WHILE the future looks “relatively bright” for the ACT economy, Treasurer Andrew Barr sees a few “dark clouds on the horizon”.

“We’ve got one of the strongest economies in the country, second only to WA… but the challenges are the risk to employment from decisions by the Federal Government,” he says.

“We need to build off our strong public-sector base and to further develop sectors of our economy where we have a comparative advantage over other parts of the country.”

Shadow treasurer Brendan Smyth, agrees there are “struggles” ahead, but when it comes to economic directions, the two parties differ greatly.
While Labor places a clear focus on health, education and jobs, the Liberals stress the need to improve local services with lower rates and charges.
Smyth says the party’s main concern is “improving the cost of living”.

“You can get the economy right, but if you can’t afford to live here it’s not a very nice place to live,” he says.

“Water has tripled, rates have doubled, electricity has gone up – people are finding it hard.”

In an effort to tackle housing affordability the Opposition has pledged to halve the cost of stamp duty for first-home owners on properties up to $500,000 and abolish tax reforms, reinstating the first-home buyers’ concession scheme to include established homes and protecting homeowners from a ”tripling in rates”.

Smyth says the party’s promises are achievable with “controlled spending” – but there will be some “tough choices” to make, and he admits that the party won’t match every individual tax cut from Labor.

“We’d love to give tax cuts to stamp duty and to payroll tax and those things – but not at the expense of tripling people’s rates,” he says.
“Tripling people’s rates is not a choice, so we won’t be matching every individual tax cut for that reason.
“We will make sure that we get our spending in control so that it’s not wasting money on capital works… it’s about making sure we get ahead of things and we build in a timely fashion so that you don’t pay extra funds to catch up.”

Barr says Labor’s plan is to further develop sectors of the economy where the ACT has a comparative advantage over other parts of the country.
“We’ve sought to bring together education, health and the jobs agenda for the city in a coherent package that really goes to build on both strengths,” he says.

“We’ve currently got the lowest unemployment rate and we have a healthy level of growth.

“Our focus is also about encouraging small and medium-sized business to grow. One of our key reforms is to cut payroll tax.”
He waves off Smyth’s claims that housing is unaffordable in Canberra.

“Certainly, people have indicated if you can get properties below $400,000 particularly below $375,000  they sell very quickly,” he says.
“We’ve changed our affordable housing policy, we’ve put in place three thresholds so one to two bedrooms will be under $290,000, two to three will be $340,000 and three and over will be $373,000.”

According to Barr, the purpose of Labor’s tax reform package was to phase out taxes that were ”inefficient and expensive to collect”.

He denies the Liberals’ claim that Labor will triple rates, accusing the Opposition of “misleading the community”.

“I think the important point is that, over a given period of time, rates increase and the size of the increase is capped,” he says.

“We are increasing those charges, but not at the rate that the Liberals are saying – no one’s saying the rates won’t go up, but they’re not tripling… the only thing that’s tripling is the size of Zed Seselja’s nose every time he repeats that lie.”

But Smyth believes the proof is in the Quinlan Review; and “it’s all down to simple mathematics.”

“Labor’s got three choices. They’ve either committed a fraud on tax reform and they can’t fund it because there’s a $384 million hole in their Budget, they’re either going to invent new taxes, or they have to triple people’s rates,” he says.

“Because at the end of the cycle the government has $384m in which to find funding for. If they can’t find that $384m, then there’s three or four taxes they can’t get rid of.”

Barr says Labor plan to increase the number of houses built, while Smyth says the Liberals aim to “make existing homes more affordable”.
Both parties have promised not to cut staff numbers in the ACT public service.

While Labor wants to grow their public-sector base, the Liberals are keen to build on the Territory’s “dwindling” private sector, which is currently sitting below 50 per cent, according to Smyth – but he is adamant they will be “hiring, not firing” in terms of the public service.