Let’s focus instead on ANU law professor Nick Seddon’s pronouncement that the government can pass legislation that allows it to revise its contract with Transurban, leaving the company with no recourse to appeal. The government can pass any act it likes, after all. Such an intervention would need a good basis, and it has: Transurban’s failure to adequately manage the project behoves it to pay the additional costs. But this idea makes governments, property pundits and conservative lawyers very nervous over the spectre of severe harm to "investor confidence". A graffiti piece depicting demolition of the Corkman pub, directly across the road from the site. Credit:Joe Armao The cowboy developers who illegally demolished the Corkman Hotel in Carlton three years ago seem to have similar sway. The case put by Victorian government lawyers for not compulsorily acquiring the site is that the cowboys are entitled to highest and best-use price (which has doubled since they bought it in 2015). The various relevant Acts in fact do not prescribe the compensation to be paid, and they do not mandate highest potential price. Market price for current use is established valuation practice – for example, on properties to be acquired for a road, or assessments for council rates. These are valued not at what could be built on those sites but on what is actually there (often at less than their owners imagine).

As the government is reluctant to make this case in VCAT, Nick Seddon’s opinion raises an enticing alternative. The Land Acquisition and Compensation Act could be amended in Parliament to clarify and fix all future compensation to existing use value. The government could acquire the Corkman site at the value of the existing use of a vacant inner-city block. This would produce an interesting discussion, and with potential use value out of the equation would reveal the skew of speculation on the property market. Premier Andrews has suggested the concession deed with Transurban could be altered, demonstrating some openness to legislating in the interests of taxpayers rather than corporate giants. He will face almighty resistance over the purported harm to investor confidence, however, and soon enough the "sovereign risk" argument will be raised. Sovereign risk has come to mean (erroneously) that any jurisdictional change to the investment conditions of a private entity that the entity does not like will send it and others packing. This misuse is especially silly in a stable nation such as Australia. All legal and policy changes confer disadvantage to some and advantage to others, but more importantly, there is no evidence of investors leaving when things don’t go their way.

Loading Replay Replay video Play video Play video It was so-called sovereign risk that precipitated the government’s voluntary payment to Lendlease after cancelling the contract for the East-West Link. If Parliament had legislated to preclude construction of the Link we would not have had to pay compensation at all. Would Lendlease have walked away from doing further business in Victoria? We will never know. Will Transurban pull out from further infrastructure works if its profits are reduced to ensure the West Gate Tunnel goes ahead at no further cost to taxpayers? Will developers not build here if legislation is changed to ensure they are not rewarded for illegal behaviour? Lendlease famously spares no expense in contesting government regulations and altering contracts in its favour – it has done so in Melbourne (at Docklands), Sydney and London. As Clay Lucas reported on January 30, a former NSW auditor-general says of Transurban that “when they leave a negotiating room nothing is left on the table, not even the Laminex”. Raman Shaqiri and Stefce Kutlesovski illegally demolished a historic building, illegally dumped asbestos, fought the fines they incurred as a result, failed on their promise to rebuild the site, failed on their promise to turn it into a temporary park, and still expect to be able to build to 12 storeys on the Corkman site.