Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

It is my pleasure to speak on these two bills, the Asset Recycling Fund Bill 2014 and the Asset Recycling Fund (Consequential Amendments) Bill 2014 and follow a large number of colleagues who have spoken through the course of yesterday on this important initiative within the budget. This of course was announced on budget night and the relevant bills were introduced by the Parliamentary Secretary to the Treasurer, the member for Moncrieff, on 29 May. Importantly, as previous speakers have outlined, they provide for an asset recycling fund as part of the government's infrastructure package announced in the budget—some $5.9 billion at the commencement, comprising from $2.4 billion of uncommitted funds from the Building Australia Fund and $3.5 billion from the Education Investment Fund.

As the parliamentary secretary outlined, this important initiative will support the recycling of infrastructure. It is an important principle. Where government owns an asset, if it is best that that be sold, be privatised, in order for the purchase of other key assets—namely, infrastructure—it makes perfect sense. We need to upgrade infrastructure, particularly throughout the states. What this fund will do is provide incentives of 15 per cent of the sale price of assets to give the states and territories an immediate benefit, as the parliamentary secretary pointed out, to recycle their capital investments.

I want to spend a bit of time on a number of aspects of this. Yesterday we saw the shadow minister, the member for Grayndler, railing against a number of aspects of this approach and announcing that the opposition would be moving a series of amendments, which clearly are designed to duplicate and complicate this process. The reason for that is that certainly in the case of the shadow minister and many members opposite in their heart of hearts they remain opposed to privatisation. To be clear, the member for Grayndler said yesterday in this House:

I am neither for or against privatisation full stop, but it must be considered on a case-by-case basis. Sometimes it might be appropriate to sell a public asset—

And on he went. I am the first to concede that he did say that. Many would say that I should take him at face value. But, given the track record of the member for Grayndler, I do not.

The truth is that, while the Hawke and Keating governments have a proud record of privatisation—privatising airlines and the Commonwealth Bank in two tranches—those opposite have never acted in that tradition. The Howard government faced total opposition from those opposite in the privatisation of Telstra, and many members-and I say exhibit 1 is the member for Grayndler—had their fingers crossed behind their back, at best, during the Hawke and Keating governments. In the case of the member for Grayndler, when he says, 'I am neither for or against privatisation full stop … it needs to be considered on a case-by-case basis,' the problem is that he has never thought of a case where it might apply.

If we go back to Hawke and Keating governments and actually look at the Commonwealth Bank and look at the record of the member for Grayndler himself, we see that back in 1995, just before he entered this place as a senior member of the left on the retirement of Brian Howe, he was interviewed on ABC radio and he outright opposed the privatisation of the Commonwealth Bank. Let me quote him:

I think in spite of that, I guess there is substantial disillusionment when you can have something such as the privatisation of the Commonwealth Bank without the Left making a statement in opposition to that. And I think that there's considerable disillusionment amongst the rank and file of the party, not just the Left, but I think it crosses the factions.

He went on:

Oh, I think that there is perhaps a view at a rank and file level that the Left does have to be a bit more vocal, that the Left does have to differentiate its political perspective from the views of the Government at a time when it's necessary, whether it be the Commonwealth Bank—

And then he goes on with a number of other issues.

Let us be clear about this: the member for Grayndler, if he had his way, would still have the Commonwealth Bank in government hands. Think of that: in 2014 the member for Grayndler would have the federal government owning a bank. I have not had the time to go back and see what he said at the time of the privatisation of government owned airlines, but I think he would have had a consistent position back then of opposing that as well. He certainly opposed the privatisation of Telstra. And that is really what is driving those opposite. If we look to the asset recycling initiative, which is designed to give an incentive to the states to sell assets and to purchase new infrastructure that will build their economies and build the national economy, you only have to look to his home state of New South Wales, where Labor governments, particularly under Morris Iemma, sought to privatise their electricity assets. That was opposed by the Left vigorously, opposed by the current leader of the opposition up there in New South Wales.

And what has been the end result of that long period of opposition by the Left of the Labor Party to privatisation? It has been that the asset has diminished in value, the public has lost the opportunity it would have once had to get greater value and even better infrastructure. That is the approach of the shadow minister opposite when it comes to privatisation. Yesterday he and a number of other speakers took a lot of time to lecture the government on proper processes with respect to infrastructure.

Mr Craig Kelly interjecting—

It was a bit rich, as my colleague interjects in support. Regarding proper processes on infrastructure, all of us on this side of the House can cite the big national projects for which they had no process. The process for the commitment on the NBN was done on the back of a beer coaster on a VIP flight. But in each of our electorates, particularly in the lead-up to the last election, we saw an incredible lack of process. I am going to take the time of the House—it is fortuitous that you are in the chair, Mr Deputy Speaker Mitchell, and I make no accusations against you—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

You'd want to be careful!

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

but your electorate will certainly—

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I'd focus on Deputy Speaker Mitchell!

Tony Smith (Casey, Liberal Party) Share this | Link to this | Hansard source

It is good to have the member for Fraser back there at the table. He carries a lot of luggage with him these days; he has to carry his books around wherever he goes. But getting back to asset recycling and processes on infrastructure spending from those opposite: I have often said that they have an unembarrassable quality about them. When it came to local infrastructure, as we all saw in our electorates, here is a case of what those opposite consider to be proper process. In the lead-up to the last election the then minister for regional Australia, the member for Ballarat, visited the Yarra Valley, in June of last year, and announced funding for three projects: a tourist railway in the heart of the electorate of Casey to the tune of $3.5 million; an initiative in the electorate of McEwen; and a swimming pool in the electorate of Deakin. They were all announced on the one day. But guess what had happened by the time the writs were issued some months later? It transpired that the minister had signed off with great haste on the funding announcements in the electorates of McEwen and Deakin but went on strike, refused to sign off on the initiative in the electorate of Casey. It fell to us to make that pledge that we would honour what those opposite had promised but failed to deliver—and I am pleased to say that we have.

Now, that story is typical of what went on in the dying days of the Gillard and Rudd government when it came to process on infrastructure funding. Those opposite are in no position to lecture anybody on proper process when it comes to infrastructure funding or, as many speakers on this side of the House have pointed out during the course of this debate, on processes for so many of the programs that they undertook, be they school halls or pink batts. The shadow minister, when he was minister, had a lot of advice, including from the Infrastructure Finance Working Group back in April 2012. At that time they made the very point about the importance of asset recycling. They had this to say:

Infrastructure Australia is already looking at ways to encourage the sale and recycling of government owned infrastructure to fund new projects. The Australian Government should continue to work with State and Territory governments in assessing potential assets for sale and opportunities for better use of existing assets, for example, through pricing of asset use.

And on it went. It put that principle to him time and time again.

But of course the shadow minister cannot say he is in favour of this initiative wholeheartedly, because he cannot think of an asset he would be prepared to sell. As we have seen, he was opposed to the sale of the Commonwealth Bank. I set this challenge for those opposite: I would like the shadow minister to come out in support of one privatisation that has occurred—just one. We know he opposed the sale of the Commonwealth Bank. I am very happy to say that, if the shadow minister believes that the Australian government in 2014 should own a bank, it is very difficult to think of one privatisation in the Hawke-Keating era that he would have supported. It is very difficult to think of a single privatisation that he would support today. He comes in here and talks the talk, but his record speaks for itself. That record shows that, while those opposite like to bask in the Hawke-Keating tradition, very few of them believed in it. The shadow minister and member for Grayndler is exhibit A on that front.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

by leave—Last night I was speaking about the distinction between a market economy and a market society, arguing that those opposite believe in a market society in which they have a theological support for privatisation across the board. We on this side believe in a market economy. We have a pragmatic attitude to markets and privatisations, which is that we should take things on a case-by-case basis, analysing each decision on its merits and deciding whether it is in the interests of the Australian people.

There are a number of issues that are important in considering the Asset Recycling Initiative. One of these is an issue that was raised by Flavio Menezes in a piece for The Conversation in which he noted that:

The key issue is that most projects in the top two highest priority lists, adding up to over $A25 billion, are either road extensions and upgrades, or urban railways or busways. While worthwhile, these projects will not be suited for a capital recycling program until a comprehensive user pays system is in place. In fact, there are only two projects in those lists that would fit well into a capital recycling program, namely the Oakajee Port (A$5.4 billion) and the Darwin East Arm Port Expansion (A$336 million). This is well short of the revenue that may be raised by asset sales and so recycling of capital would not be very effective.

He concluded:

This means that capital recycling, while a potentially worthwhile concept in a world where governments cannot borrow directly, will be at best one additional tool for funding infrastructure. At worst, the proceeds from the sale of assets will be spent to ensure future electoral support, on projects that would not pass a cost-benefit test.

That is a concern of this side of the House. While Labor had a strong process in place for Infrastructure Australia to ensure projects were scrutinised based on their cost-benefit ratio, those opposite seem to want to return to the days of National Party pork-barrelling, the days of Roads to Recovery, where careful analysis by journalists, including Mark Davis, and an economic paper that I did showed very clearly that there was a partisan skew to the Roads to Recovery funding. It was not funding based on the highest cost-benefit ratio; it was funding based on the highest political pay-off.

We see this ideology replacing evidence again in the case of this government opposing investment in urban rail projects. Even though urban rail projects have a high pay-off and even though commuting times in Australia's cities are too high and one of the best ways of reducing them is through better public transport, this government has stepped back out of investment in urban rail. We on this side of the House have a proud record in urban rail. The Rudd and Gillard governments invested more in urban public transport during our six years than every other government back to Federation combined. We call on this government to put evidence ahead of ideology and to back important urban rail projects.

It is also important to note where the resources are coming from to provide the initial contribution for the Asset Recycling Fund. The initial contribution of $5.9 billion will be funded by $2.4 billion ripped out of the Building Australia Fund and $3.5 billion ripped out of the Education Investment Fund. The Education Investment Fund was established to provide funding for projects to create or develop significant infrastructure in higher education research and vocational education and training institutions. The abolition of the Education Investment Fund raises big questions about this government's commitment to the long-term, sustainable funding of infrastructure for the teaching and research of Australia's public universities.

It is now clear that the Asset Recycling Fund will not allow for investment in research infrastructure, which means that 59 per cent of the seed funding from this Asset Recycling Fund will come from investment that might otherwise have gone into education. As the Australian Technology Network of Universities has noted:

EIF funding has been used to develop new research and education infrastructure across universities, VET institutions, research centres and institutes and the CSIRO (pertaining to the SKA). The provision of modern research capabilities comes at a cost. To date 71 infrastructure projects have been funded by EIF to the sum of $2.4 billion. This included $643m in funding for pure research infrastructure—not including funding for dual purpose teaching/research infrastructure across a wide range of fields including Medical Research, Science and Engineering since 2008.

If the Education Investment Fund is abolished without any replacement, our fear is that Australia's research performance will suffer.

The Treasurer has spoken about his desire to have more Australian universities ranked among the best universities in the world. Those are fine words but they are not matched by actions. The actions of this government are: ripping money out of research; shutting down the Education Investment Fund; not having a minister for science; ripping 1,000 jobs out of the CSIRO; and showing a general disregard for experts across the spectrum, whether they be expert bodies like CAMAC, experts from the charities commission or experts on climate change. This government appears not to have ever seen an expert body that it did not want to shut down or stymie.

Labor has a proud record on infrastructure. When we came to office in 2007 Australia was ranked 20th in the OECD for our investment in infrastructure. In our final two years in office Australia was ranked No. 1. We were well outside contention in the OECD but we had the gold medal in our final two years in office.

That investment in infrastructure by Labor was carried out based on the best evidence, and our concern about this bill is that it will not be based on the best evidence. It will not be based on sound science and expert advice, and it will encourage privatisations in instances in which those privatisations are not in the best interests of Australians.

The Kennett government lost office in 1999 due in large part to its theological belief that privatisation was always better. The Howard government's approach that if you could find it in the White Pages then government should not do it was, I think, found in many cases to have cost the taxpayer more. A theological belief in privatisation does not serve the Australian people well. A pragmatic analysis of privatisation on a case-by-case basis is what Australians deserve and the risk of the 15 per cent incentive is that they will not get that pragmatic approach from this bill.

We support education infrastructure and we are concerned about the money being taken out of that. We support transport infrastructure but we believe that there are smarter ways of investing in transport infrastructure than this bill.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise and speak on the Asset Recycling Fund Bill 2014 because this bill, and what is delivered in this bill, is part of the four pillars of commitment that the coalition gave before the last election. I would like to go through what those four pillars were.

The first was to stop the boats, the second was to repeal the carbon tax, the third was to repair the budget and the fourth was to build the roads and the infrastructure of the 21st century. So let us have a quick look at how we have actually gone so far on those four pillars of commitment.

Stop the boats: I remember before the last election that we were continually told that this could not be done. It was all too hard. Well, today we have marked the milestone of six months without a single unauthorised boat arriving on Australian territory. Six months without one single boat—this has saved the taxpayer $2 billion and also we have not had one single life lost, which is more important.

I note that the Minister for Immigration is at the table, and I think the whole country should congratulate him on the strong stand that he has taken. They said he could not do it, he has proven them wrong and the public—every Australian citizen today—should be thanking the Minister for Immigration for that enormous achievement of six months without one single boat arriving.

The second commitment was to repeal the carbon tax. Again, I remember sitting on the other side of the chamber during the last parliament and good old Mr Combet, then the Minister for Climate Change, said that it would not and could not be done. We could not repeal the carbon tax and we would not repeal the carbon tax. We know that a few days before the previous election that we were told by the then Labor government that the carbon tax was terminated.

Now we get to where we were successful in winning the election: we came into parliament and the very first order of business was legislation to repeal the carbon tax. It was passed by the House of Representatives but over in that other place called the Senate, the Labor Party, holding hands with the Greens, continue to block it. So we are hopeful that with the change of the Senate come 1 July that we will see that second pillar of our commitment fulfilled to the Australian people.

The third pillar was to repair the budget. Again, we have an opposition in complete denial that there is a crisis. They have been running around saying, 'Oh, there's no problem. The budget doesn't need to be repaired. Just let's keep on spending.' This week, John Edwards, the Reserve Bank of Australia board member, put that dangerous delusion to sleep. John Edwards was appointed by the former Labor government in 2007 to sit on the Reserve Bank board. He was actually also a former adviser to the Keating Labor government. He said, 'I have no doubt there is a budget crisis.' Remember, this is a former Labor adviser—a board member of the Reserve Bank, confirming that there is no doubt there is a budget crisis. He continued:

We're accumulating debt as a higher share of GDP and of course in absolute terms, (it's) absolutely astronomical …

Surely the time has come that this dangerous denial that we have to deal with the budget crisis is put to bed?

Then we come to what this bill relates to: the fourth pillar of our commitment which is to build the roads and the infrastructure of the 21st century. It is interesting to see the approach of the previous Labor government in their six years and how they have left us with such a substantial infrastructure deficit. I well remember an example of Labor's approach to infrastructure. Just before the 2010 election, we had the then Prime Minister, Ms Gillard, and the then New South Wales Labor Premier, Ms Keneally, heading out to Western Sydney and making a grand announcement of the promised Parramatta to Epping Rail Link.

It seems that much of this has disappeared down a memory hole, but I was able to find a media release about it from the former member for Bennelong, Ms McKew. There is a picture of the former member for Bennelong and in the same photo there is the current member for Grayndler, the current shadow minister for infrastructure. He is looking very sheepish in this photo. The media release says:

A re-elected Gillard Labor Government in partnership with the NSW Government will build the Parramatta to Epping Rail Link, a clear missing link in Sydney’s rail network.

It continues:

This is an important and affordable investment. We will deliver this commitment consistent with our strict fiscal rules, which will see the budget returned to surplus in three years, three years early, and which will keep the budget in surplus over the medium term.

Absolute nonsense about the budget, absolute nonsense about the Epping rail link, simply grandstanding election promises, no commitment, all announcement, no delivery.

That is why this bill is important. It incentivises the states to get on and get that infrastructure that we need built to get our country moving and to clean up the mess that we have been left in so many different areas. The bill will make $5 billion available to the states where the federal government will actually pay the states and territories an extra 15 per cent of the sale price of any assets that they sell and recycle. That is the point. We want our state governments to get on with building that infrastructure. This is what incentivises them. This is exactly what the federal government should be doing.

I heard the member for Fraser. I know he would prefer to have some giant centralised department here in Canberra full of bureaucrats deciding what and where the states should spend on their infrastructure, but that is not the approach the coalition takes. It is a fundamental difference between our two sides. We in the coalition believe that decisions are best made by those working closest to the coalface. In contrast, we know the opposition believe in centralised, bureaucratic decision making.

The member for Fraser also referred to experts. So many times in infrastructure planning we have seen the so-called 'experts' get it hopelessly wrong. We have seen that with the Lane Cove tunnel in Sydney, the Clem Jones tunnel in Brisbane and, of course, the cross-city rail link—even the Sydney Airport link. All the forecasts of the so-called 'experts' were hopelessly wrong time after time after time. This is why the states are in a much better position to make these decisions. They are closer on the ground than some bureaucrat here in Canberra. This is why providing that 15 per cent incentive will get them moving and get that infrastructure that this country desperately needs built as quickly as possible.

I would also like to comment on a few comments that were made by the shadow minister for infrastructure and member for Grayndler in this debate. He said:

We planned and funded the Moorebank Intermodal Terminal, delivering major productivity gains to Sydney and taking 3,300 trucks off the road every day …

This statement is a complete and utter furphy. It is completely misguided. It fails to understand the complete distribution chain. It is a mistake that has already cost the Commonwealth over $100 million and will potentially cost the Commonwealth a lot more.

First you must understand the concept of the distribution of goods via either an intermodal or the standard truck. When a container arrives at Sydney port, it can go on a truck. The truck then goes to the warehouse, the container is unpacked and the trucks returns to a container yard to eventually go back to a port. With an intermodal concept, at the port, instead of going on the back of a truck, the container goes on a train. It then goes on a rail link through Sydney, gets unloaded from that train and then goes on a truck, and then that truck takes it to its distribution point. Unless you are unpacking those containers and pouring the goods in a big hole somewhere in the Moorebank intermodal, you are not taking a single truck off the road at all. You do not have a rail siding at every warehouse door. You still need to get the goods from the intermodal to the warehouse via truck. At the very best, you are potentially maybe reducing the travel time and distance those trucks will need to travel to get to their warehouse destination. No trucks are taken off the road.

The concept of the Moorebank intermodal seems to be 'build it and they will come'. The question is: which companies will actually use the Moorebank intermodal? The MooreBank Intermodal Company have actually produced a map showing import destinations. To be honest, this is potentially very misleading. If anyone looks at this map, it looks as if there is this huge market in south-western Sydney for containers—nice big orange and grown colourings on the map. If you actually break it down, go in and look at where the containers currently go, which should be the first question you ask, there is simply no market around Moorebank for these containers to go to. There is one market based around Enfield, but we already have an intermodal due to open there at the end of this year, so that zone around Enfield will not be serviced by the Moorebank intermodal. We have another zone south of Sydney in the Campbelltown area, but we already have an intermodal there, so the Moorebank intermodal will not service that area. And there is currently no volume whatsoever around that Liverpool-Chipping Norton-Moorebank area. The actual target market appears to be a market 25 kilometres to the north around Eastern Creek.

Because of the money the coalition government is investing with WestConnex and the duplication of the M5 east, this will simply make the Moorebank proposal to put an intermodal at Moorebank completely redundant. If I am an importer based out of Eastern Creek, I can get my container from the port and put it on the new WestConnex connection with a couple of traffic lights and be straight there. Why on earth would I want to put my container instead on a rail, ship it all the way around on the Southern Sydney freight line, get it off at Moorebank, unload it at Moorebank, put it on the back of my truck at Moorebank and then go up through the Hume Highway, one of the worst black spots in the entire country, through 20 to 30 sets of traffic lights to get my container up there?

It simply will not work.

If the private sector wish to go ahead and invest money in this, good luck to them. But this will be a white elephant. I know the local residents of Moorebank have great concern about the additional number of trucks forecast to come from this intermodal terminal. But I do not believe it will actually happen, because it will not be serviced. It is not a matter of, 'build it and they will come'. They could build this intermodal at Moorebank, but companies, importers, simply will not use it when we get our roads fixed up in Sydney, which is exactly what this coalition is doing with the WestConnex project, with roads around the new Badgerys Creek airport and with the duplication of the M5 East. We will have a much more efficient road network and we will not need to have an inefficient double-handling system of sending shipping containers around Sydney via rail and then putting them on a truck and sending them to their further destination.

We also need to consider the cost of the 270 hectares of land at Moorebank. When the Moorebank Intermodal Company negotiates with private companies to finalise this deal, we cannot give this land away. It is 270 hectares of very, very valuable land. We must make sure that, if we are going to hand this land over to the private sector, the taxpayer gets full value for it. I am convinced that any intermodal terminal built at Moorebank will be a complete white elephant.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

Infrastructure investment is what allows Australians to attend world-class schools, be treated in world-class hospitals and get to their places of business on world-class roads and railways. It is crucial for our nation's productivity and our cities' liveability. It is only by investing in infrastructure that Australia can grow in a fair and prosperous way. But funds for infrastructure investment are limited, and each infrastructure investment comes with an opportunity cost. So we must ensure that decisions made about what to fund and what projects to allocate federal funding to are given the careful consideration that they deserve. We must ensure that political interest does not trump the public interest in the allocation of funds.

The previous Labor government believed strongly in investment in infrastructure in the public interest. Under Labor, infrastructure investment was lifted to record levels. In this period, Australia's infrastructure spending as a proportion of GDP rose from 20th in the OECD to first. But Labor was aware that, even with this increase in funding, not all proposed projects could be funded. It knew that, in making decisions about which project to fund, it was essential to have an independent body recommending which projects received these limited funds. That is why it linked funds that allocated money for projects to independent agency recommendations. The two funds in the bills under consideration—the Building Australia Fund and the Education Investment Fund—were both linked to such assessment bodies. These assessment bodies ensured that relevant projects met the appropriate criteria before they were allocated funding. This sorted the wheat from the chaff, meaning that only projects with a robust business case were able to get through and win Commonwealth funding. It cut the pork and focused investment on productivity-driving infrastructure.

Unfortunately, the Abbott government's actions in seeking independent analysis of their funding of infrastructure projects has so far not met their pre-election rhetoric. The bills under consideration consolidate funds from the Building Australia Fund and the Education Investment Fund into a new fund, the Asset Recycling Fund. This fund, however, has no requirement for projects to be assessed before funding is allocated. There is a general requirement in the bills that projects that are funded through the Asset Recycling Fund are 'productivity enhancing'. But no independent agency is specified in the bill to determine whether this crucial criterion has been met. Indeed, when asked who would make this assessment, the Treasurer responded, 'We will, through the Treasury, and we will form an opinion on it.' So the critical arbiter of whether the Treasurer's proposed project is 'productivity enhancing' will in fact be the Treasurer—a Treasurer with National Party MPs and Liberal Party marginal seat holders whispering in his ear and next to no external accountability on ultimate decision making.

This is why Labor is seeking to move an amendment that requires all projects funded out of the Asset Recycling Fund to be subject to assessment by Infrastructure Australia. The independent assessment will make sure that all projects receiving Commonwealth funding will really address Australia's infrastructure needs. Labor will also seek an amendment that will require the tabling of a disallowable instrument for each privatisation and funding transaction. This will allow privatisations to receive parliamentary scrutiny and will hold the federal government accountable for the actions taken by state governments as a result of this bill. Without these amendments, there is a real risk that key state assets, such as our hospitals and our roads, could be privatised to bankroll partisan, poorly thought out pork-barrelling projects.

A key example of such a project is Melbourne's East West Link, stages 1 and 2. East West Link is a project that has undergone virtually no independent assessment. There are no public figures for how much the road will cost to build and no figures for how high the tolls will need to be for the private companies involved in this project to recoup their investment. No detailed evaluation of the project or cost-benefit analysis has been fully published. The Acting Infrastructure Coordinator of Infrastructure Australia, John Fitzgerald, told a Senate committee that, even three weeks ago, a full business case had not been seen by Infrastructure Australia. Mr Mike Mrdak, Secretary of the Department of Infrastructure and Regional Development, tried to claim that the business case for Infrastructure Australia had been seen and was 'reasonably complete'. But, when questioned about what details had been provided to Infrastructure Australia about East West link stage 1, Mr Mrdak admitted:

I think Victoria are now reviewing in the light of what they are doing in terms of some of the planning issues and also the procurement issues which are now underway.

It is hard to believe that an infrastructure business case without a concrete planning proposal and procurement details is 'reasonably complete'. Even an unpublished assessment by the Victorian government that was leaked to the Melbourne media suggested the project will be a dud, returning, under a conventional assessment of the project's costs and benefits, just 80 cents for every dollar spent. This lack of preparation may explain why the East West Link tunnel has been so vociferously opposed by community groups in Victoria, why more than $5 million has been spent by the Linking Melbourne Authority to guard the project against protesters, and why even now the project is tied up in Supreme Court litigation.

Stage 2 of the project, largely in my electorate in Melbourne's west, is even less progressed than stage 1. At this stage it is not even a line on a map. No land has been allocated for it, there have been no land reservations, no environmental assessments have been done, no drilling or testing of the land has been undertaken, and no community consultation about the project has occurred. We do not know where the proposed tunnel is going to go, where the entries and exits to the tunnel will be, or even where it will cross the Maribyrnong River—by the Premier's own admission. We do not know how much traffic it will displace or divert, how many residential properties will be acquired to build the road, or what areas of Melbourne west will be most significantly affected by the construction. For the benefit of the House, I would note that this is a project that is intended to run not only through industrial areas in my electorate, but also through a number of well-established and densely populated residential suburbs.

The Acting Infrastructure Coordinator of Infrastructure Australia, John Fitzgerald, recently admitted that, although some discussions had taken place, 'there is significantly more information that we require for it to be a full business case'. He described the material currently under consideration for Stage 2 as being in the 'conceptual' stages. Yet this did not prevent the Abbott government from pledging $1.5 billion to fund stage 2 of the East West Link—$1.5 billion for a back-of-the-envelope proposal, $1.5 billion for a project that is not even listed on Infrastructure Australia's priorities list from December 2013, $1.5 billion for a project with plans so utterly lacking in detail that, according to Victorian Premier Dennis Napthine, it may 'possibly' include viaducts, it may 'possibly' include bridges and a tunnel, and it may 'possibly' include surface freeways. They have no idea.

These are plans for a road that will potentially pass through the residential suburbs of Footscray and West Footscray in my electorate. Families in these areas deserve to know the impact this project would have on their homes and on their community, but the funding for this project has been guaranteed by the Abbott government without even a modicum of community consultation. Moreover, Premier Dennis Napthine has suggested that he would like to start work in late 2015, meaning that the Napthine government 'is going to get its skates on'. With such an accelerated timeframe, it is unlikely the project will get the full community consultation it requires.

The first billion dollars of funding will be allocated towards the project in the next six weeks. By 30 June, $1 billion of Australian taxpayers' money will be placed in a fund for a road that will not even be ready to receive environmental approval until 2015-16. Yet it is the government's intention that stages 1 and 2 of the East West Link will receive federal funding from the Asset Recycling Fund. Indeed, the Prime Minister was 'very pleased' to announce the funding at a press conference held at the end of May. He stated 'we are very, very confident that this is a worthwhile investment by the Commonwealth at this time.' But I would ask how on earth he would know that. Indeed, it is one of the key projects being funded by the Asset Recycling Fund, as the Abbott government has now committed $3 billion to the project. Of course, when the Abbott government talks about a $3 billion commitment, this money does not magically appear from unused budget funds. This is $3 billion ripped from previous infrastructure projects around the country, including, most disappointingly for the commuters in my electorate, the $3 billion committed by the previous Labor government to the Melbourne Metro rail project.

The Prime Minister likes to tout himself as 'the infrastructure Prime Minister', but the reality is that he is the 'infrastructure Frankenstein', stitching his policy and funding together by stealing funds from a series of previous Labor projects. It is just another of the Abbott government's fibs to claim that anything contained in the bills under consideration is new money to be spent on infrastructure. What these bills do demonstrate, though, is that the Abbott government only believes in one sort of transport—roads. That is why all funding for urban rail investment was cancelled in this year's budget. This is despite the fact that, early in its term, the Abbott government launched a Productivity Commission inquiry into infrastructure investment. This inquiry was needed due to the failing return on investment for private roads and tunnels. Indeed, economic geography professor Brent Flyberg has found that up to 50 per cent of traffic forecasts misjudge traffic flows by more than 20 per cent. Inflated estimates lead to significant losses when actual traffic falls below predicted traffic by a significant margin. This was certainly the case with the Brisbane Airport Link, where forecasts predicted 135,000 vehicles a day would use the toll road. Once built, however, the road was used by only 45,000 vehicles a day. When projects are only receiving one-third of their expected returns, it is understandable that investors begin to get cold feet.

It is not rocket science to conclude, then, that the best asset for road investment is the requirement for a detailed business case before the project receives Commonwealth funding. Yet this is the one step in the process that the Abbott government seems determined to erase. To add insult to injury, this is a bill that contains an investment system primarily tilted towards private investment. Under the Asset Recycling Initiative, states and territories will be eligible to receive a federally funded 15 per cent incentive payment when appropriate public assets are sold and funds reinvested into new 'productivity-enhancing capital assets'. In real terms, this means that, if a state government sells a road and uses the funds to buy another one, they will receive 15 per cent of the road's funding from the federal government. However, one unavoidable result of this structure is that there will be a significant increase in the privatisation of Australia's publicly owned infrastructure. Further, the bill could very well decrease the amount of federal government project infrastructure funding that projects will receive, as it only guarantees that 15 per cent of the cost of these projects will come from federal funding. In the past the federal government has often provided up to 50 per cent of funding for our infrastructure projects. This shortfall in funding for infrastructure will have to be made up for by the states in funding substandard, or shoddily planned, infrastructure alternatives—and where the Commonwealth government refuses to provide any funding for these projects at all, this situation will become dire.

Nowhere is this clearer than with Premier Napthine's new and less-than-improved version of the Melbourne Metro rail project. Once the Abbott government indicated they were not willing to fund any part of the impeccably credentialled Melbourne metropolitan rail project, the Napthine government felt they had to come up with a more affordable alternative that they could fund themselves. The alternative proposed by Premier Napthine is a city tunnel that does not go into the city, does not service the majority of Melbourne's commuters, and calls the station next to the casino by the name of 'Fisherman's Bend'. It is a compromise project that was cobbled together when the Abbott government shut its doors in Dennis Napthine's face during the last election campaign, and it is not what the commuters of Melbourne, particularly the commuters of Melbourne's west, need or want.

The previous Labor government had an outstanding record of investment in urban rail projects. The last Labor government committed more to urban rail infrastructure investment than all previous governments in Australia running back to Federation combined. More than $13 billion was committed to urban rail projects—substantial nation building investment. But the bills under consideration are a depressing shift in government policy from rail to roads, a shift from detailed design and construction to big projects with little detail, a shift from independent support, oversight, scrutiny and accountability to partisan whim. It is another policy from a government with a lack of ideas and a rigid adherence to roads, roads, roads—an ideological obsession with roads, roads, roads. It is a government that cannot translate a three-word policy into a comprehensive infrastructure plan for Australia.

Under this Abbott government we will see metropolitan rail systems across the country become more crowded, more creaky and more inefficient. We will see the residents of Melbourne's west saddled with a project they did not ask for, that their opinions were not sought on, before the creators gleefully announce $1 billion worth of funding. We will see projects chosen by whoever has the Treasurer's ear rather than the independent infrastructure experts of Australia. The commuters of Australia did not vote for this and they do not want it.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

On any objective analysis, public assets that have been built up using public funds and public toil will deliver a better return for the public if they remain in public hands. There is a very strong principled and political argument to say that, when you have electricity networks, public transport networks and road networks that have been built up for the common benefit over generations by the public, it should be the public that holds onto them and gets the benefit of them.

But, more importantly, any sensible economic analysis also shows that the public and consumers benefit from public assets remaining in public hands. There is a very simple reason for that. If you sell something off to the private sector, they will want to make a profit out of it. When they make a profit out of it, the costs get passed on to the public and the consumer, in the form of higher prices.

That has been the record in Victoria—for example, with the electricity network. What has been made crystal clear in Victoria is that from the 1950s until the mid 1990s, following integration and public ownership, real electricity prices across the country actually fell. But then in Victoria, after privatisation and after the reforms to the National Electricity Market, prices increased sharply and the reliability of the network went down.

There are a number of reasons for that, and I will come to that a bit later in my speech. But the point is this: if economically there is no argument for rushing to sell off public assets, then you have to wonder what the motivation behind this bill is. What this bill effectively does is create a slush fund for the next two years to bribe state governments to sell off public assets as quickly as possible. This comes in the context, of course, of the federal government axing funds to state governments. So $80 billion comes out of health and education and we rip up agreements around health and the like. State governments find themselves increasingly cash strapped. The government does not deliver on Gonski funds for schools. Then it turns around and says, 'I'll tell you what, sunshine—if you sell your assets in the next two years, we'll give you a cash payment.' That is effectively the federal government bribing state governments to sell things off as quickly as possible.

Unfortunately, in Victoria, as I think is the case in New South Wales, we have state premiers and treasurers who are effectively the flying monkeys of this Prime Minister, who are prepared to go out and push the privatisation and toll roads agenda as quickly as possible. They are lining up for this fund to be established, because what the Liberal governments at the state level and at the federal level know is that the losers out of this will be the consumers, who will pay higher prices, but the winners will be the Liberal Party backers. You only have to look at who this Prime Minister appointed to his Commission of Audit and the large companies that they run to see who will benefit when public assets are sold off.

What we know, and what we have seen in Victoria over many years, is that when public assets are sold off they get sold off to the private sector, but the public—the taxpayer—bears the risk if the sale or the operation does not work out quite as planned. So you privatise the profits but you keep the losses in public hands. That is what we found in Victoria and that is what you find right across the country.

This bill makes no economic sense. The public is going to end up paying three times. Firstly, the public will lose an asset that in many cases generates returns for the community. So you lose the asset, and you only get to sell things off once. The idea that you balance the budget by selling off the farm is economic lunacy, because once you have sold it you do not get it back. You will get a short-term sugar hit, but after that you lose the recurrent income and you lose the asset forever. I do not know of many households who would decide that the best way to balance their weekly budget is to sell the home, but that is what this government is encouraging state governments to do.

You will lose the first time because you will lose the asset. The taxpayer will pay the second time because they will have to pay billions of dollars—money that will just go out the door to state governments. So you are paying to subsidise the state governments unnecessarily as well. You are going to lose the third time because, just as we found with electricity and just as we found with transport, it becomes more expensive. It is a massive cost-shifting exercise to make the public pay more so that the private sector gets higher profits and everyone loses out, except for big business and the financial funds that are bankrolling them.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

You're dead right.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

A report that everyone ought to read, titled Electricity privatisation in Australia: a record of failure, makes crystal clear why this is the case. Once you sell off something, you hand it over to someone who wants to make a profit—and that is fair enough; that is how the private sector works—but the consequence of it is that they will make the profit out of the public. That is the first point. What the private sector then do once they have got it—and we found this, and any objective analysis demonstrates it—is that, because they do not have an interest in investing in capital and maintaining it, they do what every company would do, which is to squeeze the maximum possible profit out of its asset. This means the network gets run down, which is why in Victoria we saw a massive spike in complaints from customers about quality and reliability. We also find that the rate of return from these companies is at Australia-wide highs. The result with the electricity network has been that the owners have made post-tax real rates of return at close to 10 per cent annually since 2006. So the profit is significant and, again, it comes on the back of the consumers.

The last thing—and this is significant—is the reason that prices go up when you privatise roads and you have to pay a toll every time you go on them or when you privatise your electricity network is that it costs a heck of a lot more for the private sector to borrow money to fund its operations than it does for the public sector. What this report found in the case of the electricity network—and I think the figures would broadly apply to transport as well—is that we have had a cost in privatised assets of almost 10 per cent per annum interest on the corporate owner's debt on electricity assets, which compares to government borrowings of closer to three per cent. What does this mean? It means something very simple. If you wanted to build an electricity network or a public transport network at the cheapest cost, you would say that the government should borrow to fund that investment. It would not add to net debt, because you have an asset there to back it up. Most people would say, 'Yes, let's borrow to fund something as long as we are funding a useful asset that is ours.' So you have a choice: should the government borrow at three per cent to fund the asset, or should we get the private sector to borrow at 10 per cent? When this Liberal government says, 'The answer is to hand it over to the private sector,' it is no wonder that electricity bills go up. It is no wonder that the cost of getting on the roads goes up. This is because it costs the private sector more to borrow. If we could get over this obsession with debt and say, 'If you have manageable debt set off against an asset that is there for the public good, it is a sensible thing to do,' the country would be much better off. Most households know this, because people understand that, yes, they are in debt, but it is called a 'mortgage'. They are paying off the cost of their house because they will have an asset there at the end of it. As long as it is manageable, it is okay. As long as there is something there at the end of it, it is okay. The government should adopt a similar approach.

But here we have a slush fund to create a privatised toll road—supposed nirvana—across Australia. It is going to come at the expense of public transport when we need to be investing in public transport, and it is going to come off the back of the public paying more and potentially going into more debt. This government is not getting rid of debt; it is just shifting it across to the public. It is shifting it across to the students in the form of student debt. You will now find with the higher prices here that the public is going to end up paying more. We clearly have an agenda from this government for a privatised toll road network across Australia and also an agenda to support its private backers, and it is all going to come at the expense of the public. This is why we will oppose the bill, and I will move an amendment to it shortly. But Labor now has the opportunity to join with us to kill this bill stone dead.

This is a two-year fund that will last for the duration of this government. If Labor wants to do its own thing, if it wins the next election, then let it; but it should join with us now to stop this legislation. As the member for Grayndler, the shadow spokesperson, said in his contribution:

This asset recycling initiative is a fancy-sounding name for privatisation of state assets and a reduction of Commonwealth spending on infrastructure.

…    …    …

The fund is an emblem for this government's political cowardice and lack of vision both when it comes to actual investment and to probity standards. The term 'asset recycling' is a different way of saying privatisation: the sale of existing public assets that are owned by the Australian people.

He is right, which is why the Greens will be opposing this bill. But I am not sure that he consulted with his Victorian opposition leader before putting this out, because the Victorian opposition leader, Daniel Andrews, who is going into an election at the end of this year, in his 'Project 10,000 trains, roads and jobs', which comes out under his signature, said:

Asset Recycling Process using the Victorian Transport Building Fund—

which is selling off the Port of Melbourne to fund some projects in Victoria. He continues:

In developing 'asset recycling' concept, Victorian Labor has closely monitored the progress of a similar program undertaken by the State Government in NSW.

He goes on to say:

Victorian Labor believes this approach is a common sense way to get things done without taking on unsustainable levels of debt or compromising investment in other important areas like health and education.

So which is it Labor? Is asset recycling cowardice and an ideological front, or is it your election policy in Victoria right now?

Labor will have an opportunity shortly to decide and to help kill this bill stone dead. To stop this short-term fund being established, which will only benefit this government, I move the following amendment to the motion that the bill be now read a second time:

That all words after “That” be omitted with a view to substituting the following words:

“the bill be withdrawn and redrafted so that it is renamed the Encouraging Privatisation Bill 2014 in order to better reflect:

(1) the true purpose of the bill; and

(2) that the bill aims to encourage state governments to sell off public assets as quickly as possible, in part to make up for the shortfall in Commonwealth funding to state governments arising out of the 2014 Federal Budget.”

We now have a golden opportunity to stop this toll road slush fund stone cold dead, and to put the final nail in the coffin of Prime Minister Tony Abbott's privatisation agenda. Very shortly, in a matter of minutes, and then again in the Senate, probably in a matter of days, the question will be where does Labor stand—is asset recycling, as the member for Grayndler said, political cowardice embodying a lack of vision and a different way of saying privatisation, or is it something that Victorian Labor wants to be elected to implement?

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I second the amendment. There is no nepotism involved, but I think the finest statement I have ever heard on privatisation came from the state member for Mount Isa, in my electorate—a person called Robbie Katter. He said that when you corporatise or privatise an essential service, you provide to that corporation the right to tax you at whatever level it feels like for forever. Enron: The smartest guys in the room should be compulsory reading in this place. There are four books on Enron, and I have read them all. The head of Enron told the President of the United States and the Governor of California that corporatisation would be wonderful for them—this is what he said—because they would get more schools, more police and more of every government service if they sold California's electricity industry. We now know what the outcome was. The congressional inquiry informed the people of America that Californian electricity consumers had been skinned of $74,000 billion in the space of four years. Of course the president and CFO of Enron both went to jail—perhaps not because they had broken the law; probably just because of the people's rage about the lies that had been told.

Exactly the same story is occurring now. I read in a North Queensland paper where one of the politicians up there said that they needed a new football stadium. I think we have a magnificent stadium now, at the Cowboys, but they need a new one up there, and they want a roof on it, and we will have to sell the port and the railways. There is a very famous book called The Bible, and there is a story in there about a bloke who sold his birthright for a bowl of porridge because he happened to be a bit hungry that morning. It was not a real good deal. Those who come from Melbourne will be well aware that 200 years ago the people of Melbourne were offered some blankets and some baubles, and they gave the greater Melbourne area to some blokes who had come in from overseas. There is obviously precedent for what is going on now—blokes from overseas have come to us and said, 'Just give us all these essential services and it'll be really good for you.' I think my blackfella brothers and cousins down there in Melbourne would say, 'We got conned.'

Let us go to reality land. In the year before corporatisation, which is privatisation by another name, the cost of electricity in Queensland—and all the states are the same—was $859 a year. That is what the consumer paid in 2005. By 2013, that had risen to $2,100, and by June 2014 it had gone up to $2,395. That is 400 per cent higher than before corporatisation. Yet, the government is advocating that this is the pathway we go down. I can say with great conviction that the economy of this country has been carried by the coal industry. At stages it has comprised nearly 30 per cent of the entire income for this country. Do not let the ALP come along with their hypocrisy here—they have sold more of the assets than the LNP. Qantas is gone; the Commonwealth Bank has gone. The Commonwealth Serum Laboratories! Your life depends upon the Commonwealth Serum Laboratories; now it is a money-making machine for some foreign corporation. It even extends to the very production of money. They are talking about selling the Mint, which puts a whole new meaning on the phrase 'licence to print money'. When I was young they used to say, 'He is the sort of bloke who would sell you the Sydney Harbour Bridge.' The only joke now is that it has not been sold. But don't hold your breath.

Let me turn to electricity. Close to half of Australia's export earnings comes directly or indirectly from mineral processing. That depends upon the price of electricity. The aluminium industry in Australia is one of the big three; coal, aluminium and iron ore have carried the economy of Australia for nearly half a century now. Why did we get aluminium? We produced virtually no aluminium in Australia except for the hydroelectricity produced in Tasmania, which is very cheap. Queensland got a massive aluminium industry because we had a restricted resource policy, a reserved resource policy. Every country on earth has a reserved resource policy. The Americans allow no gas to be exported from the United States unless there is no-one in the United States that wants that gas. That is called a reserved resource policy.

In Queensland, our opponents used to call us the agrarian socialists. I do not what you would call the Country Party, the National Party now. It is part of the Liberal Party and has been for about 20 years. Under that regime we took I think two per cent of the coal mined in Queensland for free. If you mined coal in Queensland you gave a tiny two per cent to us, but that was enough to fire the Gladstone power station, which provided more than half of the state's electricity. We put out one and a half thousand million dollars for that power station, which was half of the Queensland budget. You talk about borrowing—the biggest borrowing government in human history probably was the Queensland government. We borrowed it because we absolutely knew that when we could provide the most cost-effective, cheapest electricity in the world we would get the aluminium industry. So not only could we provide the consumers in Queensland with the cheapest electricity in the world because we had the biggest power station in the world and the economies of scale were magnificent, but it was fuelled by free coal. This is a mortal sin to the free marketeers, and don't let the ALP be hypocrites here. They have been governing most states and federally for most of the last 25 years and most of the selling-off was done by them. But these blokes on the government benches are now saying, 'What is left to sell?' They are scrounging around and they are finding a fair bit.

Let me return to electricity. Queensland had the cheapest electricity in the world. Under the socialists and then under the LNP it is now part of Australian grid and this graph shows that we have the second highest electricity charges in the world. Our enemies used to call us agrarian socialists. Under agrarian socialism we had the cheapest charges in the world, and now we have the second highest charges in the world. There is the graph I asked for from the Library. Before corporatisation we were still amongst the cheaper electricity countries in the world. So that is not enough of them, they want full privatisation. A 400 per cent increase over 8½ years is not good enough. They have to get a lot more donations from their corporate backers. The previous speaker, the leader of the Greens in this place, referred to this sort of thing. I was the third-ranking minister in the Queensland government before it fell and I am not naive or so holier than thou enough to think that political parties are run on fresh air, and you have got to reward those people. For heaven's sake, reward them with knighthoods or reward them with places on boards, but do not reward them by giving them the people's assets.

The intellectual underpinnings of this are from Wat Tyler and Bishop Langton, one of the greatest men in human history. He drew up a document called the Magna Carta. If you want to know about it and understand about it, go and see the Russell Crowe movie Robin Hood. In that movie they said, 'You, Mr King, do not own these assets. The land, the water, the resources and assets of this nation do not belong to you, they belong to the people, and you have no right to sell them or to take them off us.' That is exactly what is taking place here. I do not notice too many outside of Mr Bandt and myself who are prepared to go out there and fight as our forebears did in the run-up to the Magna Carta. I do not notice too many Bishop Langtons around the place either.

Let us climb back down to specific examples. Tasmania had the cheapest electricity in the world, along with Queensland, because all of their electricity came from small hydro systems which were enormously cheap. They got the aluminium industry before Queensland did. Remember this is your second or third biggest export item for 50 years in Australia. This is an item that has been carrying the nation, with cheap electricity. So I talked to the Deputy President of the ALP in Tasmania, a very erudite lady whose stepfather was Chief Justice, I think, for Tasmania. I said, 'Why do you now have the highest electricity charges in Australia and Australia is amongst the highest in the world?'

She said that the reason is pretty simple. When you privatised the generating corporation they required a 20 per cent capex and profit. The capex had to be serviced and a profit had to be made—so there was 20 per cent. Then, the transmission corporation had to make 20 per cent—so that is 20 per cent on 20 per cent. Then, of course, the distribution and retailing arm had to make 20 per cent—so it is 20 per cent on 20 per cent on 20 per cent. So just straight off we had nearly a 100 per cent increase in the electricity charges in Tasmania—20 per cent on 20 per cent on 20 per cent, you can figure it out for yourself. If you start with $120 per unit you end up with $173. It is almost a doubling straight off.

Here you have a monopoly, or a monopoly shared by two or three people, because there are really only three generators in this country—you might argue four. I have always said the problem in this place is that your mummies and daddies never had you play Monopoly. If you played Monopoly you would know that when you own two utilities you have twice as much money per unit as when you own one utility. And if you own four utilities, for the same unit you have four times as much as if you owned only one utility. If you owned all of them then you have 700 per cent.

I want to turn to the industry that carried Australia, the coal industry, and that was built on— (Time expired)

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

The Asset Recycling Fund Bill 2014 and the cognate bill are yet another example of the Abbott government's spin, the Abbott government's arrogance, and the Abbott government's extreme right-wing ideology, an ideology of a government that wants to privatise everything, wash its hands of social responsibility and let big business control the economy. The Abbott government wants people to believe that by renaming projects, by reannouncing projects, or by rearranging funding the government is offering something new.

There is no doubt that Australia's infrastructure is lagging and that it is holding back productivity. Good infrastructure has a direct effect on national productivity and on national wellbeing. That is why Labor, on coming to office in 2007, made infrastructure spending a national priority. Governments must lead and show initiative in the provision of public infrastructure.

Major infrastructure projects are, however, costly, often costing hundreds of millions, if not billions, of dollars. For that reason it is critical that projects are chosen carefully, that the right priorities are made and that projects provide good value for the funds expended. No business would spend large sums of money without a careful cost-benefit analysis of the expenditure required, and nor should governments. That is why evaluation by Infrastructure Australia needs to be tabled in parliament before a project is committed to.

The amendments proposed by the member for Grayndler do just that and will ensure that each major project is properly scrutinised and that the Australian people can have confidence in the project cost and the priority given to it. They can have confidence that the project is not just another government pork-barrelling exercise. The amendments also provide for the inclusion of a disallowable instrument, so that only projects that have a proven productivity benefit—that is, those that pass the test—will be funded by this parliament.

This legislation also proposes to pay state and territory governments an incentive of some 15 per cent—that is, to bribe them—for privatising their assets and then reinvesting the funds they receive from those assets into new infrastructure. So the multiplier effect would give the impression that this government is spending huge amounts of money on new infrastructure.

There may be some cases where privatising can be justified. I share the views of the member for Grayndler, who says that each case should be treated on its own merits, case by case. I believe that is fair and reasonable. There certainly may well be examples where it is in the public interest to allow an asset to be sold. But I also see that privatisation is too often used by governments as back-door taxation. Assets are sold and governments use the money to pay off debts or to fund other government expenditure. Once in private ownership, the price of the services or the use of those assets—whether it is toll roads or something similar—increases. But it is no longer a government asset and the governments that have sold them can wash their hands of the responsibility that goes with being in government. I saw that happen in South Australia when a previous Liberal government sold off that state's electricity assets. The choice at the time for the government was very simple: it could have cut government expenditure, or borrowed additional money, or sold the assets. By selling the assets what they effectively did was increase taxes to the people of South Australia, because paying higher electricity prices, as they ultimately did, was the alternative to the government perhaps having to increase taxes.

There is a fundamental difference, and that is that the people of South Australia, as in so many other cases where public assets have been sold, are then left paying higher prices, not just for the short term—perhaps a few years, which would have been the effect of the government having borrowed some money at the time—but forever and a day. Indeed, in my view, those higher prices are an alternative to a higher tax that the government could have imposed on the day but which would have been for a limited period.

I cannot think of one major government asset sale that has resulted in lower charges or lower costs to people, nor have I heard members opposite who have come into this place supporting this legislation provide one example of where privatisation has resulted in lower costs to the Australian community. If they can do so, I would be pleased to hear the example that they provide. Conversely, there are numerous examples where assets have been privatised—right through from utilities such as water, gas and electricity through to banking, with the sale of the Commonwealth Bank and other state banks—where consumers ended up paying more and continue to pay more each day. Indeed, since the sale of the Commonwealth Bank and other state banks, bank profits have skyrocketed.

What is equally concerning about the sale of private assets is that the first thing that inevitably happens is that a new CEO is employed and the CEO is then paid millions of dollars—and, again, there are countless examples of that. It is the consumer, the Australian people, who are paying those excessive and exorbitant salaries to those CEOs as a result of privatisation. At least if an asset is in government hands, the government can determine the level of remuneration.

This whole issue was put so well in an opinion piece by Professor Sharon Beder, a visiting Professor at the University of Wollongong, reported in the Sydney Morning Herald on 10 January this year. I want to quote an extract of her opinion piece. I quote:

The privatisation of essential government services is not about competition and efficiency; it is about the redistribution of wealth and control.

Privatisation has become the final resort of governments that need funds but are afraid to tax the wealthy and prevent tax evasion by big businesses. Instead, government assets are sold in a scramble for cash at the expense of ongoing dividends and government control of essential services. Struggling families and small businesses suffer most from the inevitable price rises that follow.

For example, experience in the United States, where public and private enterprises supplied electricity contemporaneously, has consistently shown that public enterprises can provide a reliable service at lower cost to ratepayers. Similarly, in Britain and France, municipal governments offer water services at cheaper rates than privately operated services.

I understand that, in the US, some communities are now looking at buying back the very assets that they have sold, because they have come to the conclusion that it was not in the public interest for them to have sold those assets. It will be interesting to see whether that trend continues throughout the US and how successful they are in doing that.

I want to turn to the matter of where the Prime Minister wants to be known as the infrastructure Prime Minister of Australia. It is, again, just another one of those simple slogans that he thinks is going to become a reality. If the Prime Minister wants to be known as the infrastructure Prime Minister of Australia I can assure him that he is certainly not proving to be the infrastructure Prime Minister for South Australia. In this budget the Abbott government has cut South Australia's local road supplementary funding, which was worth $17.8 million last year and was worth $51 million over the last three years.

This is additional funding that has been provided to South Australia for over a decade in recognition that there is a flaw in the funding formula used for the distribution of this funding. South Australia has 11 per cent of the national roads and seven per cent of the population but receives just 5.5 per cent of the local roads funding. This is a flaw that has been recognised by both previous coalition governments and the previous Labor government. It has been recognised by way of supplementary funding for over a decade. This year, where the Abbott government claims to be putting more money into infrastructure than ever before and where the Prime Minister wants to be known as the infrastructure Prime Minister of Australia, the Prime Minister has cut that funding to South Australia. That means that local councils—and, in particular, country councils, who rely on this funding the most—will now have to raise their own taxes even higher if they want to carry out the necessary road works that they require.

To add to this, we know that the federal government has frozen the financial assistance grants to local government for the next three years. That is a $920-odd million hit to local governments around the country. Again, financial assistance grants support country councils more than any other group of councils—and, again, the country councils will be hit the hardest. For South Australia, where most of our councils are indeed country councils, the freezing of those grants is a double hit on the cut of around $18 million a year to local road supplementary funding. So they have now been hit twice by decisions of this government. It is no wonder that the cover of the latest LGA Newssays: 'SA roads to ruin'. The article inside the magazine highlights and identifies how South Australia is indeed going to be hit so hard because of the infrastructure funding decisions of this government.

But it actually goes one step further. If we look at the total amount of funding for infrastructure in the forward projections of this government's own budget, then South Australia gets $2 billion over the forward estimates out of $50 billion. That is only four per cent—even less than what we are getting out of the local road funding. So, South Australia has again been hit by the cuts in the local road supplementary funding, by the freezing of local government financial assistance grants and then by getting a lower percentage than I believe it is entitled to in terms of the total infrastructure package that this government has committed to.

It is interesting, because earlier this week mayors from around Australia were here in this place, and I know that they met with South Australian members of parliament, including the Liberal members of parliament. And I know that in their discussions they raised the question of the cuts to the $18 million supplementary road funding. They are very concerned about those funds. It is interesting that we have an assistant infrastructure minister who comes from South Australia. My question to the member for Mayo, the member for Barker and the member for Hindmarsh—who I know met with the mayors from around South Australia—is, where were you when the cuts were being made to South Australia? And what are you going to do about restoring the funding that South Australia loses as a result of this budget? The reality is that once again South Australia has been dudded by the Abbott government, and South Australian federal Liberal members have gone missing when the state has depended on them.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

As is always the case with the Abbott government, never take note of the names and terms they use; think of the ones they are hiding from view. Or, in stark terms, when it comes to the Abbott government, do not focus on the smoke; focus on the reality that it is about to burn you. Only the Abbott government could attempt to—in this case, with this legislation—create a virtue out of asset recycling when and hide from view the thing they do not want you to see. The Asset Recycling Fund Bill 2014 is designed to coax—or, as some have said in this debate, bribe—state governments to sell assets to get their hands on federal funds. The government will not provide the funds on a needs basis but rather will do it only on the basis that state governments will do this to their own constituencies.

Instead of being up-front and telling people that this is a pro-privatisation measure, the Abbott government has turned green and embraced the concept of recycling—which is not surprising; since they have assumed office they have been re-using Labor government infrastructure announcements and rebranding them as Abbott government ones. And now they are taking things further, but they are being consistent. Not content to break their own promises, the Abbott government is trying to get state governments to breach faith with their own constituencies and privatise assets that those state governments did not get a mandate for. They are trying to get other governments to make unpalatable decisions on behalf of the Abbott government, which is what is happening in New South Wales. In New South Wales we have a government that is now proposing to sell the poles and wires—electricity assets—that exist in that state. We previously had a premier who made numerous public comments recently against privatisation of the distribution of poles and wires in New South Wales. But a few months later we get a new Premier, a new face and a redefinition of the term 'commitment'. The new Premier, Mike Baird, is brandishing New South Wales treasury analysis suggesting that New South Wales's regulated prices are higher than in the jurisdictions where poles and wires have been privatised. Yet that does not necessarily put a spotlight on something within that analysis, and that is that a lot of investment has been made in New South Wales to bring ageing assets into the 21st century to ensure that they can deliver on electricity in the way that modern consumers are using and demanding electricity supply, and at a quality that they can use.

What they should be focused on is the analysis work that is being done in some jurisdictions in Australia where privatisation has occurred. For example, last week there was an article in the Sydney Morning Herald by Sean Nicholls and Brian Robins. Brian Robins is someone who has been following energy issues for well over a decade, so he speaks with a degree of experience and expertise. He focuses on South Australia. The article says:

… the state's retail electricity market was deregulated after household electricity bills soared almost 24 per cent.

Today, South Australians are burdened with among the highest electricity bills on earth, ranked only behind Germany and Denmark according to a 2012 report.

The average annual South Australian bill is now $2335, compared with $1960 in NSW and Victoria, figures from the Australian Energy Regulator (AER) showed …

It is important to note that. And here is the bad news. I think there will be some suggestions about the future of electricity pricing in New South Wales, and we have to see whether or not reality will bear out. But it is the electricity consumer who is the loser, no matter the ownership model. And I would not necessarily be racing to embrace privatisation if I were concerned about electricity pricing. I understand that the New South Wales Nationals are concerned about this, and they will rightly be concerned about this going into the election, because their constituencies are rightly concerned about it.

Why are we seeing this in New South Wales? We are seeing it because the New South Wales government is having to foot the bill in part for supporting a project that some are worried will turn out to be a white elephant, and that is the development of Badgerys Creek airport in Western Sydney. Importantly, this New South Wales government work is being done to support yet another breach by the Prime Minister. You might recall that in January 2013 he said that he had absolutely no plans for a second airport at Badgerys Creek. It did not take him too long to commit a breach of faith with the New South Wales people and the Australian people in committing to this project soon after getting into government. I do not recall either the member for Macarthur or the member for Lindsay or any of the candidates we stood against in Western Sydney displaying pamphlets saying that they were committed to Badgerys Creek airport. If anything, they rightly shook their fists at the notion of this airport and said that they would not support it. But now we have a government saying that that is exactly what they are going to do.

The interesting thing is that this government, making out that they are big and strong about these things, made a decision on Badgerys Creek airport but will never mention the actual term 'Badgerys Creek airport' because it is such a contentious issue in our region. It is, in fact, as I have dubbed elsewhere, an airport that dare not speak its name. The only time that the Prime Minister has ever used the term 'Badgerys Creek airport' was when he was before TheDaily Telegraph at their Champions of the West dinner. As I have also remarked upon, talking tough in front of TheDaily Telegraph is like driving an ice cream van through a sweaty neighbourhood. It is not the hardest job in the world, particularly when TheDaily Telegraph has been championing it. What was interesting that night was that—

Mr Chester interjecting—

You get the concept, Member for Gippsland. It looks like you have had a few ice creams, like me!

But certainly that evening, as I have remarked upon elsewhere, the Prime Minister in talking about Badgerys Creek airport said that he did not want to see burden without benefit. So even the Prime Minister recognises that this this going to be a problem. The government's idea of the benefit is to build three roads, which the member for Mayo has described as a Western Sydney economic project. If you build three roads, amazingly you have an economic project in Western Sydney even though some of the details have not even been put on the table properly. For example, some of those roads have to be built anyway for the south-west growth centre that is going to house a city the size of Canberra—300,000 people. When you look at the program itself, one of the key projects, the new east-west motorway, at a total of $1 billion does not even have an end date put to it. We have been given a rather loose commitment that it will be completed before the airport opens in 2022. This is exactly the type of problem we have with infrastructure planning in this country—we have these loosely made commitments and not much evidence to back them up.

In the case of Badgerys Creek airport, one of the things we are being told is a big seller is jobs. Yet at a meeting that the Deputy Prime Minister convened and then did not show up for to the talk about Badgerys Creek airport we found out from departmental officials the 60,000 jobs figure that is being mooted by the Prime Minister and his acolytes is not even true. It is going to be only 5,000 because 5,000 jobs flow from a single runway airport such as is going to exist at Badgerys. Frankly, we are being made commitments about benefits that are not in reality going to be delivered and we are going to be the worse for it. I will come to that in a moment.

There are concerns that Badgerys will become an expensive, costly waste of taxpayers' funds. People have looked at where second airports have been built in jurisdictions either here in Australia or overseas. Here, Avalon Airport is struggling to exist. It was opened with much fanfare. There was a lot of retail presence there. I am now led to believe that all it has is a food-and-coffee outlet. Qantas has reduced its presence there. Avalon has been able to assume only 1.7 per cent of air traffic from Tullamarine. So there are concerns about Avalon.

If you look overseas to Canada, when Mirabel airport near Montreal was built it was promised that it would carry the load of the other airport that exists in Montreal that was built in the 1970s. It has turned out to be an airport no-one wants to use. It is 50 kilometres north of Montreal and was supposed to replace Dorval airport, an airport that was only 20 kilometres from the centre of Montreal. An article that Ean Higgins wrote for the Australian on 9 May said:

Mirabel died a slow, drawn-out death as a passenger airport …

Yet we are going to commit billions of dollars to Badgerys.

Looking to other parts of the world, there is the Ciudad Real Central Airport, for example, previously known as the Don Quijote Airport, in South Madrid. Like Mirabel, it is now a ghost airport. They are airports that are not delivering, and yet we have committed billions of dollars to similar airports. It has now prompted analysts here in Australia—for example, a transport and infrastructure analyst with Deutsche Bank Cameron McDonald—to say that the federal government's plans for Badgerys are pretty vague. Cameron McDonald said:

"We don't even know what sort of airport is going to be built."

…   …   …

"I question some of the numbers—how you make billions of dollars for investing in Badgerys …

…   …   …

Even if Badgerys Creek did better, McDonald said, and got about 2 per cent of Kingsford Smith’s 38 million passengers, that equated to only 760,000 passengers a year.

"You put up, say, $1.5bn for a runway and a basic terminal.

"It’s not going to be a very lucrative business."

So my issue is that we have seen infrastructure that is not what Western Sydney wants; it is stuff that east of Sydney needs to see happen. We are told we are getting it because we want it and that it is based on community research—and this is intriguing—that Labor did when we were in government. A number of MPs from Western Sydney, me included, asked then Prime Minister Gillard how you could conduct community research on a project that we did not support and it was party policy not to support. We did it anyway. Then—surprise, surprise!—the federal Abbott government got its hands on documents that were part of a cabinet process some time later. Questions have to be asked about how the Abbott government got that material and how it is relying upon it. I think that is a serious breach of cabinet process and there need to be questions asked about how the Abbott government has just felt free to use this material.

To come back to the point, we are committing billions to a project that is going to suck up dollars that will not be available for other things that Western Sydney needs. Those opposite are cutting health infrastructure spending for things that we need. We cannot get that but we can have an airport. If you ask any other Western Sydney resident what their infrastructure needs are, they will not be asking for an airport because they do not believe it is in the interests of Western Sydney residents to have that airport when they have other infrastructure needs.

No-one has had a serious look, for instance, at unshackling the existing investment around Sydney airport. For instance, no-one is seriously looking at Sydney Airport's flight movements that have been restricted and restricted for quite some time. No-one is seriously looking at lifting the movements per hour from 80 to 85. One of the arguments is that the roads around the airport will not allow that to occur. Well, if that is the case why do we have a federal government committing billions to roads on the other side of the city instead of looking at what would make Sydney airport work better by freeing the land-based transport around the airport to accommodate an increase in the availability of flights within Sydney? No-one has actually looked at it, yet we are going to commit billions, and the people of western Sydney will not actually get the infrastructure that they need. They will get it on the basis of what others are claiming they need. We are just going to repeat the Canadian experience of wasting billions on an asset 50 kilometres away instead of supporting what the markets want. And this is being championed, not by people in our area it is being championed by people outside it. Again, I do not think that it is in the interests of the area.

In time there may be support amongst parties for this airport, but my view is that I will take the position of sticking up for the people of our area because I think they have been dudded for long enough. We have wanted infrastructure where the city continues to grow and where it is not supported with proper infrastructure. But then no government is prepared to, in effect, retro fit suburbs that have already been built with new infrastructure. Or, if that retro fit is put forward, it is again consigning infrastructure dollars in a way that will divert from the needs of people where they actually do require better infrastructure.

Certainly, I think that this government is going to make a series of mistakes that will be very costly, and the people of western Sydney will be paying for them.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I rise to speak to the amendment that has been moved to the Asset Recycling Fund Bill 2014 by the member for Melbourne—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

And the member for Kennedy!

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

and seconded by the member for Kennedy! I indicate that the opposition will not support this amendment. It has been moved as a second reading amendment and would have the effect, because it deletes all words after 'That', of changing the title of the bill. It would have the effect of negating the further debate on this important issue.

I do want to indicate that there is a very good argument, which I am sure may well be pursued by the member for Melbourne and the member for Kennedy, to change the name of the bill. It could well be a consideration-in-detail amendment. They do make the point that it is perhaps more transparent a description of what this legislation is than the 'asset recycling' terminology, which is an attempt to encourage privatisation without actually saying that this legislation is about encouraging privatisation. But we will come to that point when we get to the consideration-in-detail stage.

I have indicated that I will move substantial amendments in the consideration-in-detail stage to this legislation. This is to improve the operations of the bill and to make sure that it is transparent. The opposition's amendments will go to the issue of making sure that there is proper cost-benefit analysis so that investment in infrastructure has to be in the most productive infrastructure possible, rather than infrastructure based upon a political decision. We want the economic growth and jobs to be the key factor, not the marginality of seats—frankly, given the National Party's record on these issues and the fact that in the budget that has just been handed down there are projects like the Perth Freight Link project. The WA government have said themselves that there is no plan, there is no detail and there is no cost-benefit analysis, but it is just appeared in the budget. So, I certainly understand the motives of the member for Melbourne and the member for Kennedy for their amendment, but we will not support it at the second reading stage.

In terms of the proposition: we also indicate that it is our view that should any asset be privatised then that needs to stand by itself—whether that is indeed a positive thing for any state or territory jurisdiction. We do not have a view, unlike those opposite, that 'public: bad, private: good'. That appears to be the motivation of those opposite. I indicate some surprise that during this debate no government member up to this point—and their speaking list has been exhausted—not one, has mentioned the budget initiative from last year of the tax loss incentive that was put in the budget for designated infrastructure projects.

This came about through an exhaustive consultation process by my department with the sector. It came into effect on 11 July 2013 after legislation was carried in this parliament. This legislation was about encouraging private investment into nationally significant infrastructure. We on this side of the House recognise that government cannot do it all by itself. We need to encourage private sector investment. And we did that with very practical initiatives in legislation, ones which we know that the now government paid no attention to in terms of detail over the previous term of parliament. Now that they are the government they should actually have a look at what legislation is in place that provides an opportunity to encourage investment in infrastructure.

The infrastructure investment incentive uplifted the value of carry-forward losses by the 10-year government bond rate and exempted the carry-forward losses and bad debt deductions from the continuity of ownership and the same-business tests. That is, an asset that was a brownfield asset where there was no incentive for private sector investment because the loss of capital that comes in at the front end of any infrastructure project through the construction phase could not be picked up if there were a change of ownership of that asset. We introduced this practical change with a support of up to $25 billion in new private sector infrastructure investment to apply from the previous financial year. In order to receive the tax loss incentive, applications had to go through the Infrastructure Australia process, and that is the point of our amendments that I have foreshadowed. It has to be for nation-building infrastructure. That is why we build it into the process.

But there is another reason as well. The money for this fund that is before this legislation is not new money. It is money that was already in the budget in the Building Australia Fund and the Education Investment Fund. That money of $5.9 billion was there with a system around it to ensure proper expenditure. The BAF could only be used for priority projects as recognised by Infrastructure Australia. The EIF could only be used after recommendations by experts and a panel, meaning that this was making a significant contribution to the national effort in terms of science and research, producing, therefore, future productivity and future benefit for the nation. Indeed, in this year's budget—with the rhetoric of those opposite about private sector investment—cuts were made to the existing funding that had been made available in the 2013 budget for the Brisbane cross-river rail project and the Melbourne Metro project. What we had there was a system whereby there were upfront payments from the government but also put forward an offer of 50 per cent of an ongoing availability payment for the capital cost. As well as that, there was an Australian government guarantee on private debt to enhance the projects creditworthiness and help reduce the cost of capital.

So here you have practical examples of measures to encourage private sector investment into infrastructure. We had agreements worked out with the Queensland and Victorian governments that they walked away from because of the ideological position of those opposite who say that any Commonwealth engagement in public transport is bad. What that does is stop proper investment in productive infrastructure because, if you are about addressing urban congestion, you need strategies based upon public transport as well as roads. You need to make sure there is an integrated transport strategy in our major centres.

To give two other examples, we had the Moorebank intermodal project, a model in which the government established a government owned entity to establish that project to make sure it was got ready to then go out to market to encourage private sector investment. Without that government entity being involved in the Moorebank Intermodal Terminal, it would not have happened. This is a one-off opportunity to use this large tract of defence land in South-West Sydney to create an intermodal project that will take 3,300 trucks off Sydney's roads every single day and will make a big difference in terms of rail freight. Those opposite did not seem to understand it at all. By establishing the process that we did, we covered some of the preconstruction risk that would have prevented this project going ahead. It was a win for motorists, a win for the environment, a win for our economy and a win for productivity. But what was the position of those opposite on this issue? They opposed it. They actually did ads during the 2010 election. The member for Hughes was very prominently out there opposing this practical proposal.

Also in last year's budget we had the F3-M2 proposal. It was a proposal that was around and was promised by the Howard government. They just did not get around to doing anything about it. We sat down with the New South Wales government and Transurban to come up with a proposition of $405 million from each level of government. It was up to that figure—it may well be that that figure is not needed—to make sure that this long-overdue 7.7-kilometre link road would be able to be built. It will take out the traffic lights and congestion that is currently there in that northern part of Sydney and ensure, because of the link with the M7, that people who are not going to Sydney can get around and through Sydney without going through a single set of traffic lights. It is a great example of the federal government harnessing private investment to build much-needed public infrastructure.

Those opposite of course have sat down with the New South Wales government since, even though the agreement was signed and the money started to flow in the 2012-13 financial year, renamed it NorthConnex and pretended it is a new project. They had a grand press conference as part of the 'magical mystery infrastructure re-announcement tour' by the Deputy Prime Minister and his errand boy, the member for Mayo. They run around the country making re-announcements but they are not actually delivering new investment.

The Labor Party are up for investment by government in infrastructure. We are also up for encouraging private sector investment in infrastructure. What we are critical of is this pretence that money that was already allocated in the budget is somehow new and is an additional incentive into infrastructure. So we will be proposing amendments which, firstly, ensure that the funds from this can be made available on the basis of a proper cost-benefit analysis that is transparent and published and done through the recommendation of Infrastructure Australia. If those opposite do not do that they will be taking away funds that were protected and that legislation ensured would be used for the productive side of the economy, just putting it into wherever they want it to go. Secondly, our proposed amendments will go to making it a disallowable instrument, because this parliament should get to have a say about issues if money is going to be used for those issues. Unlike the other side of the parliament, we do not just say that any privatisation is good. We want this parliament to get a say in that process, and that is why we will be moving amendments in the consideration in detail stage and why we will not be supporting the second reading amendment by the member for Melbourne and the member for Kennedy.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Asset Recycling Fund Bill 2014, which could more accurately be called the 'Taxpayer Funded Privatisation Cheer Squad Act 2014'. This bill, along with the cognate bill, is part of the coalition's election commitment to encourage privatisation. It comes out of the philosophy of the Liberal and National parties that basically says that anything owned by the public is bad and that anything owned privately is good, as detailed by the member for Grayndler. The Asset Recycling Fund would be established by this legislation, which would be a dedicated investment vehicle providing financial assistance and incentives to the states and territories to create new productive infrastructure. I have not gone through the legislation in great detail to see how productive infrastructure would be determined or what assets would be sold.

This is an interesting piece of legislation in terms of looking at the philosophy of the two major political parties in Australia—the Labor Party and the coalition. I will touch on the details of the legislation and then go to some of the philosophical questions it raises. The bill contains five parts. Part 2 establishes the Asset Recycling Fund. Part 3 sets out the responsibilities of the Future Fund Board in determining how to invest the funds of the Asset Recycling Fund and in determining the nature of those investments. Parts 4 and 5 set out the reporting obligations and the delegations.

The motivation for this legislation arose from the findings of a Productivity Commission inquiry which suggested that there is increasing caution amongst private investors to commit to public infrastructure projects, particularly after some high-profile commercial failures: CLEM7, AirportlinkM7, the Lane Cove Tunnel and the Sydney Cross City Tunnel. It is always a difficult venture when private investors build income-producing assets that might have a life cycle of 30, 50 or 100 years. Private equity firms or other countries' future funds that purchase these assets can make the wrong decisions. The CLEM7 was a classic case of relying on the wrong advice or poor decision making to determine the number of vehicles per day that would make use of it and the income it would generate, and I think there is some ongoing litigation arising from that.

The legislation before the chamber aims to encourage private companies to fund and run public infrastructure, particularly transport. It gives an incentive to states and territories to sell assets, including transport infrastructure, and then use the money from the proceeds of the sales to build new productive assets. Fifteen per cent of the asset value of the sale will be used to fund the new infrastructure.

There is $5.9 billion in the Asset Recycling Fund, $2.4 billion of which comes from the Building Australia Fund and $3.5 billion of which comes from the Education Investment Fund. Additional money will come from the sale of Medibank Private. It will be interesting to see whether the kitty will eventually run out. More importantly, it will be interesting to see whether the way governments in the past have traditionally funded public infrastructure—under the ALP it was either 50 per cent or 80 per cent—will be offset by the financial contribution of 15 per cent of the asset value of the sale being used to fund infrastructure, as set out in this legislation. For making decisions about whether an asset will enhance productivity, be good for jobs and be good for the nation, we put our faith in Infrastructure Australia, whereas the coalition seem to have gone for a different mechanism. I have serious concerns about that.

Regarding the Prime Minister's definition of what an 'infrastructure prime minister' is—I served under two infrastructure prime ministers. Labor has an incredible record when it comes to infrastructure. When we came to government in 2007, Australia was 20th in the OECD in spending on infrastructure as a proportion of GDP. Under the Labor government, we moved from 20th up to first. We lifted funding from $132 per Australian up to $225 per Australian. A lot of that was through that mechanism of Infrastructure Australia, where people who understand the benefits of infrastructure can research and rank proposals before making a decision. Cross River Rail was number one on that list, but sadly the Newman government walked away from that and has come up with a bit of a dog of a project—the BaT Tunnel.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

A pretty costly dog!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

A very costly dog, in fact, that is going to have implications for my community. But at least it is a step towards recognising the economic productivity that comes from investing in public rail, something that this Commonwealth government does not seem to understand. Under Labor, when it came to investing in rail, I am proud to say that we invested more in urban rail infrastructure than every other state government since Federation combined—$13.6 billion. We also invested $3.4 billion in rail freight over the six years we were in government. This means that by 2016 the average trip from Brisbane to Melbourne will be seven hours shorter, and the journey from the east coast to the west coast will be reduced by nine hours. Under Labor we also rebuilt more than one-third of the network—up to 4,000 kilometres of rail track. Contrast that with the opposition, who take a different approach entirely.

With this legislation, the focus on new, productive infrastructure should be looked at through the prism of the philosophies of the two parties. I believe, and every sensible Commonwealth government would believe, that the Commonwealth should play a lead role when it comes to nation-building infrastructure projects. We cannot just sit back and wait for times of war for the Commonwealth to step in; we should be looking at how we can improve our economy. We should also look at how we improve governance standards when it comes to making decisions that are in the national interest, rather than being connected to that three-year political cycle or to the marginality of seats—letting that determine where projects that benefit a community are going to be located.

Privatisation of one asset to fund a new asset does have some merit. I understand that can be the case in certain circumstances; but these matters should be for the states to determine in open consultation with their communities. This legislation is wholesale: 'You sell something for a billion, we will give you $150 million; you sell something for $2 billion, we will give you $3 million'—up to this $5 billion or $6 billion worth of handouts. This is Commonwealth taxpayers' money being handed out to states for making decisions that they may have made anyway. Obviously, states do make decisions about assets. Governments do. The Commonwealth government used to own the Commonwealth Bank. The Queensland government used to own the Babinda Hotel, which I think is why it has the longest bar in Australia—because it was designed by a public servant. The state government made that decision at the time because they were trying to open up the cane fields. I think the Queensland government even used to own butcher shops, but these things get sold off. The Queensland government even owned the Bellevue Hotel—they bought that in 1967—but decided to knock it down on the night of 20 April 1979. So governments do make decisions about assets, and things then change over time.

The idea of assets being sold off is not something that the Labor Party is scared of supporting, but we need to look at the process. If you look at the assets owned by states—and I did not get a definition of what the eligible assets would be—the key ones would obviously be power stations and, often, the coalmines located with those power stations. Power stations are income-generating assets, even those dirty brown ones down in Victoria—they still pay a dividend back to the state government, so when people turn on their lights, they are actually paying money to the state government. Other assets include ports—in Queensland, Gladstone and Townsville—and rail lines. I think the rail lines, or certainly what is below the rail, are still owned by the Queensland government. There is water infrastructure, like dams, and there are some state government owned forestry assets as well. I am not sure whether the list of eligible assets would extend to schools—such as Nyanda State High School, a high school in my electorate that sadly was closed down by John-Paul Langbroek, the state education minister—hospitals or even state buildings.

Then there is the process of turning these things into new, productive infrastructure. We would need to look at what happens when you do sell a state asset. Obviously it depends who it is sold to, but, as I said, it is basically going to be either a private company, another country's future fund—they already own assets here in Australia—or a superannuation fund, either domestic or from another nation. Some of the Canadian superannuation funds certainly like Australian assets because they have a nice, steady return.

So what do they do? As I said, private capital is a bit more expensive than the nation's capital, so they will have to recoup that in charges. They can make some savings in safety and OH&S as much as possible, hopefully within the law. That is one way they can make savings. They also can cut wages and other costs. But the end result for any taking over of a state asset will normally be that the charge associated with that asset will go up—the port charges will go up; the electricity charges will go up; the rail charges will go up. That is just the nature of any privatisation. Whilst the LNP talk about this taxpayer funded privatisation cheer squad bill that they have before the chamber now, they do not mention the fact that the costs associated with this will flow on to every electorate.

As I said at the start, this is a bit of difference in philosophies between the two parties. The Australian Labor Party is based on the idea of the collective having more power than the individual. We are a social democrat party, but we still believe in profits and markets. It is interesting to look at this legislation and see what it says about the Liberal and National parties, with their focus on the individual and on the market. The true liberals are slowly starting to die out in this House, the National Party aside. The voices of the true liberals—the Sue Boyces of the world—are being taken over by that extremist group, the Tea Party fan club. As the Tea Party fan club slowly take over the philosophy of the Liberal Party, and the National Party are less and less effective in putting forward their views of looking after the bush, it is going to be an interesting battle for the soul of this nation. We have seen the budget that this coalition has handed down—surely one of the cruellest budgets ever, with that focus on the lowest quartile making all the sacrifices, particularly in the bush. It will be an interesting debate. We have two amendments to this legislation, and I ask the LNP to consider those.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I seek leave to speak a second time on this. There was some confusion before.

Leave granted.

I will continue with what I was saying. I spoke about the example of Tasmania, where they went from having the cheapest electricity in the world to probably the most expensive in the world. Tasmania is more expensive than the Australian average. How did that happen? It happened through privatisation. All the same generators and all the same distribution systems are operating. The state has not grown in population, so it is not as if they had to spend money on capital outlays to expand the system. There has been no capital expenditure whatsoever, and yet the price for electricity down there—as in the rest of Australia—is 400 per cent higher than it was prior to corporatisation and then privatisation. How many arguments have you got to put up for the fools in this place to realise that policy must be judged on its outcomes? Surely you cannot come into this place and put up some ideological rubbish that is based upon not a single shred of substantial economic argument or reality.

Let me give you another example, Mr Speaker, used by one of the founders of our little political party, the KAP. The government I was in built the Gateway bridge. We said we would keep the toll on it for 20 years, until it was paid off and we had serviced the interest owed to the people who lent us the money. After 20 years, the toll would be taken off and the people would have this magnificent asset that they would own and be able to use for free. Well, two years before the 20 years were up, the ALP government sold the Gateway bridge. Some 100,000 commuters a day use that bridge—and the member for Moreton probably has a lot of constituents who use that bridge. So 100,000 Brisbane people are now paying $50 a week that is a tax imposed by the ALP government in privatising that bridge. Let me again quote the member for Mount Isa, a person called Robbie Katter. He said:

When you corporatise—

or privatise—

an essential service – you give to that corporation, the right to tax you, at whatever level they feel like, for forever.

So here it is. The ALP government got themselves $400 million to buy their way through the election—which they won, so it probably did help them. They got $400 million to throw some baubles and blankets to the dumb masses, or 'We'll build you a nice little civic centre in your suburb,' and 100,000 people in Brisbane were taxed at the rate of $50 a week—not $50 a month or $50 a year; $50 a week. That is the taxation that was levied upon those poor people.

The cost of corporatising the electricity industry in Queensland is $1,700 a year. It is on a continuous growth curve. In fact, that curve now is slanting upwards in Queensland—it is 400 per cent higher now than it was before corporatisation. But even assuming that privatisation does not make that graph steeper—which of course it will—and it stays where it is, the consumers of Queensland will be paying over $6,000 a year for electricity in four years time. But, not only are they not admitting to their mistakes, they are actually compounding, dramatically, their mistakes by forcing the privatisation of everything else in the state of Queensland.

Let me give you another example. In Queensland the state is bankrupt—it was bankrupted by the ALP, but the LNP are spending $51,000 million more than the ALP spent, so if they were the great bankrupters, the LNP are even greater bankrupters. What are they spending this money on? We just heard about the BaT tunnel, but the Premier spending $670 million on tearing down a virtually new building—25 years is virtually new: you get a lot more than 20 years out of high-rise construction—and putting in its place an even bigger you-beaut building. The current offices of the Premier, the Deputy Premier, the Treasurer and all of them are in what used to be called the 'Power Tower'. It is the equivalent of the Pentagon—most people understand America better than they understand their own country—and is where the public servants and all the powerful people reside. They are going to tear that building down and get one of their corporate cronies to build a building in its place for $670 million. And they are going to say, 'This is good for the people of Queensland, we can get it for $670 million.'

Hold on a minute. They have got to get a capex return on that and they have got a maintenance cost, which Treasury says for all buildings is one-seventh of the cost. Then there is the servicing charge on the capex, so that is another 15 per cent. That is $70 million, roughly, plus another $60 million, so we up to about $150 million a year. It was costing the people of Queensland virtually nothing for the building that is there. Now they are up $170 million a year so that (a) the Premier can live in even more palatial digs and (b) their corporate donors are going to be looked after with the building of this building. That is the real reason, of course, why we are privatising the assets, so that the big corporations can get hold of an essential service and charge what they like. This is the greatest fix that you have ever seen. There is precedent for it, as I said. In 1215 at a little place called Runnymede in England—some of my forebears, I am told, happened to be there on the day—we said, 'Hold on, Mr King, the Crown doesn't own England, the people own England.' Well, that is not a concept that is abroad in Australia. The concept abroad in Australia is that the Crown owns it.

Probably the most important argument of all in a country like Australia is about when you say that the government is out of building development infrastructure. I have listened to about 12 speakers today and every single one of them has referred to 'infrastructure'. In my day, infrastructure was a railway line into the coalfields, it was a port for coal, it was a beef road—that was infrastructure. Not one single speaker today mentioned that sort of infrastructure: development infrastructure. It is a very simple concept to me, as a person who has had cattle all my life. We always say: you can air-condition the living room or you can water the far paddock. You can increase your productivity and your real wealth or you can spend the money on self-indulgence—that is your choice. Every single speaker here today has spoken on self-indulgence. If I can again quote the welterweight champion of north-west Queensland, Robbie Katter, he asked: 'What do you get for the BaT tunnel?'—that tunnel that was referred to by the previous speaker in this place.

The government is broke in Queensland, but they can find $1,000 million to build a new pleasure dome for themselves and they can find $5,000 million for yet another tunnel in Brisbane—which, I might add, brings this so-called infrastructure to 24 kilometres of tunnelling in Brisbane. Melbourne has got hardly any tunnelling. Sydney, with five million people, has only got 14 kilometres of tunnelling. But Brisbane, with a little over one million people, has got 24 kilometres. But let me go back what Robbie Katter said when he asked what you get for that $5,000 million: 'I'll tell you what you get for the $5,000 million. You get is an extra four minutes of viewing time on your television at night.' A few thousand people in Brisbane will get to watch television for about an extra four minutes a day.

If that $6,000 million that they are spending on the 'Taj Mahal' and the BaT tunnel had been used to build the railway line into the Galilee Basin, coal would now be moving out of the Galilee Basin, which holds half of Australia's coal reserves. That coal would be moving if the railway had been built not by private development, not by Gina Rinehart nor by Adani, but by the government, the people. To understand this we have to turn the clock back to 1960. In that year in Australia there was great consternation because we again had to import coal from overseas. We were a coal importing country in 1960, and I can refer you to a number of books if you want to question me on that. Probably the best is on the microeconomics of development by the dean of the faculty at ANU, but I can quote you many other books..

We were a coal-importing country. How did we go from being a coal-importing country, within 10 or 15 years, to being the biggest coal-exporting country on earth? How did we do that? I will tell you how we did that, because I was there at the time. We built a railway line. The government—the people—built a multi-user facility. We could have said to Utah, 'If you want a railway line you build it.' If they had built it they most certainly would not have let Theiss on that railway line, nor any of the other Australian companies, like BHP.

There was a decision taken by Charles Court in Western Australia. The very, very great Australian Andrew Forrest has said that development was held up by 15 or 20 years in iron ore because BHP was forced to build the railway line themselves. Naturally they said, 'It's our railway line; no-one else is going to use it.' So no-one else could.

In Queensland it was a multi-use facility. When the government's total income was $3,000 million a year we borrowed $1,000 million and built the railway line. That is why you have a coal industry today. Thirty per cent of this nation's total income from overseas, for the last 50 years, has come from coal. Why do we have the coal industry?—because an enlightened government said, 'No; we don't believe in free markets, non-free markets, privatisation or non-privatisation. We don't understand any of this ideological rubbish. There's a whole stack of people who want to mine coal. None of them has the money to build a railway line. If someone individually builds a railway line that will be his railway line and he can screw everybody or stop them from using it.' We said, 'That's a stupid idea; we'll build the railway line.' So we built the railway line.

The rest is history; Queensland became the greatest coal-exporting state on earth, producing $50,000 million in terms of today's money, every single year, for the Australian economy and the people of Queensland. We did that, and we did it by building a railway line. It would have been anathema to the people in those governments. We were considered the most right-wing government in Australia. So I do not know what right wing and left wing mean. All I know is that Adam Bandt is considered very left wing and I am considered very right wing. We both agree on one thing: that this country was built by the government building the ports, the railways and those assets that were necessary for the development of our country.

You may say that private enterprise can do it. Private enterprise would do it for their own selfish interests. If Mr Adani is allowed to build the railway line in Queensland and he owns that railway line then that would not facilitate growth; it would facilitate profits for him. Under section 457 visas, which were introduced by the ALP—do not let them criticise the Liberal Party—and which the Liberal Party say they are going to double, we will get no benefit at all. (Time expired)

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The amendment is not agreed to, but I will sum up. It is with pleasure that I rise today to sum up the debate on the Asset Recycling Fund Bill 2014 and consequential amendments. We do not agree with the amendments put forward; they are a try-on.

It is a pleasure to sum up because it gives me the opportunity to respond to the misinformation perpetuated by members opposite, as well as the crossbenchers. And it is a pleasure because it gives me the opportunity to talk about the landmark investment which the government is making in infrastructure—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I rise on a point of order.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

You just had 16 minutes. How much longer do you want?

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I claim to be misrepresented.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

There are forms of the parliament for that. There is no point of order.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Sit down, member for Kennedy; you have had your turn.

Mr Katter interjecting—

Sit down. I gave you an extra 16 minutes. He is just wasting my time. He had 16 minutes. I gave him the opportunity to have an extra 16 minutes so he should sit down.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The member for Kennedy will resume his seat.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I would firstly like to address Labor's claims that there is no additional money for roads. We are investing in major new road projects and accelerating the delivery of existing ones right across the country. That includes our $3 billion commitment to East West Link stage 1 and stage 2, both of which were opposed by Labor. When both sections are complete, the East West Link will make a meaningful difference to the transport challenges facing Melbourne and will improve connectivity across the Victorian capital.

In addition to the $1.5 billion the Australian government has committed to the eastern section, the Commonwealth government has also committed $1½ billion to accelerate delivery of the western section to enable the full benefits of the overall East West Link to be realised sooner. The western section of the East West Link was submitted to Infrastructure Australia in 2011 and was assessed as having real potential, meaning that the project addressed a nationally significant problem and is expected to improve freight efficiency and access to the Port of Melbourne.

The Australian government funding for the western section of the East West Link is contingent on the Victorian government submitting an updated business case to Infrastructure Australia for consideration in its 2014 infrastructure priority list and commencement of work by the end of 2015. The Victorian government has provided an interim business case on the western section to Infrastructure Australia. So claims of there being no analysis of the project are just disingenuous.

I am always pleased when those opposite decide to show an interest in rural and regional Australia. They certainly did not do much of that in the six years of government between 2007 and 2013. If they had visited rural and regional Australia recently they would know that there is a great deal of support for our $564½ billion commitment to the Black Spot program and the reintroduction of the successful Roads to Recovery program, which involves a landmark commitment of $2.4 billion.

I was pleased to be in Queanbeyan just last week to see the Acting Prime Minister and New South Wales Deputy Premier Andrew Stoner announce a joint funding commitment of $50 million to build the Queanbeyan bypass. The bypass will take the pressure off the existing road network, particularly in the central business district, and improve safety for residents.

Now we are told that there is no money for public transport, when right across the nation since the federal election state governments have recommitted to investing more than $25 billion in major public transport projects. The member for Grayndler also referred to the government's plans to restore independence, transparency and credibility to Infrastructure Australia. He did not quite put it in those terms, but he was certainly referring to legislation which is currently before the Senate to improve the governance of Infrastructure Australia. This government wants Infrastructure Australia to be able to get on with the job of strategically assessing the nation's infrastructure. It is true that Infrastructure Australia produces a priorities list. But it is really just a list of projects it has assessed. It is outdated before it is even published. We want an Infrastructure Australia to be able to help shape priorities and inform decisions rather than simply play catch-up, and we are giving Infrastructure Australia real work to do, conducting an initial audit of infrastructure assets right across the nation and an audit every five years as well as developing a rolling 15-year plan. If the opposition is so keen on cost benefits analysis, why did it fail so miserably to do its sums on its own national broadband network—another example of the Labor mess which we have been left to clean up.

There were claims about state fire sales. It is disappointing to hear those opposite engage in fearmongering about the possibility of a fire sale of state government infrastructure assets. That is not what it is about. This fund is a response to the reality that state governments are not divesting themselves of assets which can be more efficiently managed by the private sector to free up resources for new infrastructure projects on behalf of people who live in those states. Even in the presence of the Asset Recycling Fund, there are clear incentives for state governments, New South Wales included, to be carefully considering divestment decisions, having regard to the appetite of the market for assets and the views of the community for asset sales, and that is important. The views of the community are very important.

I would like to take this opportunity to speak on an infrastructure idea very, very dear to my heart—high-speed rail. I think you will find that it nicely encapsulates much of what was lacking in Labor's approach to infrastructure. The member for Grayndler's own high-speed rail study showed that the priority for governments should be protecting the potential high-speed rail corridor and to do that requires engagement with the states and the Australian Capital Territory. The member for Grayndler's response was to absolutely splurge $52 million on a high-speed rail authority. This government is about reducing red tape. The member for Kooyong is getting on with the great job of doing that and not creating it by adding unnecessary levels of governance and complexity for work that can be achieved without it.

This government supports the idea of high-speed rail—of course we do and we are very much behind it—but we recognise that in the near term the most effective action is to engage the states as well is the ACT on the suitability of their legislation and budgets to preserve a corridor for high-speed rail. The government, ably led in this area by the Deputy Prime Minister, will continue to work within its means to seek agreement and the ongoing support of the governments of Queensland, New South Wales, the ACT and Victoria before committing to implement high-speed rail. It should be noted that other than Labor's $52 million red tape commitment to high-speed rail, it set aside no money to implement high-speed rail over the forward estimates. I repeat: there was no money for high-speed rail over the forward estimates.

In planning to meet Australia's future transport needs, it is important to consider all transport modes, aviation, road, conventional rail and high-speed rail, to determine the best approach for Australia's unique conditions and to optimise regional development benefits. High-speed rail between Melbourne and Brisbane is expected to cost $114 billion. Labor delivered almost $200 billion of deficits. This government is lumped with $1 billion a month in interest on that debt. It is actually not the government, it is the people we serve, the people we represent—and Labor forgot those people—that have to spend on interest. The money we spend, the people have to spend on interest, could go towards a whole range of important uses including building a high-speed rail network.

But we are getting on with the job of also building an inland freight rail. We are getting on with the task of constructing the long-awaited inland freight rail between Brisbane and Melbourne, appointing former Deputy Prime Minister John Anderson chair of the implementation group to make it happen. This will enable freight to be moved from one capital to the other in just over 27 hours.

I note that Labor is moving amendments to the bill to tie the Asset Recycling Fund up in endless red tape with lots of toing and froing, further proof that Labor's answer to everything is more government red tape not real government action. These amendments should not and will not be supported. The Asset Recycling Fund Bill 2014 and consequential amendments establish a new fund as a vehicle for providing financial assistance and incentives to states and territories to invest in important infrastructure. A new fund is necessary to support the government's Asset Recycling Initiative, a key initiative which will encourage states and territories to sell existing assets and reinvest in new infrastructure which contributes to a more prosperous economy.

We saw that the New South Wales government are getting on with the job. Their budget announced this week by the member for Bega, Andrew Constance, is getting on with the job of paying back Labor's debt and getting on with the job of recycling assets with the help of and in collaboration with the Commonwealth to help boost productivity opportunities for the people in New South Wales.

Payments from the Asset Recycling Fund will also be used to fund nation building infrastructure and other national partnership agreements. Payments to other bodies will be administered by the Department of Infrastructure and Regional Development and will support important local initiatives such as the Roads to Recovery program, and we know how important that is particularly in regional areas.

Establishing a new fund to support the government's infrastructure package is sound economic policy. It allows funds being committed now to be invested so that more is available when payments become due. Entrusting the Asset Recycling Fund to the Future Fund Board of Guardians will maximise the growth of assets. The board has a proven track record in managing assets on behalf of the taxpayer. It has grown the Future Fund from around $64 billion in 2006 to more than $97 billion by the end of March 2014. The government is committed to the new fund. It will be established with $5.9 billion funded by amounts from the Education Investment and Building Australia funds not allocated to approved projects. The government will make further contributions following the successful privatisation of Medibank Private. Should we decide to engage in future asset sales, then those proceeds may also be contributed to the fund.

I would just like to respond to a couple of items that have been raised during the debate by Labor members. On the matter of the South Australian funding raised by the member for Makin, I need to quote from a letter to local government in that particular state from the Deputy Prime Minister. The letter said, 'The local government financial assistance grants program will not be indexed for three years and this special road grant to South Australian councils, which expires this year, will not be renewed. The additional funding for infrastructure investments along with Roads to Recovery, bridges renewal and black spot programs, is expected to offset those decisions.' That word 'offset' is very important, because it means they will not miss out. They are benefiting enormously from the programs that the coalition government has put into place.

We heard the member for Chifley making all sorts of allegations and concerns about Badgerys Creek. How does this government plan to meet Sydney's aviation demand? What is this government doing to build the infrastructure of the 21st century for Western Sydney? The answer to those questions is that we are getting on with building Western Sydney's first airport. Some might like to say it is Sydney's second airport, but it is Western Sydney's first airport. For more than 50 years, governments of all persuasions have talked about a second airport for Sydney, a first airport for Western Sydney. This coalition government—this Liberal-Nationals government—has ended the indecision. We have stopped the dithering and locked in Badgerys Creek as the site for Western Sydney's airport. The talk is over.

This government is getting on with the job—getting on with the job of paying back the debt and getting on with the job of building important infrastructure. That is why this particular debate is so important. This decision about Badgerys Creek is good for the economy, it is good for jobs and it is good for tourism. Most importantly, it is good for Western Sydney, and certainly the member for Chifley should get on board. The airport will be a major catalyst for investment and jobs growth in the region for decades to come. While the initial construction phase is expected to create up to 4,000 jobs, tens of thousands of additional jobs will be created as the airport grows over time. There will be 35,000 jobs by 2035, increasing to more than 60,000 by the year 2060.

Now that sounds a long way off, but do not take my word for it—where do these figures come from? Ernst and Young analysed the employment benefits of an airport at Badgerys Creek as part of a report, A Study of Wilton and RAAF Base Richmond for Civil Aviation Operations, and this analysis was based on a review of domestic and international literature on employment created by airports and a comparison of actual employment benefits of airports around the world. So we are looking at tens of thousands of jobs. That is going to revitalise Western Sydney and is going to provide so many great opportunities for industry, for business, for tourism and for the constituents of the member for Chifley and others.

We are getting on with the jobs of paying back Labor's debt. We are getting on with the job of paying back the debt and deficit legacy that we have been left after six years of Labor. In response to the member for Moreton's query about the eligibility of assets, the incentive will be determined under the national partnership agreement. Had he been listening, he certainly would have been on board with that part of this particular piece of legislation. The Asset Recycling Fund is an essential element of the government's infrastructure package announced in the 2014-15 budget to support economic growth. That 13 May statement by the member for North Sydney, the Treasurer, called 'the budget' is getting on with the job of rebuilding Australia in infrastructure and in paying down the debt. We are getting on with the job because that is what Australians expect us to do. Contrary to what those opposite would have you believe, the government has increased overall infrastructure spending between 2013-14 and 2018-19 by $16.4 billion. That is a substantial commitment in a tough fiscal environment. I commend this bill to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The question is that the member for Melbourne's amendment be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Katter, Mr Bandt and Mr Wilkie voting aye.

The question now is that this bill be now read a second time.

A division having been called and the bells having been rung—

Order! As there are fewer than five members on the side for the noes, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question agreed to, Mr Katter, Mr Bandt and Mr Wilkie voting no.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.