Tag: Andrew

Winner: Home owners

Hang on: don’t rising interest rates make home owners with mortgages losers?

Maybe, but the ACT government doesn’t have much to say about interest rates.

It does set household rates bills, though. And, while these will still increase, this year’s rate rises for Canberrans who own homes will be much gentler than in recent years.

The average bill is set to increase by 2.5 per cent — or $111 per year — in 2022-23.

That’s well below inflation and comes after a decade in which rates typically rose by 6 to 7 per cent a year.

Loser: Unit owners

Canberrans who own units and townhouses face much steeper rate rises than owners of houses.

The average bill for these properties will increase by 9.9 per cent — or $67 per year — in 2022-23.

These owners had been spared some of the very large hikes that house owners had borne in previous years.

But as the value of units and townhouses rises, their owners’ taxes will increase, too.

Winner:Economy

If you looked at Canberra’s economic indicators and nothing else, you might well conclude: “The pandemic must be over.”

The ACT economy is hurtling along, fueled by a relatively fast-growing population. The federal government has played a big part, employing more staff and consultants.

State final demand (the size of the economy) grew by 3.2 per cent last year after accounting for inflation. Residents and businesses are spending significantly more than they were.

And while rising electricity prices are weighing down other jurisdictions, the ACT has been largely spared due to its long-term renewable energy contracts.

All this has left the ACT budget hundreds of millions of dollars better off than was expected a year ago.

But, can it last?

Winner: Workers

Make hay, Canberra workers: now, more than any other time in living memory, is the moment to ask for a pay rise or find a new job.

Treasury officials note there are consistently more job vacancies in the ACT than there are workers. They also expect new employment opportunities to continue to outpace population growth.

This hasn’t yet contributed to real pay rises; inflation is hitting everyone.

But salaries are already rising in Canberra, mostly in the private sector. The Albanese government has also ditched the 2 per cent a year ceiling on public servants’ pay rises.

Wage growth is forecast to reach about 3.5 per cent within a year, while inflation is expected to drop well below that.

Neutral: Employers

Job vacancies in Canberra are at record highs and under-employment is at a record low, and that’s not great news for employers.

The budget papers cite the lack of skilled workers as a significant risk to the economy. The COVID-19 pandemic and the war in Ukraine have also led to shortages of a range of materials.

Nonetheless, consumer confidence in Canberra is high. Household spending and business investment are buoyant, too.

The current shortages are a challenge to businesses, but the ACT has more than its share of market opportunities to make up for that.

Neutral: Homebuyers

The ACT is continuing to phase out stamp duty in favor of land taxes, which will make housing cheaper than it would otherwise be.

Stamp duty will fall this coming year for properties priced below $1.5 million.

The budget also details plans for 30,000 extra dwellings in Canberra over the next five years.

Nonetheless, that’s what’s needed to house the ACT’s growing population.

There’s no quick fix — at least, not in this budget — for the ongoing crisis in housing affordability and rental availability.

Winner: Schools

Canberra is growing quickly, and the city needs either new or expanded schools to cope with the influx, particularly in northside suburbs.

This budget confirms funding for a new early childhood and primary school in Whitlam, as well as a new high school in Taylor.

Majura Primary, in Watson, and Margaret Hendry School, also in Taylor, will be expanded to take on more students.

The government has also set aside money to install shades, improve ventilation and hire more cleaners for schools across Canberra.

Loser: Gambling

It’s about getting a little harder to make a profit from gambling.

The ACT’s betting operations tax — paid by casinos and businesses that run pokies, lotteries or betting games — is rising from 15 to 20 per cent.

The government says the increase will improve both the economy and Canberrans’ wellbeing.

Winner: Recycling

It’ll cost 1.75 per cent more to dump household, business or industrial waste at the tip.

That’s on top of the usual increase that’s part of the government’s indexation for fees and charges.

Tip fees had been frozen during the pandemic, but the government says it wants people to try to recycle more and reduce their waste.

Loser: Fossil fuels

The ACT already buys enough renewable electricity to cover 100 per cent of what it uses.

The government is now focused on cutting fossil fuels used for heating and transport.

Government offices that use gas will switch to electricity, and poorer Canberrans will be funded to replace gas appliances and install insulation.

Canberra’s gas and diesel buses will be replaced, gradually, with electric ones.

This budget also begins to fund incentives for electric vehicles, such as free registration and exemption from stamp duty.

Last year, 5 per cent of new motor vehicles in the ACT were electric. The government wants that to be as high as 90 per cent by 2030.

Neutral: Healthcare

Healthcare is the giant of every ACT budget, accounting for about 30 cents of every dollar spent.

This budget significantly increases health spending — mostly for the expansion of the Canberra Hospital and to buy new clinical equipment.

However, many of the ACT’s ongoing healthcare problems stem not from a lack of facilities but from the perennial challenge of recruiting skilled staff.

That problem will continue to hang over the health system, and will likely worsen as a result of the ACT’s tight labor market.

Winner: Visitors

The borders have reopened, which means the battle for tourists is on.

The ACT government is bolstering two annual drawcards — Floriade and Enlighten — to attract interstate visitors.

Money has also been set aside to help secure blockbuster art exhibitions.

The budget continues to fund the redevelopment and expansion of the Canberra Theater Centre, though that will take years to complete.