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

by leave—I move amendments (2), (3) and (6) circulated in my name together:

(2) Clause 18, page 18 (lines 5 and 6), omit "Minister who recommended the specification of the grant (see section 19)", substitute "Infrastructure Minister".

(3) Clause 19, page 18 (lines 7 to 16), omit the clause, substitute:

19 Recommendations about grants payments

(1) The Finance Minister must not make a direction under subsection 18(1) in relation to a grant for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.

(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project unless:

  (a) Infrastructure Australia has:

     (i) given the Minister an evaluation of the project (see subsection (3)); and

     (i) advised that there are likely to be productivity gains from the project; and

(b) if the grant is for expenditure incurred under the National Partnership Agreement on Asset Recycling—the grant relates to a transaction approved by the Treasurer for the purposes of this paragraph.

(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subparagraph (2)(a)(i) must:

  (a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and

  (b) set out any other matter that Infrastructure Australia considers relevant to the project.

(4) For the purposes of paragraph (2)(b), the Treasurer must, by legislative instrument, approve a transaction relating to the sale of all or part of a specified State-owned asset.

(6) Clause 25, page 21 (lines 4 to 7), omit the clause, substitute:

25 Recommendations about payments

(1) The Finance Minister must not make a direction under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.

(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project unless:

  (a) Infrastructure Australia has:

     (i) given the Minister an evaluation of the project (see subsection (3)); and

     (ii) advised that there are likely to be productivity gains from the project; and

(b) if the payments are for expenditure incurred under the National Partnership Agreement on Asset Recycling—the payments relate to a transaction approved by the Treasurer for the purposes of this paragraph.

(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subparagraph (2)(a)(i) must:

  (a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and

  (b) set out any other matter that Infrastructure Australia considers relevant to the project.

(4) For the purposes of paragraph (2)(b), the Treasurer must, by legislative instrument, approve a transaction relating to the sale of all or part of a specified State-owned asset.

These amendments improve governance around the way in which grants are made from this so-called Asset Recycling Fund. Amendment (2) consolidates infrastructure approvals with the minister for infrastructure. The range of infrastructure that can be approved is not restricted. Amendments (3) and (6) are critical amendments that place proper process around approvals given to projects by the infrastructure minister. These are preconditions to grants or payments from the Asset Recycling Fund, including under the Asset Recycling Initiative. That initiative proposes a Commonwealth contribution to a state or territory totalling 15 per cent of the reinvested proceeds from a privatisation. The bill provides no criteria for deciding how scarce Commonwealth funds will be prioritised to competing projects.

Labor's amendments propose to fix that. As the Parliamentary Library has noted in its Bills Digest, the strong selection criteria that Labor applied under the Building Australia Fund has not been replicated in this bill. As this bill proposes to empty out the BAF and the EIF, which also had very strict criteria around it, these amendments that Labor is moving will retain independent and transparent approvals processes around project selection. This retains the rigor that Labor had in place under the BAF and the EIF, nothing less. Good governance follows the money. It is absolutely critical that this process be got right. If these amendments are not carried it will be a blank cheque to fund whatever they like out of the Asset Recycling Fund, whether or not it represents value for money for the Australian taxpayer, a good outcome in terms of productivity, and a good outcome in terms of jobs and economic growth. That is why we put in place the structures around the Building Australia Fund and the Education Investment Fund.

Those opposite do not seem to get the idea that it is fundamental that we have proper processes in place and that money from the Commonwealth goes to where it will have the most impact on the economy, not on the margin of electorates. That is why we are moving these amendments, because we have seen with projects like the Perth Freight Link project, no cost-benefit analysis, no plans and no detail in terms of environmental assessment. Indeed, the WA parliamentary secretary responsible in the estimates process in the last week has called upon federal ministers to stop with their rhetoric without any detail. And that is the problem with this government's approach.

These amendments are absolutely consistent with the government's stated position, which is that for all projects above $100 million there has to be a proper assessment. These amendments are also consistent with the broad call for independence and transparency of project advice from important stakeholders such as the Business Council of Australia, Infrastructure Partnerships Australia, the Urban Development Institute, the Bus Industry Confederation and the Tourism and Transport Forum. They are consistent also with Labor's foreshadowed amendments to the Infrastructure Australia Amendment Bill and those we have already moved to the Land Transport Infrastructure Amendment Bill.

These amendments align with the Productivity Commission's recent finding in its interim report on the funding of public infrastructure, where they say:

The overriding message of this draft report is the need for a comprehensive overhaul of processes in the assessment and development of public infrastructure projects.

In the case of either a grant, amendment (3), or a payment, amendment (6), to a state, territory or other entity, the infrastructure minister must first have received an evaluation of the project from Infrastructure Australia and advice from it that the project is likely to produce productivity gains. IA's evaluation must include a cost-benefit analysis of the project. Of course, that must be transparent.

Additionally, for a project involving the privatisation of a state or territory owned asset and recycling of the proceeds into another asset, the infrastructure minister cannot recommend a project unless the Treasurer has approved the privatisation transaction as eligible for a Commonwealth contribution from the Asset Recycling Fund. The mechanism for this approval will be via a disallowable instrument for each transaction.

This proposed change reflects Labor's view that there are good and bad privatisations. We do not believe, unlike those opposite, that privatisation is good on each and every occasion. Nor do the Australian people, which is why we are not prepared to give a blank cheque, politically or economically, to those opposite with this existing flawed legislation. Labor believes, for example, that the Commonwealth should not reward states who are selling assets in a fire sale or without adequate regulatory protections. We on this side of the House have a balanced approach to these issues. If the government were at all fair dinkum, they would be supporting these amendments that we foreshadowed to the government.

We have seen over in the other place this week that the government had to fold their position on the Infrastructure Australia legislation because there was such pressure from those in the business community and others who understand infrastructure policy. The legislation that they had there was about undermining the independence of Infrastructure Australia. They gagged debate on the Infrastructure Australia bills last year. They still have not begun debate in the Senate and it is now June. That is how prepared they were to avoid scrutiny.

Members might remember being here till after 11 pm on the night they gagged that legislation, even though there was no urgency whatsoever. The fact that the government will not bring those bills on until next week confirms that. But these amendments go to the same principles—the same principles that the government talks about but will do anything to stop from being in the legislation. These amendments should be supported by this House. The opposition commends the amendments that I have moved.

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

The government does not support these amendments. I have been very generous today. I have given the member for Kennedy extra speaking time. I have just allowed the member for Grayndler, the shadow minister, time to speak again, and that is all good.

Mr Albanese interjecting—

I did give you the opportunity to speak a couple of times. But we do not support these amendments. I was very interested and I listened very closely to the member for Grayndler, as I always do. He talked about Labor rigour.

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

You might learn something.

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

I might learn something sometimes, but on today's occasion I did not. Well, I did learn that he talked about Labor's rigour.

Mr Albanese interjecting—

Good governance follows the money. Indeed it does, but certainly in the past six years we did not see too much good governance from Labor. We did not see too much good governance with anything, and certainly when it came to infrastructure. The member for Grayndler, who was then the minister for regional development and the minister for infrastructure, changed the funding for state roads and particularly the Pacific Highway. I think we share a common view that it needs to be upgraded. We do share a common view there, but the funding formula was changed such that it would be 50 per cent Commonwealth and 50 per cent state, whereas in the past it was 80 per cent from the Commonwealth and 20 per cent from New South Wales.

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

Shows how little you know.

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

That is true. That certainly stymied the New South Wales government in getting on with the job of building that particular road and other valuable road projects that needed to happen.

He talked about a blank cheque to fund whatever they like. This government does not believe in giving blank cheques. We believe in getting value for money—something else he spoke about. Value for money means good outcomes for productivity, jobs for growth. We did not see too much of that in the previous government, in the previous six years.

Mr Albanese interjecting—

He can interject all he likes, but we did not see too much value for money or proper processes in place. There certainly weren't proper processes in place when it came to the Building the Education Revolution—something which, on the surface of it, was a reasonable policy initiative, had it been funded properly and had it been rolled out such that there were not so many billions of dollars worth of blow-out.

The Asset Recycling Fund has been established as a dedicated investment vehicle for providing financial assistance and incentives to states and territories to create new infrastructure and boost economic growth. We are getting on with the job of helping the states, not hindering the states—whether they are government-run coalition states or indeed Labor states—through this legislation to boost productivity and to boost jobs.

The member for Grayndler also talked about job creation. In the past six months, this Commonwealth Liberal-Nationals government has boosted job numbers by more than 100.000. We have heard the infrastructure Prime Minister talk about that in question time. The member for Grayndler, the shadow minister at the table, was obviously not listening when the Prime Minister talked about the 100,000 jobs created by this side in the past six months. That is getting on with the job of helping Australia grow and helping pay back Labor's debt. If it were left unchecked, we all know—that side might not get it but the Australian public get it—it would be $667 billion. That is $1 billion each and every month in interest payments. This cannot continue—and it will not continue, because the adults are now in charge. It is six months today since we saw a boat illegally arrive on our shores. I digress. This Asset Recycling Fund is an important initiative. It has specific purposes which are consistent with the government's investment in productivity-enhancing infrastructure. This includes making funding available for the Asset Recycling Initiative and also the Infrastructure Growth Package.

This is necessary legislation. It is a mechanism which allows money to flow from realised investments through to the COAG Reform Fund, Special Account, and the infrastructure portfolio special account—things that are getting on with the job of building productivity for our nation and creating jobs and wealth not just for the cities but also for the regional areas—those regional areas which provide all the food and fibre, which I think sometimes our city-centric MPs forget. It is about getting on with the job of building the valuable infrastructure left so badly behind by Labor in its six years of government.

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

I think the proposed amendments for tighter controls put forward by Labor are pretty reasonable. I cannot speak to this legislation without giving examples. Money was spent in Queensland—and in Australia, for that matter—to build railway lines into the coalfields. That is how we got the coal industry. This was infrastructure to develop and create jobs and real wealth for this nation. Then money was used to build power stations for aluminium. It was not squandered on self-indulgence or on winning votes in Queensland. There were no votes at a little place called Gladstone—there was no-one living there at the time. This is how we got the aluminium industry and beef roads industry. They are major export items. Beef was not really very important at all until the great Jack McEwen built the 'beef road scheme'.

Another good example is my cattle station and other blocks of land that I own. I and a friend owned half a million acres. On that half a million acres I do not think any cattle had ever been run properly. There was not one inch of fencing on 500,000 acres back in 1973, 1974 or whenever it was. The bloke on the neighbouring station, Esmeralda, sold it because he thought: 'What's the use of owning a station if you can't get into or out of it?' When the roads were built, we realised that these places, which had been—to quote the great Slim Dusty—'land wasted' were not land wasted at all. It was not wasted land; it had just been land that was wasted until we put the development there. The coal industry and the aluminium industry have been on average two of the biggest export items for the last 50 years, and then there were the beef roads. They were all created by infrastructure.

I do not think these amendments will be particularly effective because I think there will be a continuation of the spending. To again quote Robbie Katter: 'What did you get for your $5,000 million tunnel? One of the leading economists in this country—I think it was John Quiggin—referred to 'tunnel vision'. Governments today cannot see the potential of a coal industry, an ethanol industry, an aluminium industry or a beef industry. They cannot see that. All they know is that they will get to work a bit faster or get home a bit faster. That is the size of their vision for their country.

Let me be very specific: my great-grandad got on a ship to America and, out of his own money, bought two huge cranes to give to the Port of Townsville. He hoped that the board, which he was a member of, would pay him back, and they did as luck would have it. But he had no authority to do what he did, and if they had not paid him, well, at least we would have a port in North Queensland. Those two great cranes created that port. His grandson, my father, and his cousin, who was chairman, served on the Townsville Port Authority. So we had a vested interest in the port authority. The point I am coming to is that the government is going to sell the port. Already major industries in North Queensland are organising to build another port somewhere else, because, if the port is privately owned, the private owner can charge whatever they like. People are not going to go to a port where they can be charged anything that the owner wants to charge them. This is a multi-use government facility, and the government has a responsibility to provide the service at a reasonable charge to everybody.

The other issue is that, if Mount Isa Mines dominate that port and effectively control it—under private enterprise arrangements they might be the owner—they are not going to let their competitors use that port—of course they aren't. Once again, as the member for Melbourne said previously, the people built that port—great people like my great-grandad—out of their own money and their own time. It took him almost a year to get over there and buy the cranes and then come back again—six months, anyway, in those days. These people did that willingly because it was the right thing to do. The port is bringing in $38.5 million a year. The railway line, which is up for sale, is bringing in $450 million. So $500 million a year is now going to go to a private corporation. (Time expired)

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

I cannot let the comments of the parliamentary secretary go unchallenged, given that he failed to address the substance of the amendments. He made statements about the Pacific Highway that simply do not stand up to scrutiny. The fact is that during the period of the Howard government the federal contribution to the Pacific Highway was $1.3 billion and during those same years the state government contribution from the New South Wales Labor government was $2.5 billion—almost two-thirds of the funding for the Pacific Highway came from the state government. The previous federal coalition government took for granted the people who live in electorates along the Pacific Highway. I did not, as a minister, and nor did the federal Labor government. As part of the economic stimulus plan, we invested massively in the Pacific Highway. During the six years I was a minister, there was additional funding for the Pacific Highway in every single budget from 2008 through to 2013, totalling $7.9 billion.

Page 13 of the 2013-14 budget papers shows a graph that outlines Pacific Highway projects. This year's coalition budget papers, on page 17 of the 'Building Australia's infrastructure' document, also contain a graph of Pacific Highway projects. They are exactly the same—every single project. There is not one extra dollar from this government for the Pacific Highway in the budget. What is worse, it has let state governments off the hook. The coalition's colleagues in New South Wales have withdrawn funding that they had allocated for the Pacific Highway, along which they hold every single seat in New South Wales. Every metre of the highway, from the Harbour Bridge to the Queensland border, is held by a New South Wales coalition member. They cut funding in their midyear forecast because they got the green light from a National Party minister, the member for Wide Bay, who is asleep when it comes to this issue.

Have a look at the list of projects in the coalition's own budget papers: Banora Point upgrade, completed late 2012; Ballina bypass, completed in 2012; Devils Pulpit upgrade, completed; Glenugie upgrade, completed; and Kempsey bypass, completed and opened in 2013—fully funded, 100 per cent, by the Commonwealth government as part of the economic stimulus plan and involving the largest road bridge in Australia. Herons Creek to Stills Road was completed in 2013 along with the Bulahdelah bypass. Then there are the projects under way. Tintenbar to Ewingsdale is more than half completed—it is funded by previous budgets and will be completed next year. Sapphire to Woolgoolga is just about completed, and perhaps it has been completed by now. It was due for completion now. It was fully funded. Construction on the Nambucca Heads to Urunga and Warrell Creek to Nambucca Heads sections has all begun. They were funded in previous budgets. I turned the first sod on the Frederickton to Euangi construction last year. Kundabung to Kempsey and Oxley Highway to Kundabung construction is commencing this year, funded in previous budgets.

There is not a single new project on the Pacific Highway from this mob opposite—not one. We have the ridiculous circumstances of the member for Lyne asking questions about this. The previous member for Lyne delivered on the Pacific Highway, as did members of the Labor Party. The coalition did not. All they have done is give a free pass to their coalition colleagues in New South Wales. They will maintain existing federal funding but because of a reduction in state government funding the project will be completed later than it would have been otherwise. It is to the National Party's shame that they have allowed that to happen.

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

I take issue with the member for Grayndler saying shame upon the National Party. Certainly I know the current member for Lyne is getting on with the job of helping to build the Pacific Highway. I take the member for Grayndler's points about funding but, at the end of the day, he can show his graphs all he likes—

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

They're yours.

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

And ours, but at the end of the day the important thing is that we do need, as a government and as an opposition, to get on with the job of building the Pacific Highway. We need to do it to save lives. I know that the member for Grayndler is genuine in his desire to build the Pacific Highway, and I did hear in my first term of parliament a very passionate and emotional speech by him about the personal reasons he wants a particular stretch of highway funded to save lives. It is critical that we do save lives.

I realise I am not talking about the amendments, but I do take exception to the comments he made about the current member for Lyne. I know the current member for Lyne is committed, as we all should be, to getting on with the job of duplicating that stretch of road. It is vital. Far too many lives have been lost on that highway for far too long. This government, through its infrastructure projects and because of the absolute necessity to build roads for the 21st century, is getting on with the job and is providing more money than has ever been provided in the past to build the roads of the 21st century. The actions of the Deputy Prime Minister, Leader of The Nationals and member for Wide Bay will ensure we are doing just that. We oppose these amendments.

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

I go to the amendments and why it is important to have a proper process around the allocation of any funding arising from this legislation. I go to the issue of the Perth Freight Link project. I ask the parliamentary secretary to consider these issues seriously when he considers the amendments that I have moved. In the budget there is a considerable allocation of money for the so-called Perth Freight Link project. I was surprised because infrastructure projects tend not to just pop out of a Weeties packet in the morning, they tend to be the subject of a long-term development process. There is engagement at the bureaucratic and at ministerial level. I had a good relationship, I must say, with Troy Buswell, the WA transport minister, and we engaged regularly about our common interests over projects like the Gateway WA project, for example, that has been under construction for two years but which the government is pretending has just begun in the last two minutes.

The Perth Freight Link project therefore surprised me when it popped out just prior to the budget. But it appears that I was not the only one who was surprised; the WA government were pretty surprised about it as well. There has been almost $1 billion allocated for this project but this is what the WA parliamentary secretary with responsibility for transport, the Hon. Jim Chown, had to say to questions in the estimates process of the Standing Committee on Estimates and Financial Operations in the WA parliament just last week, on Thursday, 12 June. In response to questions about Freight Link he said:

Look, it is a bit too early to give a breakdown. It is still under development in regard to the Perth Freight Link.

That is the Hon. Jim Chown. Then he was asked about more detail, and he said:

The commonwealth has a propensity to make these announcements, as you well know, but the reality is that the Main Roads department and this government will be implementing and designing the Roe 8 extension, and at this stage we have not actually got design plans that are worthy of public scrutiny, as the director has stated.

He went on to state some quite extraordinary positions. When asked, he said that all options are on the table because they just had not got any detail. Ken Travers, Labor's transport spokesperson in WA, said about the Commonwealth that they must have had conversations with the WA government. Again, the Hon. Jim Chown said:

Maybe that is a question you should be asking a commonwealth government representative.

It was quite extraordinary evidence given. For example, on the claims that have been made by the government, Mr Travers asked:

So you are not in a position to provide any modelling to show that 65,000 heavy vehicles will be taken off Perth roads?

The Hon. Jim Chown responded:

Not at this stage, and I think the director general has stated his reasoning really well.

Another question from Ken Travers was:

Would it be helpful, then, for the commonwealth minister to stop making claims that cannot be backed up and that you do not have the evidence to support?

This was the answer from the WA Liberal Party member of the executive responsible for transport to this committee:

The simple answer in the context of the conversation would be yes!

Here you have the WA coalition government saying can the federal government stop talking through its hat with regard to infrastructure projects, because the detail simply has not been done. What we argue is that you do the planning, you get the detail, you get the economic assessment and then you determine where the funding should go. What this amendment before the parliament today does is ensure that the government's rhetoric is able to be implemented. It is as simple as that, and I do not understand why the government is not supporting these amendments. I commend them to the House.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

The question is that the amendments be agreed to.

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

by leave—I move opposition amendments (1), (4), (5) and (7):

(1) Clause 18, page 17 (after line 23), at the end of subclause (1), add:

Note: See also section 21A.

(4) Page 19 (after line 24), at the end of Subdivision B, add:

21A Cost benefit analyses to be made public

     If a direction is made under subsection 18(1) in relation to a grant for an infrastructure project, the Infrastructure Minister must:

  (a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 19; and

  (b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:

     (i) a description of the project;

     (ii) when the project is to start and is likely to be completed.

(5) Clause 24, page 20 (after line 26), at the end of subclause (1), add:

Note: See also section 28A.

(7) Page 22 (after line 28), at the end of Subdivision C, add:

28A Cost benefit analyses to be made public

     If a direction is made under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project, the Infrastructure Minister must:

  (a) table in each House of the Parliament, within 14 sitting days of that House after the direction is made, a copy of the evaluation by Infrastructure Australia provided to the Minister under section 25; and

  (b) within 14 days of the direction being made, ensure that the following information about the project is made available on the Infrastructure Department's website:

     (i) a description of the project;

     (ii) when the project is to start and is likely to be completed.

These amendments will ensure transparency around the decisions the government makes to fund infrastructure projects. Amendments (1) and (5) are consequential references. Amendments (4) and (7) deliver transparency that is otherwise absent from this bill.

These amendments are identical and require the infrastructure minister to make public the supporting information behind a project that is approved for a grant or payment. The infrastructure minister will be required to table the Infrastructure Australia evaluation in both houses of parliament within 14 sitting days of approval. Further details of the project will also be required to be posted on the department's website.

Consistent with Labor's approach in government and in other bills before the parliament, including the Infrastructure Australia legislation and the land transport legislation, through these amendments Labor will ensure that the evidence behind the minister's funding decisions is open to the public—and this includes cost-benefit analysis. This is consistent with concerns that have been raised by many stakeholders. It is also consistent with coalition policy. So what I say to the coalition is: vote for your policy that you said that you support before the election. These amendments before the House should be supported. They will improve what is flawed legislation. I commend them to the House.

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

The question is that opposition amendments (1), (4), (5) and (7) be agreed to.