Page 1943 - Week 07 - Wednesday, 3 June 2015
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government make an availability payment to the successful consortium every year for 20 years or, if you go by the last CityNews article, 20 to 25 years. Once again we have shifting goalposts when it comes to this project.
We have heard many people say that the government will not be paying for this up-front. However, again there is talk about a $375 million capital payment, albeit one that is not included in the budget. Respected economists such as David Hughes believe this availability payment will be somewhere between $80 million and $100 million. The ACT government will reduce this figure with a capital contribution, according to some of their rhetoric. A further decrease to the availability payment will come if the government increases the term of the contract from 20 to 25 or even 30 years, or pays an additional lump sum. Regardless, if the government does extend the line to Russell, the cost will surely exceed $1 billion—all this, and still less than the catchment zone of the route 200 bus.
If we assume an availability payment of $75 million per year then how does this government propose to fund light rail going into the future? Whether it is $75 million, $80 million, $100 million or even more, that is a huge amount of money that we and our children will be paying for many years to come. Of course, there is little, if any, saving to be found in the ACTION bus network. Buses will still be required for school services and for the vast majority of Canberra. As I highlighted earlier, buses will also be required to transport people to and from Gungahlin town centre, for people forced to transfer.
How do we support light rail? Do we increase our deficit to $672 million? Do we take away bus services? Do we stall on building new, essential roads? Do our rates go up by 12, 15 or even 18 per cent? Do our parking rates increase by 10 or 15 per cent? Do we cut even more beds from the UC public hospital or do we reduce spending in other areas of health? Do we have overcrowded classrooms? Do we have poorly maintained sporting fields? Do we have poorly maintained roads, footpaths and cyclepaths? Or do we take away even more people from the police force?
This is a very real opportunity cost of a very real scenario, in the event that this government goes ahead with light rail in full. These are unfortunate decisions that a future ACT government will have to make because of decisions that are being made here and now by this government.
This year the ACT government will spend $16 million on the Capital Metro Agency. Whilst this is a small sum compared to the total availability payment, it still acts as a significant burden on this year’s budget, especially when you consider the opportunity cost of that $16 million.
For starters, could not this money have been spent on actually completing the duplication of Ashley Drive rather than once again building half a road? Whilst I commend the government for getting on with part of this road duplication, I am confused about why the government did not go ahead with the full duplication to Johnson Drive. That involves taking the duplication to Johnson Drive an extra 500 metres or so from Ellerston Avenue.
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