ACT Chief Minister Jon Stanhope has expressed his concern that a slashing of public sector jobs due to the financial crisis could ruin the capital’s economy.

ACT Chief Minister Jon Stanhope told the ABC that he had a detailed discussion with Kevin Rudd in which he emphasised the importance of the Commonwealth public service to Canberra's economic stability

“In the context of national calls for employers to safeguard the jobs of their employees, the number one employer, employing almost 40 per cent of Canberrans is the Commonwealth Government,” he said.

According to the Chief Minister, cuts to the public service in 1996 led to a fall in the ACT's population and devastated the economy.

The Chief Minister also said the Treasury department is still anticipating unemployment will double to 5 per cent.

“The greatest risk to the ACT and unemployment in the ACT lies in decisions that the Commonwealth will or may take about its own expenditure and its own employment levels,” he said.

"In the context of national calls for employers to safeguard the jobs of their employees, the number one employer, employing almost 40 per cent of Canberrans is the Commonwealth Government," he said.

The Chief Minister said the Prime Minister was sensitive to his concerns but also offered no guarantees.

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