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The Canberra Business Podcast
A podcast about all things Canberra Business.
The Canberra Business Podcast
The Budget Blueprint: Treasurer Chris Steel Unpacks ACT's Financial Future
What does the ACT's fiscal future look like under new Treasurer Chris Steel, MLA? The answer shapes everything from housing affordability to business growth across Canberra.
This illuminating conversation tackles the hard questions Chamber members are asking about development approvals, property rates, and business taxation in the ACT. Mr. Steel addresses concerns about approval processes moving at "snail's pace," revealing that 85% of development approvals currently proceed on time while detailing specific reforms to streamline decision-making across government directorates.
Whether you're a local business owner navigating Canberra's economic landscape or simply interested in understanding how budget decisions shape a community's future, this episode offers valuable insights into the territory's financial priorities and challenges. Follow the Canberra Business Podcast for more conversations that matter to our region's economic vitality.
This episode is supported by CareSuper.
Hello and welcome to the Canberra Business Podcast. I'm Greg Harford, your host from the Canberra Business Chamber, and this week we're talking about the ACT Budget. It was the first budget for new Treasurer, chris Steele, and we had lots of questions from members about what was in the budget. I put some of these live to the Treasurer. Let's see what he had to say. All right well, thank you. We might turn to some of the questions now that are coming in for our audience on the floor. A question about audience on the floor. Question about approvals for development. The suggestion is that they operate at a snail's pace here, with disparate organisations within government that don't talk to each other very well. How are you proposing to fix this, through the budget or otherwise?
Speaker 2:Well, the last figure I saw from the previous month was, I think, 85% of development approvals were going through on time. But there's further work to do and further work to do around building approvals not just development and applications as well. So that is the major focus of the work that we're doing through the productivity agenda and where we've asked business working in the construction sector to bring forward their proposals about what the specific barrier is and then the solution that would actually remove that barrier and address the problem to allow development, and particularly of new housing, to occur. I've been overwhelmed by the response, which has been really thoughtful and some of the issues are very specific around standardising the piling depth for deck columns and those sorts of things, which is an issue that they've come up against with Icon Water, which is one of those referral agencies that developers have to deal with. So bringing some of those referral agencies together in one directorate in government will help so that there's not that back and forth constantly between each one and when there are design changes you have to go back through and consult with the others again. So we're trying to streamline that process and that's not regulatory, it's simply a regulatory barrier. It's simply about developing a new ethos that is supporting development to go through.
Speaker 2:We want to get high-quality outcomes through development. We're very clear about that. It's one of the reasons why we have put in place the Property Developer Licensing Scheme, which will have a delayed implementation over the next year or so. But we also need to support development in the Territory and if there are practical barriers that are stopping that, our government is prepared to work with industry to address them. But there's also another barrier to that happening and that is the Legislative Assembly. We're a minority government and we have already seen, unfortunately, some proposals sort of blocked in the assembly around trying to remove some of the third party appeal exemptions for getting the public and community housing program through, which is disappointing. But we'll continue to work with the industry to try and put that advocacy forward to the other parties so that once we've got a proposal, particularly around some of these development and assessment reforms, it's something that we know as government that industry backs and that hopefully will convince the other parties to get on board as well.
Speaker 1:Alright, thank you. We're going to stick with property for our next question. The question we've got is that residential rates for owner occupiers are the highest in Australia by a factor of two to three times. So I guess, do you have a view on that? Is that correct? Do you benchmark against other jurisdictions and is that fair? And if it is the case, why wouldn't you be moving to New South Wales with that incentive?
Speaker 2:Because people here have the highest median incomes in Australia. We have great jobs. It's a great place to live Best quality of life in Australia. It's a great place to do business and that's why we're seeing business growth here and we want that to continue.
Speaker 2:And one of the reasons why we have the highest quality of life in the world is because we deliver a high level of services, and those services are expensive to deliver and they need to be funded.
Speaker 2:And the most efficient way to fund those is through is through land taxation, particularly through rates, which does account, of course, for the variable component of rates for the unimproved land value, which differs markedly across the territory. But in 25-26 average general rates are going up by 3.75%. Now we have seen in other local governments around the country which don't deliver any public hospital services that their rates have gone up much, much higher than that. They are rebasing at the moment because they are facing some of the same costs for delivering other municipal services and the like that we are facing. And so, yes, we have seen costs go up elsewhere, including across the border, in Queanbeyan, pallering and some of the other surrounding councils as well. But small jurisdictions face a particular issue in this country, tassie, and us in particular, and the Northern Territory, and so we are looking for the Commonwealth to recognise that, particularly in health and hospitals where the cost of service delivery is higher because of the nature of our jurisdiction.
Speaker 1:You talk about the ACT being a great place to do business, and it's certainly true if you look at the numbers of new businesses being formed here, that we have the highest rate in the country, but often those are very small businesses that don't grow, or they grow to a certain size and then they stop. What is the government's growth and innovation agenda for business more generally, and what are you doing to reduce red tape?
Speaker 2:more generally, and what are you doing to reduce red tape? It's been a long-term ambition of the Chief Minister to diversify the economy and we want to continue that diversification, whether it's in our university sector, whether it's in our cybersecurity sector, the whole range of different parts of the business community that are growing, many of which are linked to Canberra being the home of the federal government or have leveraged off that fact, and we want to support that and the export economy in the ACT. The investment, I think, in the budget in the National Convention Centre is important for that. It leverages the fact that we are the nation's capital. People want to come here to undertake their conventions. Those delegates will stay in hotels around the territory, contribute to our hospitality industry.
Speaker 2:It is something that we think is a priority before a stadium because of the week in, week out benefits that that will provide for the ACT. So I think that is quite a significant one in this budget. But we're continuing to invest in the business strategy, which we'll, of course, be working closely with the Chamber on, and a range of other initiatives. Construction, of course, of key sector for us. We want to grow, grow that to deliver more homes and I think that is going to be a continued source of economic growth for the territory. It has been a strength as one of the largest sectors contributing to the economy already, but we think that that will grow over time as well all right, thank you.
Speaker 1:There's a question about payroll tax and rates and taxes on commercial property. We've got the highest payroll tax in Australia and the suggestion here is that rates and taxes on commercial properties are more than double those in New South Wales and Victoria. Are we an anti-business jurisdiction?
Speaker 2:We don't charge rates for, sorry, we don't charge land tax for commercial properties.
Speaker 2:It's in our rates bill, and the rates that we charge reflect the high level of services that Canberrans expect, and we are asking for a contribution from business to that task.
Speaker 2:Look, it's something that we'll continue to work on and monitor. We do want to make sure that the business settings, the business environment, makes the ACT a good place to do business, but we also need to continue to deliver the services that Canberrans expect as well. So we can't be the only the Commonwealth can't be the only government in the country that has the sole ability to raise taxation. In this country, the states need a source of revenue to be able to fund those services. So I think the business voice and the national taxation discussion will be important. Obviously, the Commonwealth charges the business rate of tax, and we also have to charge business to be able to deliver the services that Canberrans expect as well. But it needs to be fair, and so if there are issues on the way through with the implementation of some of the changes, then we're alive to those and we will try to address them. Of some of the changes, then we're alive to those and we will try to address them.
Speaker 1:What is the one biggest, perhaps scary, conversation that you think needs to happen between government and the business sector here in the ACT?
Speaker 2:Thank you, I think it is about the broader sustainability of vertical fiscal imbalance in the country and the ability for particularly the small jurisdictions in this country to be able to raise enough revenue to deliver services. So it's always been a problem, I think. The Commonwealth levies 28 major taxes and we only have a handful in the ACT, so we're going to have to something is going to have to change, I think to continue to address this unless the Commonwealth steps in and provides further funding in terms of the federal financial arrangements. Now they may may do that on health, and that might provide us with a bit more room to move in the coming years.
Speaker 2:Some of the tax measures that we've taken in the budget are temporary, so the health levy in particular. It's going over four years, but it's temporary, and it will nowhere near, though, offset the massive increase of $717 million in addressing growth and demand in the healthcare system. It will raise it just over $200 million. So we have stopped at a point where we think it's unreasonable to go further in taxing both business and the broader community and households, and so, beyond that point, the Commonwealth is going to have to play a greater role, but we're also going to have to be more efficient in the services that we provide, and we absolutely recognise that that is going to have to be the case. Minister Stephen Smith is working on health sustainability reforms. There's funding in the budget for a task force to bring expert advice together to make sure that Canberra Health Services is delivering efficiently, and without that work, the investment and cost of delivering health care would have been higher than even what was presented in the budget yesterday.
Speaker 1:One of the most popular questions that's been coming through relates to one of the biggest election promises that was made when will the Birdman rally be coming back? What is the date that this is going to happen?
Speaker 2:Probably not the highest priority for me, and so it's not a feature of the budget. It was a commitment that was made last year and I'll have to get back to you once I consult with the Chief Minister on that one.
Speaker 1:Alright. Well, on the subject of other forms of transport, how important do you see micro mobility, like e-scooters and e-bikes, being? You've allocated $38 million towards active travel. Is that a focus?
Speaker 2:Yeah, look, I think it's city continues to grow, providing further opportunities for active travel. More sustainable modes of travel is going to be important, just to move more people more efficiently around the city. We embrace micro-mobility with the shared e-scooter scheme. I think there's a tender potentially going out very soon for replacing the second provider of the shared scheme. We're seeing more people adopt electric bikes without the need to provide incentives like other cities have.
Speaker 2:We need to continue the priority investment in the safe cycle infrastructure. We're starting to see some of that built into as a default into the major infrastructure programs road investments. It's currently happening at the moment part of Light Rail, stage 2 and Raising London Circuit, so the safe, protected cycle lanes are being built there that you'll see being completed in the next few months and a few years and I think that will support more people to get around. But also further work is needed in improving the bus system and there's investment in the budget in both more active travel routes, new paths and upgraded paths, but also renewing some of the ageing infrastructure around the territory and David Marshall won't get the opportunity to ask me about the street signs on Northbourne Avenue, probably, but there is money in the budget $600,000. That's continuing from a previous decision to do some of that work around renewing some of the older infrastructure around the territory, which I think will be welcome.
Speaker 1:All right Now, treasurer, I'm told you've got just a couple of minutes left with us, so I gather there's some roadworks that might get in the way of you getting back to the Assembly for question time. So I've just got two more questions that have come through really from the floor here. When you talk about enabling 30,000 new homes by 2030, does that mean built, approved, zoned or dreamed?
Speaker 2:Mine means providing the opportunity for the construction industry to be able to build those homes. So through land release, we're going to release as much land as we can, a lot of it's high-risk land. It involves more capital investment to get the land out to market, which is the SLA is confronting in their program. But we also know that over time, leased land is going to deliver the homes in the Territory as the opportunities and for public land release, dry up land is becoming more scarce in this territory, hence the need for more planning reform to enable more to happen. And for many, many years, medium density homes were effectively prohibited in on 70% of blocks in the territory. We're now changing. It's a big change for the Territory and we are going to have to build more homes in the existing urban footprint, existing zoned residential areas, but keeping green spaces and what we love about Canberra at the same time.
Speaker 2:And we need to also work with industry on a range of other reforms to deliver that target. It is ambitious and ultimately will be. Market capacity constraints, industry on a range of other reforms to to deliver that target. It is am, it is ambitious and um, ultimately will be. You know, market capacity constraints, private investment that will. That will come up against. I did note uh my my counterpart in new south wales's announcement yesterday around um providing some uh investment and uncertainty for housing um for new housing builds. So we're interested in what other jurisdictions are doing to tackle this task and I think we've got a pretty comprehensive programme.
Speaker 1:All right, treasurer. Finally there's one ACT public servant, apparently, for every 15 Canberrans. Yet we've got a high level of complaints, at least anecdotally, about performance. What productivity and capability measures are being taken by government to deliver better for the Territory?
Speaker 2:Well, I think the measure that we've taken around reducing growth, while it's sort of blunt and high level, it will involve, I think, quite a deep conversation between ministers and CFOs and directorates about how we deliver services in the Territory better and more efficiently, and so it will be those issues around productivity, I think, will come up better ways of doing things, not doing things that don't contribute to better service delivery, so stopping doing low value tasks, and so we will.
Speaker 2:We'll be looking at all of those things and if there are any contributions around some of those things, I'm happy to hear it. We're hearing it in the construction sector in that productivity discussion that we've been having, so we'll also be. We'll be looking at this across multiple sectors and if business has some of those ideas, we're happy to hear them. We know ICT systems can lead to some of those improvements, but they're also costly to invest in and are high risk. So there's a range of things that we can do in that task. But yeah, the budget decision yesterday was sort of the first point. Now we've got the hard work to do to actually achieve that efficiency.
Speaker 1:Will you consider outsourcing to other states and territories if they can do things more efficiently?
Speaker 2:We've had really good conversations with Service NSW representatives about how we can use their thinking. They're not competing with us on a lot of this stuff, so if they have a particular you know ICT system or methodology that we can adopt, then we can do that. Sometimes it will need to be customised for the OCT settings. But yeah, we're open. We're absolutely open to that conversation and whether it's adopting the same ICT systems or shared approaches to different challenges, I hope you enjoyed unpacking some of the budget with the Treasurer, chris Steele.
Speaker 1:Just a reminder that this episode of the Canberra Business Podcast has been brought to you by the Canberra Business Chamber with the support of CareSuper, an industry super fund with competitive fees and returns, exceptional service and a focus on real care. You can learn more at caresupercomau and don't forget to follow us on your favorite podcast platform for future episodes of the Canberra Business Podcast. I'm Greg Harford. We'll catch you next time.