt burden.
"I think one of the most powerful things this economic crisis has done is finally slayed the dragon that public debt is terrible," he said.
The chief minister laid down the foundations for the next four years ahead of the ACT election, unveiling a plan in August which leaned heavily on infrastructure spending to lift Canberra out of the coronavirus-induced downturn.
The $4 billion infrastructure program included projects which had been on the ACT government's agenda for years, a factor Mr Barr said meant construction work could start relatively soon.
But Mr Barr conceded he had a "degree of concern" about the capacity to deliver all of the projects.
His concern stemmed from doubts about the construction industry's capacity to complete the work, particularly as other Australian states and territories embarked on their own infrastructure spending blitzes at the insistence of Reserve Bank governor Philip Lowe.
Mr Barr said one of his first meetings in the new term would be with Infrastructure Partnerships Australia, a peak body for major infrastructure companies.
Concerns about construction industry capacity had also been discussed at meetings of Australian treasurers, he said.
"I am keeping a really close eye on how hot the market is going to be, particularly in Victoria and NSW," Mr Barr said.
"That is my greatest fear, that we are simply overrun by the sheer scale and volume of the projects that NSW and Victoria come up with."
Ratings agency Standard & Poor's raised similar concerns in September, predicting the ACT government would fail to deliver about 20 per cent of its planned multi-billion infrastructure program.
Mr Barr said one solution could be to tender out projects in smaller portions, which would help to sustain, but not overwhelm, local contractors.
He said the Canberra Hospital upgrade, city to Woden light rail expansion and construction of new schools to accommodate enrolment demand remained the priority projects.
The ACT has held up better than the other states and territories through the crisis, with Canberra's large public sector employment base helping to fortify the local economy.
But the pandemic has punched through a number of sectors, including tourism, higher education and hospitality.
Mr Barr said one of his biggest concerns was the ongoing consequences for Canberra's young people.
"A lot of the jobs that the students were doing are not there, or not there in the same quantum," he said.
The combination of a hit to government revenue and spending required to support the health system, businesses and households amid the pandemic has smashed the ACT's budget bottom line, with a deficit topping $900 million forecast this financial year.
Public debt was projected to swell from $4.9 billion in 2020-21 to $7.9 billion in 2023-24, according to treasury forecasts published ahead of the ACT election.
Mr Barr said taxpayers shouldn't be worried about the ACT government taking on large sums of debt in order to support the economic recovery, particularly given the historic low interest rates.
He said his record on fiscal management should be judged on indicators such as economic growth and unemployment, not the traditional measures of debt and deficit.
He noted the federal government was forecast to run a deficit of more than $200 billion this year, with debt expected to peak at $1.14 trillion in 2024.
"Not too many people are wringing their hands now in 2020 over the debt that was racked up by the Commonwealth after the Second World War," he said.
"I don't think that keeps people awake at night."
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
