A politician says the ACT should "hand back Jervis Bay" and turn over Yarralumla to NSW in response to Chief Minister Andrew Barr's "unbecoming" ultimatum.
NSW upper house Labor MP and spokesperson for Goulburn Bob Nanva said in the NSW Parliament that Mr Barr should "stop carrying on in the media, stop with the histrionics" while the ACT negotiates with NSW over water supply and land.
In a May 18 letter to NSW Premier Chris Minns, Mr Barr said the ACT would only supply water to Yass, Murrumbateman or Bungendore if NSW handed over a 1000-hectare parcel of land called Parkwood.
Yass Valley Council formally voted to keep Parkwood, an area of NSW on the border of the ACT earmarked for development, within the council area in December last year.
"Let's be clear, there's no obligation on the ACT to provide water to NSW. We do so only under an arrangement where there is something in return for us," Mr Barr said on Tuesday.
"The Yass council is not in a position to negotiate with us on anything because they have nothing to offer."
He said he did not want to negotiate on the issue through the media and those would be his final public comments on the issue.
On Wednesday, Mr Nanva said Mr Barr had issued an unbecoming and extraordinary ultimatum.
"If federalism is to degenerate into public slanging matches and an unhelpful game of ultimatums, NSW can also talk in ultimatums. If the ACT wants to turn the tap off, then we say, 'Give us Yarralumla or we'll turn the power off. And while you're at it, hand back Jervis Bay as well'," he said.
"I am being facetious. I am not being serious, and I do not believe Mr Barr is either. Behind the scenes, officials from both governments have been working cooperatively and diligently to progress this project."
Mr Nanva said Parkwood should remain in NSW.
"The people of the Yass Valley are quite happy with being NSW residents, and they do not want their municipal area handed over to a territory government. Let us keep Yass in the premier state," he said.
"We would do well to remind ourselves of some history. The origin of the ACT lies in NSW ceding its land to the federal government. We even handed over Jervis Bay so they could have a seaport.
"The electricity the territory depends on largely comes from NSW. In fact, much of it comes through a substation in Yass.
"I urge the Chief Minister, Mr Barr, to stop carrying on in the media, stop with the histrionics and stop threatening to send in a crack squad of federal public servants to annex Parkwood. It is unbecoming of him and unbecoming of a senior member of the national cabinet."
Jervis Bay is under the jurisdiction of the Commonwealth, for which ACT laws apply.
The ACT receives energy from the national grid, and funds wind and solar farms from around Australia, and a mandatory contribution towards renewable energy, to make up for the territory's consumption.
Power from the Yass substation is transmitted to the ACT and NSW.
The development in the proposed suburb of Parkwood is expected to create about 5600 houses across the border of NSW and ACT, north of West Belconnen.
It was zoned as a suburb by Yass Valley Council in 2020 and the council, NSW and ACT governments signed a memorandum of understanding that it would be serviced on a cross-border basis.
In December last year, Yass Valley Council voted to keep Parkwood in its council area. Mr Barr said the council had changed its mind, but the council said it did not previously have a position.
Yass and surrounding towns and suburbs receive water from Yass Dam, but residents have complained for years of poor water quality and restraints. The NSW and federal government have put $38 million to upgrade the treatment facility.
Mr Nanva said Yass Valley Council was exploring different options for water supply to the development, including the feasibility of the ACT supplying water.
"The ACT government does need to consider how its water supplies will be able to handle projected future growth," he said.
"It may well be that the Parkwood development needs to look elsewhere to secure the water it needs.
"At the end of the day, we are in a national housing crisis, and what matters most is finding a way to facilitate good development that provides people with jobs and, most of all, an increase in the supply of housing."
