Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

The Liberal government's biggest piece of land transport infrastructure is the proposed freeway through Royal Park in Melbourne, which it calls the East West Link. In fact, it does not link the east and west at all. Nor does it have the support of most Victorians, who know perfectly well that if it proceeds it will come with a massive opportunity cost and put paid to their hopes for a rail line to Doncaster, a rail line to Melbourne Airport, rail to Mernda or public transport to Monash University. In particular, it does not have the support of local residents, who are appalled by its impact on Royal Park, the Moonee Ponds Creek and the Melbourne Zoo. I commend Julianne Bell, the tireless secretary of Protectors of Public Lands Victoria and committee member of Royal Park Protection Group, and all the community groups who are working incredibly hard to stop this project happening: David Muir and the Kensington Association, Kaye Oddie and the Friends of Moonee Ponds Creek, the Carlton Association and many others.

For a Liberal government that grandstands about fiscal rectitude, this $8 billion project is being put forward without passing any serious cost-benefit analysis. The government claims that the benefits of the $6 billion to $8 billion freeway outweigh the cost but refuses to provide details, claiming that this would compromise commercial negotiations.

The government's business case relies totally on the assumption of what economists call an 'agglomeration effect', in which population and economic clusters in cities lead to efficiencies and add to business productivity. The Linking Melbourne Authority, which provides information on road infrastructure projects conducted on behalf of the Victorian government, has referred to a book by the American writer, Edward L Glaeser, called Triumph of the City. Its main thesis is the agglomeration benefits that create cities. But the Linking Melbourne Authority does not appear to have read the book, because the book does not argue that freeways are the path to these benefits, in fact it argues quite the opposite. Mr Glaeser argues that 'driving creates negative externalities that hamper urban economies'. He warns against highway building, calling it 'antiurban'. I quote:

For decades we have tried to solve the problem of too many cars on too few lanes by building more roads, but each new highway or bridge then attracts more traffic.

The Age commentator, Kenneth Davidson, has accurately pointed out in relation to the Royal Park freeway:

It will cripple the state's fiscal position for many years through massive payments to the public-private partnership consortium that will finance it.

The financial burden on the Victorian taxpayer will be so big that it will ''crowd out'' the state's core responsibilities for funding schools, hospitals, rail transport and even other roads for at least a generation.

An email recently obtained through FOI illustrates that the Victorian government's own economic consultant, Chris Tehan of Evans & Peck, told the government that the business case had dramatically overestimated the wider economic benefits to get an artificial figure of a $1.40 return. According to The Age:

… the methodology ''has not been used in any of [the Transport Department's] other public transport projects or program modelling to date''.

…   …   …

The financial case for the east-west link hinges on a prediction that toll road use will jump over the next 30 years because of rising wealth and shrinking petrol and CBD parking price rises.

The business case for the link makes the controversial assumption that: firstly, a driver's willingness to use toll roads will increase by 1.4 per cent per annum due to rising incomes; secondly, the rate of increase in the cost of running a car will fall from the current two per cent per annum in real terms to half a per cent per annum by 2041; and, thirdly, that the rate of increase in the cost of inner-city parking, which is currently increasing at four per cent per annum in real terms, will fall to 0.5 per cent by 2041.

The Victorian government has been caught out manipulating modelling to produce a favourable result.

Mr Briggs interjecting—

I listened to you in silence, you ease up.

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