Tuesday, January 22, 2008

Tuesday Column: Once upon a time the ACT was booming

Not now.

The ACT economy has stalled, seized up.

If you are looking for evidence drive south along the Kings Avenue Bridge to the St Marks National Theological Centre on the shores of Lake Burley Griffin.

Its director Tom Frame wants to boost his student numbers by 5 per cent each year.

He gets inquiries from all over the country. As part of Charles Sturt University he is offering a degree in theology that’s broad-based rather than conservative and evangelical.

But he is unable to increase his on-campus enrolments at all. They are stalled, like the ACT economy.

“I used to be able to invite students to come here from Sydney to live. I’d tell them it’s cheaper,” he told me...

But not now. “Its actually cheaper to stay in Sydney and live in Newtown near the Moore Theological College, even though its fees are much more expensive,” he said.

The on-campus students he does get live wherever they can. “Some share houses in Canberra, some live in Yass, some in Goulburn, some in Cooma. They use a lot of petrol.”

So concerned is Tom Frame that he has asked his university to consider building its own two-bedroom apartments in Barton to ensure that some of his students have somewhere to live. Otherwise he says St Marks might vanish.

Canberra’s trend economic growth as measured by state final demand slowed to zero in the most recent quarter. Trend jobs growth in the past year is also near zero (slightly lower actually).

That’s right. In trend terms there are no more ACT residents employed than there were a year ago. Not one.

At the same time nationwide employment has soared by 258,000.

The ACT has run out of new workers.

It isn’t that employers don’t want people. The Bureau of Statistics says some 6,000 vacant jobs are going begging here right now, more than ever before.

More than half of them are in the private sector. Chris Peters of the ACT & Region Chamber of Commerce says workers often come from interstate to start jobs, discover how hard it is to find somewhere to live here, and return home.

“They literally can’t find a house to live in,” he says. “They get a room in a motel and can’t find a home.”

The public service is attempting to get around the problem by including in some of its advertisements for senior jobs an assurance that although the position is based in Canberra the successful applicant “may choose to commute”.

It’s no way to run a country. It’s as if we’ve put a “full-up” sign on the entrance to the nation’s capital.

(We haven’t of course. Bizarrely, at a time when people who already want to come to the ACT can’t find houses, the government is funding a “Live In Canberra” promotion.)

It should never have come to this, and if the ACT had a better opposition the government would have been held accountable.

Canberra is surrounded by government-owned land already set aside for development. The government could have developed that land ahead of time before it was needed.

Instead - until it got a move on last year - it waited as the price of land in the ACT climbed.

The international consultancy Demographia this week published its analysis of housing costs in more than 200 English-speaking cities.

It rated Canberra “severely unaffordable” along with New York, London and Los Angeles. We hit the big-time.

It is often said in defence of Canberra’s high housing prices that our workers are paid more than the national average. (Demographia took this into account in its assessment of ACT housing prices and described them as severely unaffordable anyway.) But the other side of the coin is that our private sector workers get less than the national average, and our students much less.

Bec Adams runs Anglicare’s ACT Housing Program. She says the rental market is now so tight that even Canberra residents earning the average income or more are unable to get houses to rent.

“We have had people ringing up on our crisis line saying that they are earning $55,000, they have tried 100 different real estate properties and are not able to get any of them because they have two dependents.”

Many landlords don’t like single parents and the problems they feel they bring, whatever their income. She adds that some are sympathetic, but in a over-tight rental market they can pick and choose on whatever criteria they want.

Shared accommodation, once a traditional part of student life is hard to get and no longer affordable for some students.

Instead many students and many workers are “couch surfing”, moving from house to house begging favours from their hosts.

It’s not always pleasant, and it can put them at risk.

“When you are couch-surfing you have no tenant rights,” Bec Adams says. “It’s really volatile, there’s often abuse. Young people sometimes feel like they need to do stuff to maintain housing, and sometimes that stuff is abusive to their physical and mental well-being”.

Bec Adams is aware of sexual abuse and forced drug dealing as a result of couch-surfing. She says they are more common because there’s more couch-surfing.

Once when Anglicare got people out of emergency housing they stayed out. Now many keep returning.

Some have benefited from the ACT’s extreme housing shortage. Among them some existing home-owners. One of John Howard’s ministers once observed that “rising prices make for happy voters”.

The ACT government itself has benefited. It gets more stamp duty when prices are high and stamp duty is an important source of income.

Much of the boom in prices would have happened anyway. Prices have risen everywhere.

But in no other state or territory have they risen so high as to stop new workers coming in to take up jobs. In no other state or territory are there more job vacancies than there are people looking for work able to fill them – roughly twice as many at the moment.

Last year the Stanhope government belatedly indicated that it had learnt from its mistakes and acted quickly to release more land.

In time things will improve. Canberra’s educational institutions and employers will eventually be able to function more normally. And Mr Tanner’s razor gang will help as well by cutting the demand for public servants.

But it shouldn’t have come to this. A while back we were booming like Western Australia. We’ve stopped.