Page 1734 - Week 06 - Wednesday, 13 May 2015
(2) calls on the ACT Government to:
(a) reveal whether they will make an upfront capital contribution to Capital Metro; and
(b) disclose the revised annual availability payment if such a contribution is made.
I have moved this motion today because it is critically important that Canberra taxpayers understand the full ramifications of this government’s decision to go ahead with the ill-conceived light rail project.
My motion today calls on the ACT government to disclose the expected value of the availability payment. For reference, the availability payment will be a periodic payment made by the ACT government to the successful consortium. It is a creature of the public-private partnership, which is, of course, the ACT government’s preferred model for procuring the ACT light rail system.
The payment reimburses the consortium for the $783 million outlay they will use to build the project as well as compensating the consortium for the operation, maintenance and any finance costs they will incur in constructing and operating light rail. It will, of course, also include a profit margin.
The first payment is due to be made after the trams become operational, sometime in 2019 or 2020. From that point, the ACT government will make an annual payment from budget appropriations to the successful light rail consortium for the next 20 years. On the ACT government’s own timetable, we will not stop paying for light rail until June 2039, some 23 years from now.
The contract term of 20 years is a very important period to remember. It is not just today’s taxpayers who will be footing the bill for light rail; it is the first homebuyers in 2035 who will also be paying for light rail—that is, people who are perhaps not even born will be paying for light rail. Make no mistake: light rail is a taxpayer bill which will transgress generations. It is an intergenerational cost that many future Canberrans will be paying.
The annual availability payment gives us the true cost of light rail. Respected economist David Hughes believes the value of this payment could be approximately $80 million to $100 million every year. Of course, if the government proceeds with an extension to Russell, as has been widely speculated, the value of the payment increases, potentially to $120 million or $130 million every single year.
This, of course, is a significant impediment to future opportunities in the ACT budget. With so many competing priorities, it is hard to believe any future ACT government will be able to balance the budget and pay for light rail at the same time. Somewhere in the future, service delivery will have to drop, taxes will have to be raised or both. In fact, we are already seeing this. Just over the last couple of years we have seen our city’s urban amenity degrade even further, with $15 million being stripped from ACT Policing. Rates have been significantly increasing since Labor came to power, especially since 2012.