Governing the City State - Chief Minister and Treasury Directorate ...

looming risks to revenue, which will be considered by Mr Ted Quinlan in his Review of theACT’s taxation system, including the fact that most developable land in the ACT has alreadybeen developed. Tackling these issues surrounding Canberra’s future shape will be difficult,and involve close collaboration within the ACTPS and the community.The Review notes work is underway within the ACTPS on a Review of the IndustrialArrangements in the ACT community sector, including issues surrounding the national PayEquity case by the Australian Services Union.The ACT’s Relationship with the Commonwealth GovernmentIt is inescapable that there are two governments based in Canberra and that there willinevitably be some sharing of responsibilities between them given Canberra’s status as thenational capital, even if that sharing of responsibility occurs in the context of a veryunbalanced power relationship. There are from time to time, as there are in any relationship,points of friction and disagreement, of frustration and disappointment, but in general, therelationships between the ACT and Commonwealth Governments, and the ACTPS and theAPS are close and productive.Those relationships are, however, complicated by a number of legacy issues that addunnecessary delay and uncertainty to decision making processes in the public and privatesectors, or amount to a significant distraction and reputational (if not legal) risk.Commonwealth Funding to the ACTAs has been outlined above, grants in various forms from the Commonwealth Governmentcomprise around 44% of total ACT Government revenue. The Commonwealth hashistorically provided compensatory payments to the ACT Government in recognition of theunavoidable additional costs incurred by the ACT because of Canberra’s status as thenational capital, or because of legacies inherited from the Commonwealth at self government.This process, in part, recognises the impact of the National Capital Plan (NCP) prepared bythe NCA in placing restrictions on some planning and development decisions in the ACTwhich can lead to higher costs for the ACT Government (including in relation to policing andmaintenance of certain roads).Under the previous federal financial framework, and as recommended by the CGC in thelead-up to self government, the ACT received two Specific Purpose Payments to compensatefor the extra costs arising from its role as the national capital:• Assistance for Water and Sewerage Services - for the higher maintenance and operationalcosts arising from the excess length of water and sewerage mains due to the dispersednature of urban development in the ACT; and• National Capital Influences - compensating for a number of factors, such as its ‘ratingdisability’ – the inability to rate Commonwealth property and the extra costs the ACTGovernment incurs due to the design and layout of the National Capital.Context for the Review: 49