New decision on way forward with government office accommodation

It’s a long way from Canberra to Brussels, but there is no doubt that the bad economic news coming out of Europe affects all of us. While our bottom line remains healthy and careful management of our finances has seen us retain our AAA rating, the ACT Government has, like every other government had to review all our expenditure including our infrastructure program. This work has been running alongside our budget process and has resulted in us taking some new decisions.

Last year we foreshadowed a plan for new government office accommodation in Civic. The cost of this project totalled $432 million dollars. We have decided to transfer those funds to the health infrastructure program and deliver the office block project through the private sector. Whilst we remain committed to improving office accommodation for our staff as well as the benefits of centralising in civic, we have taken the decision that our budget cannot support this project as well as all the other infrastructure projects that require funding at the same time.

The health infrastructure program is an exciting project, the largest capital program ever undertaken in the ACT. It should be no surprise to anyone that caring for the health and wellbeing of Canberrans is and always will be at the very forefront of my government’s priorities. We know this program will cost in excess of an additional $1 billion once it is complete. This includes the new sub acute hospital, new tower blocks at Canberra Hospital and capital upgrades at Calvary Hospital.

By taking the decision to re-priorities it means that there will be no upfront cost of $432m to the budget for office accommodation. While the original business case for the government office block showed us that over time it would be cheaper, what we must confront at the moment is the need to harness our capital expenditure in the face of difficult global economic conditions. So now we will spread the cost over time, lease new accommodation and harvest the capital we would have spent upfront and invest it in health infrastructure.

This decision also means that we can also facilitate private sector investment in the ACT at a time when the jobs generated by a project of this size are so important. I’m confident, especially after the recent successful round of bids for similar work in Gunghalin, that there will be spirited competition from the private sector to provide upgraded 4.5 star office accommodation in Civic for the ACT Public Service.

No doubt my political opponents will harp and criticise about our decision, but my government will never make any apologies for spending scarce taxpayers’ money on health. In my mind this decision passes the common sense test: It is fiscally responsible. It allows increased effort on our hospital plans whilst allowing us to deliver the office block at the same time. Would love to hear your views