Page 2897 - Week 07 - Wednesday, 29 June 2011
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But it goes on. Alternative options for accommodation were not properly explored. The government only explored one other building in Civic to occupy, which was the Finlay Crisp offices. No other buildings were considered. That is not a thorough analysis of the market. The cost and feasibility reports explicitly excluded some options of private ownership as they were excluded from earlier on. Recommendation 17, which is not agreed, not surprisingly, is:
The Committee recommends that scenario options 2 and 4 be included in the CB Richard Ellis Cost Analysis report as they were ‘excluded’ at an earlier date and that the Government report to the Legislative Assembly before the project proceeds.
Why would you not want to consider all of the options? The government have blindly pursued this office project. They seem to be the only people who think it is a good idea, for $430 million. This is why they had to put together these dodgy numbers. This is why they had to put together the dodgy savings. The only way that you can properly try to justify a $430 million spend instead of all the other really important projects that the community wants is if you can point to some savings. The savings do not add up. They have not looked at whether or not private rental would actually be a better way to go. But most of their claimed savings, in fact, are about co-location. They have nothing to do with ownership and they have not taken that into account.
The committee goes on, in recommendation 19:
The Committee recommends that a comprehensive analysis be completed on the effect the new government office building will have on the private property market and the potential crowding out of private investment and that the ACT Government report to the Legislative Assembly before the projects proceeds.
This is critical. We have massive vacancy rates in the ACT at the moment. The government wants to spend $430 million to have larger vacancy rates. This is not good for our economy. That is not sensible economic management. That has consequences, consequences which have not been taken account of by this government.
Then we have the conflicting advice on how the building will be funded. The Chief Minister and the Deputy Chief Minister both claimed, through questions on notice, “The government has not indicated its preference to borrow for a new building and the budget estimates indicate sufficient cash will be available.” However, the former Chief Minister, Jon Stanhope, stated:
… by financing the building itself and taking advantage of the Government’s AAA credit rating the Government could access finance at rates significantly below those available to the private sector.
In the estimates hearing a LAPS official claimed:
The cost of borrowing is included in the feasibility analysis.
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