ACT senator and Finance Minister Katy Gallagher said the federal government is "not in a position" to waive the territory's $100 million historic housing debt.
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Senator Gallagher said with the states and territories owing a combined $1.6 billion in housing debts to the Commonwealth, simply forgiving the ACT's loan was "not that easy".
The admission comes after Senator Gallagher had called out the former Coalition government, including ex-senator Zed Seselja, for not waiving the territory's debt during her time in opposition.
In a veiled message to ACT independent David Pocock, Senator Gallagher said the Labor government wouldn't do special deals in exchange for votes on the Senate floor - as the previous Coalition government did with Tasmanian Jacqui Lambie to waive her state's housing debt.
"I'm not Finance Minister for the ACT - as much as at times I would like to be - I'm Finance Minister of the country and I don't think it's right to waive debts for the price of a vote on the Senate floor, which is how it's happened in the past," Senator Gallagher said on Wednesday.
The Labor government has been under pressure from Labor Chief Minister Andrew Barr and Senator Pocock to waive the ACT's historic housing debt, a move which would allow the funds used to service the loan to instead be spent on much-needed social and affordable housing in the nation's capital.
Mr Barr has written to or met with senior government ministers, including Senator Gallagher, about the debt since Labor's election win as he lobbies for a "satisfactory resolution" for the ACT.
Senator Pocock last month turned up the heat, hinting that he could use his crucial upper house vote as a bargaining chip to pressure the government to forgive the decades-old loan.
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But the lobbying and veiled threats haven't worked.
Speaking with reporters in Canberra, Senator Gallagher said the government was "not in a position to waive the ACT's housing debt".
She revealed the ACT wasn't the only jurisdiction pushing to have their historic loans forgiven, with a combined $1.6 billion in debts still owed to the Commonwealth.
Tasmania had its $150 million debt wiped in 2019 after Senator Lambie agreed to back the Coalition's income tax cuts.
South Australia's $320 million debt was wiped in 2013, meaning there is precedent for a Labor government doing a deal with one state.
Senator Gallagher stressed the new government was "absolutely leaning in on" housing, including through its $10 billion plan to fund 30,000 new social and affordable properties in the next five years.
More to come
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
