Chief Minister Andrew Barr has claimed the Liberals' policy to cap rates at 2.2 per cent could rip a hole worth hundreds of millions of dollars in the ACT budget.
But Opposition Leader Elizabeth Lee, who announced the party would cap household residential rate rises for four years if they win the ACT election in October, rejected the idea that the Liberals would be forced to cut spending.
The 2.2 per cent cap on individual household rates bills is based on the 10-year average of the wage price index, the party said.
General rates, including both household and commercial rates, will make up about 9.9 per cent of total government revenue and nearly 30 per cent of tax collected by the ACT in 2024-25, budget papers show.
Mr Barr said the policy would leave the territory budget with a revenue shortfall and constrain increased spending on services needed for a growing population.
"What it will mean is that rates will go up but not by enough to fund essential community services," he said.
"Revenue will be down by hundreds of millions of dollars and stamp duty won't be able to be cut."
Mr Barr instead confirmed stamp duty would be cut entirely for owner-occupiers ahead of investors in the ACT, under a re-elected Labor government.
Mr Barr said if the Liberals wanted to phase out stamp duty under their policy they would be forced to make cuts elsewhere.
"They're just going to have to cut something else in order to find money for further stamp duty cuts," he said.
Mr Barr said under the Liberals' plans, ACT public sector workers would not be able to receive wage rises above 2.2 per cent.
Ms Lee said she thoroughly rejected the government's assertion it would result in a budget gap in the hundreds of millions of dollars.
The Opposition Leader did not say how much the Liberals had calculated this would result in missed revenue, instead she said they were exploring ways to make up for the revenue highlighting land sales as a potential source of income.
"In terms of this government's response, I totally reject what they are saying," Ms Lee said.
Ms Lee said there would be no cuts to the public service to fund for the shortfall. She also pointed to the Liberals' plan to abandon light rail to Woden as a cost saving.
The ACT is more than halfway through a 20-year program to phase out stamp duty and replace the lost taxes with revenue from residential rates.
The Liberals have confirmed they would continue to phase out stamp duty if elected but cannot say whether it will be able to meet the 2032 deadline set by the current government. Ms Lee said she did not think the government would even be able to meet its own deadline.
