Andrew Giles (Scullin, Australian Labor Party) Share this | Hansard source

I rise to speak on the Infrastructure Australia Amendment (Cost-benefit Analysis and Other Measures) Bill 2014. I begin by echoing some of the concluding sentiments expressed by the member for Lindsay, the previous speaker. I think it is just unfortunate that those sentiments about the importance of independent decision-making and rigorous cost-benefit analysis cannot be applied to this government's infrastructure record so far or indeed, lamentably, to the bill which is before us now.

The purpose of the Infrastructure Australia Amendment (Cost-benefit Analysis and Other Measures) Bill 2014 is to amend the Infrastructure Australia Act, it is said, to make it a function of Infrastructure Australia to conduct a cost-benefit analysis of those infrastructure projects which are nationally significant and which also involve Commonwealth funding of at least $100 million. So far, so good but, as ever with this government, closer scrutiny is warranted.

On 11 May 2005, Labor announced that it would establish Infrastructure Australia if elected to government. Subsequently, on 2 August 2007, the then Leader of the Opposition, Kevin Rudd, detailed Labor's plans for Infrastructure Australia, stating that it would have three divisions: to deal with policy and regulatory issues, driving reform on legal, tax, planning and infrastructure finance matters; to audit the adequacy of the nation's infrastructure, identify weaknesses and prioritise projects; and, lastly, to evaluate the business cases of projects and project financing options including private public partnerships and to manage the probity process. Consistent with that policy, the Infrastructure Australia Act was enacted, and Infrastructure Australia was established, in April 2008. In short, Labor delivered on its election commitments.

What of the coalition? Before the last election, the coalition stated that it would:

… strengthen the role of Infrastructure Australia, to create a more transparent, accountable and effective adviser on infrastructure projects and policies.

In particular, the coalition promised that it would:

However, despite this breadth, the coalition's policy document is confusing, because a few pages down it states that the cost-benefit analysis requirement would apply to 'all infrastructure projects worth more than $100 million', not just ones where the Commonwealth infrastructure exceeded $100 million. This confusion is relevant. Does it apply to the capital value of a project or to the level of Commonwealth funding to be applied to a project?

Unfortunately, this bill chooses the soft option, with the cost-benefit analysis to be applied only to projects where the level of Commonwealth funding exceeds $100 million. This means that for a project worth, say, $5 billion for which a state government was seeking Commonwealth funding of up to $99 million there would be no cost-benefit analysis conducted by Infrastructure Australia. In any event, as with so many of their pre-election promises, the Liberal Party walked away from this commitment and invested massive amounts of money in projects like the East West Link in Melbourne and WestConnex in Sydney, without a cost-benefit analysis to be seen.

In fact, as you are well aware, Mr Deputy Speaker Mitchell, in Victoria we have seen quite the opposite. The Victorian Liberal-National government has steadfastly refused to provide the people of Victoria the full facts and figures to enable them to make an informed decision on the East West Link project. The Prime Minister was asked about this on Melbourne radio. He confessed that he had not seen the business case but was prepared to take the Victorian government's word for it. How does that sit with the nice words expressed so eloquently by the member for Lindsay earlier and with the avowed purpose of the bill which is before us? This is despite, or perhaps because of, initial Infrastructure Australia analysis indicating that this project is a dud. The best evidence we have suggests a cost-benefit ratio of between 0.5 and 0.8. Instead of having regard to the evidence the Prime Minister warned against 'analysis paralysis' and blindly committed $1.5 billion to the East West Link, all the while promising a cost-benefit analysis of projects worth or with expenditure more than $100 million. I note that $1 billion of these funds is for stage 2 of this project, before we have even seen plans for it, before we even know where the tunnel will be situated.

In the lead up to this November's Victorian election people in Melbourne are seeing a desperate state government clinging to a road to nowhere. At one level, that is apt symbolism of the Baillieu and Napthine administrations and why Victorian Labor is so well placed looking to November. The desperation of the Victorian government is one thing; the complicity of the Abbott government quite another. All the rhetoric about transparency and accountability before the election has been shown to be empty. In one sense we have moved on from the Howard-era roads of National Party importance. Here it is the Liberals being backed in with absent evidence and absent process. The height of this shameless politicking to the detriment of Melbourne's development is the commitment of $1 billion of Commonwealth funds to stage 2 of this project. It is really on the never-never. This alone nails the lie on the part of this government. On infrastructure investment they are incapable of placing the national interest before their political interests.

On to process, which should be straightforward. Proper process requires Infrastructure Australia to rank projects by benefit-cost ratio and other relevant subjective criteria prior to a government decision on which projects to fund. Not the other way around. Labor's amendments, which I will speak briefly to later, go to this matter and of course to the election commitments of the government. We propose, in essence, to hold them to their word, to help the Prime Minister, who was so determined just over a year ago to build confidence and trust in politics, do just that. It is pretty obvious he needs our help in this regard.

As the member for Grayndler, the shadow minister, has said, linking the need for a cost-benefit analysis to whether a project has received a level of prior Commonwealth funding commitment completely fails to understand the proper process that all major stakeholders are seeking. Linking cost-benefit analysis to a commitment of Commonwealth funding means that public transport projects like the Melbourne Metro and other urban rail projects will not be assessed when this proposed amendment is coupled with the federal government's policy of not funding public transport—an ideologically bizarre aberration that is condemning Australia's cities to congestion, reduced productivity and reduced liveability. More broadly, this notion of proper process seems entirely foreign to this government. Proper process is of course important so that we do not end up wasting vast sums of taxpayers' money on dud projects like the East West Link and so that we enable all asset classes—roads and public transport—to be assessed and their benefits reviewed transparently before significant government sums are invested.

Despite coalition claims that this bill delivers on pre-election commitments, it really does nothing of the sort. The bill before us simply makes doing a cost-benefit analysis for projects of more than $100 million a mere 'function' of Infrastructure Australia, not a requirement as was promised. This is more coalition sleight of hand, another deception—you might even say it is mean and tricky. It is not clear from the bill what will determine the exercise of this function. This is an important matter. Can the minister explain why the language used in the legislation is not more compelling if the government is genuinely concerned to see cost-benefit analysis conducted and made available—and to see it form the foundation of significant infrastructure investments? Until this important question of form and function is addressed, this bill does not and indeed cannot rectify the coalition's broken promise.

Deputy Speaker Mitchell, as your neighbour and as the member for Scullin, an outer suburban electorate experiencing significant population growth at the moment, I am particularly concerned to see infrastructure delivered based on need—transparently and accountably. Since I have been in this place I have taken, and I will take, every opportunity to speak on these issues on behalf of my constituents and indeed on behalf of your constituents just down the road—or just down the railway, as we would hope, as well. The communities I represent are deeply and rightly concerned that transport infrastructure has not kept pace with growth. The 'Access Denied' campaign being conducted by the City of Whittlesea speaks to this. It prioritised the O'Hern's Road interchange, a project supported by the former Labor government, and the extension of the South Morang rail line, a project likewise supported by Labor in government. These are projects I am a passionate advocate for.

But these are only two examples of the pressing need in outer suburban communities for better transport infrastructure. In relation to the rail extension, there is an obvious point to be emphasised: due to the Prime Minister's bizarre ideological fixations, we cannot see public transport brought into the infrastructure equation—a matter compounded by the form of this legislation. As city theorists talk about agglomeration and as people in Scullin experience the reality of living in the suburbs at a time when jobs are increasingly located in and around the CBD—I commend the work the Grattan Institute have recently done on where productivity is taking place in our cities, particularly in Melbourne and Sydney—how can we not regard boosting our public transport capacity as a central plank of meeting our infrastructure and productivity challenges, not to mention our liveability and sustainability challenges?

Of course this conversation is not solely about Scullin; these questions of infrastructure delivery and urban Australia are about all of our major cities. When we make better cities, we enable better lives for the four out of five Australians who live and work in our urban communities. Sadly but obviously, however, when our national government neglects these people, these four out of five Australians, the reverse is true—as the experience of the past 12 months shows us. The government which on day 1 shut down the Major Cities Unit has carried on just as it began. While modern Labor, under the Whitlam, Hawke-Keating and Rudd-Gillard governments, has built our cities, successive conservative administrations have turned their backs on them.

This is a critical aspect of this debate. Our cities are prized national assets. Getting greater productivity out of our big cities is vital to Australia's future. Recent work by the Grattan Institute that I previously mentioned has highlighted the fact that our cities are real engines of economic innovation, central to maintaining national living standards—the places where three-quarters of jobs are located and 80 per cent of GDP is generated. I note a particularly interesting and challenging speech given by Jennifer Westacott, the CEO of the Business Council of Australia, on 30 July this year. She set out the importance of having a cities policy and a national conversation about cities, in particular about infrastructure and taking a hard look at cost-benefit analysis—how it should be framed and what we do with it. It is an address I commend to all members of the House. I think all members opposite would take some learnings from it. It is clearly not a partisan contribution. How prudent is it to ignore the challenges presented by congestion, to deny the imperative of working to better connect people with opportunities—jobs, for sure, but also those other elements of living decent, dignified lives?

That The Economist Intelligence Unit has again crowned Melbourne the world's most liveable city is both a source of pride for Melburnians and simultaneously a wake-up call for all of us, because Melbourne today is at risk of fragmenting into two cities—a prosperous core and an outer half with much lesser opportunities. With proposals rigorously assessed and costed by Infrastructure Australia—back when it was a genuinely independent agency—Labor governments saw targeted investments made in urban roads and public transport in support of the national interest and in support of the aspirations and needs of many suburban families. These investments continue to be of vital importance. In fact, this a growing issue as urbanisation continues, especially as outer suburban Australia rapidly expands in population but not in numbers of jobs located there.

As the shadow minister has set out, Labor has proposed significant and vital amendments to this bill. These amendments are to clarify that the references to '$100 million' are to project capital cost rather than Commonwealth funding alone; to require that payments for projects over $100 million in value under the Land Transport Infrastructure Act can only be made after Infrastructure Australia has published its evaluation—that is, to assess first and fund later, not the other way around; to require IA to approve a standard method for preparing cost-benefit analyses; and to strengthen transparency and public disclosure of project assessments. In essence, as I said at the start, Labor is trying to help the coalition to do the right thing by the people of Australia by ensuring funding is directed towards need and not directed by political calculations. In the lead up to the last federal election, the coalition promised to:

… ensure better infrastructure planning, more rigorous and transparent assessments of taxpayer-funded projects, and develop a much firmer and clearer infrastructure plan for Australia's future.

However, as I and others on this side of the House have repeatedly said during debates on successive infrastructure bills, the government has refused to increase transparency about how infrastructure projects are evaluated and which ones are funded. In fact, this government has sought to do the opposite. It seeks to concentrate even more power with the minister, harking back to the bad old days of regional rorts. The Australian taxpayers deserve better than this, Australian cities need better than this and Australia's productivity requires better than this. Australia's infrastructure needs are best met through independent and transparent decision making with a long-term focus. This is what Labor's amendments do and I encourage those opposite to support them.

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