Would the US Government sell off the Pentagon?

With the Abbott Government scoping out selling the Treasury and John Gorton buildings, I took to the op-ed page of the Canberra Times to explain why that's a bad idea on several scores. 

When governments sell out, Canberra Times, 17 February 2015

Sometimes a policy announcement provides a little window into the heart of a government. Last Friday's announcement that the Abbott Government is thinking about selling off the Treasury and Finance Buildings is revealing – and not in a good way.

Let's start with the basics. A well-run government needs a strong public service. In most countries, the central agencies are located close to the parliament, to ensure that the legislature stays in touch with the executive. In Australia, departments such as Foreign Affairs, Prime Minister’s, Treasury and Finance are located within walking distance of Parliament House. Pay a visit to Ottawa, London, Paris or Washington and you’ll see a similar arrangement.

To suggest selling off the buildings that house our central agencies displays a profound lack of confidence in the Australian national project. Can you imagine the United States selling the Pentagon and the State Department? Or the British selling Whitehall and Number 10? Behind the idea of selling off the buildings that house our economic policymakers is a disappointingly narrow view of our national identity.

Unfortunately, it isn’t the first such example. While the American and Chinese leaders were looking to the future with a historic deal to reduce carbon emissions, Mr Abbott was attempting to forge an ‘axis of carbon’ with like-minded climate deniers. When the G20 leaders came to Brisbane, they were greeted by a strange rant from their host about how the Senate was blocking his domestic agenda. Reinstating knights and dames was imperial throwback enough, but knighting a duke led to eye-rolling around the globe.

Even viewed in pure economic terms, the decision to sell key Commonwealth buildings is likely to be a mistake. If you know you want to use a particular asset, you’re unlikely to be better off by selling it and then leasing it back. If you think you can get a good deal from this kind of arrangement, try selling someone a family heirloom, then see how much they charge you to rent it back.

Timing an asset sale at a point when Commonwealth government policies are harming the Canberra economy is also daft. After the Howard Government won the 1996 election, it shed around 30,000 public servants, and sold significant Commonwealth buildings. The job losses depressed the property market, so the sale prices were low. But the market eventually picked up, and by the time Howard left office, the buildings he had sold at fire-sale prices were worth around twice as much.

The impact of Coalition public service job cuts on the Canberra property market isn’t a secret. Showing that he has as much empathy for Canberra homeowners as for poor people, Treasurer Hockey said in 2013 ‘There is a golden rule for real estate in Canberra – you buy Liberal and you sell Labor’.

If he believes this, it’s hard to see why Treasurer Hockey also thinks it makes economic sense to sell Commonwealth government buildings at the same time as he is literally decimating the Australian Public Service. Shedding 16,500 public servants is not only a broken election promise, it also risks sending Canberra’s economy into the same sort of  tailspin that occurred in the late-1990s. (And don’t believe talk of a ‘top secret Labor plan’ to cut the public service – public service numbers rose in line with population from 2007 to 2013.)

If there is any message out of the recent state elections, it is that voters are uncomfortable with asset sales. In this case, you don’t have to be a screaming leftie to see the folly in the government’s plans. Selling the buildings that house our central economic agencies makes no economic sense, and displays a disappointingly ‘little Australia’ view of our place in the world.

Andrew Leigh is the Shadow Assistant Treasurer and the Federal Member for Fraser. His website is www.andrewleigh.com.

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