Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

The Australian government will ensure the Nepean Valley, Western Sydney and communities right across Australia will benefit from investment in high-quality, efficient and cost-effective infrastructure. This will be achieved through Infrastructure Australia conducting rigorous and sound planning to identify quality projects and to avoid wasteful investment.

Let us be clear, Infrastructure Australia will not be the decision maker; the minister will be. However, these changes will ensure Infrastructure Australia plays a greater role in the assessment of projects and provide more-strategic advice to ministers and governments. It is critical to base project selection on rigorous analysis and sound planning in order to avoid wasteful investment. Clearly, this government is focused on long-term planning based on robust evidence-based findings through greater understanding of the critical issues facing Australia's infrastructure and land transport system. With these changes the government demonstrates it is committed to building the infrastructure of the 21st century and to ensuring Australia has the productive infrastructure it needs to meet the challenges ahead. I commend the bill to the House.

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

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

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

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

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

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

In particular, the coalition promised that it would:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

It is great to have the opportunity to speak about infrastructure in this House, as it is such an important economic driver for our nation. Before getting into the detail of the bill and the very clear contrast between the government and the truly appalling record of those opposite in the infrastructure space when government, I want to reflect for a moment on why infrastructure is so important. One of the distinguishing characteristics of infrastructure is that it is an economic gift that keeps on giving, because when you build infrastructure—whether it is a road, a bridge or other important infrastructure—you build it once and 20, 30, 40 or 50 years down the track it is still delivering those productivity benefits to the economy. It therefore makes sense for government to take a very forward-leaning approach when it comes to infrastructure.

This bill is in line with a suite of different initiatives by the government in relation to infrastructure. I would highlight at the macro level the legislation in relation to the states. It encourages states to recycle assets and to invest in productive infrastructure by giving them a 15 per cent financial incentive. That is really important, because often an infrastructure project might be on the borderline as to whether or not it goes ahead from an economic basis. With the federal government providing that 15 per cent bonus to the states when they recycle assets for the purpose of creating new infrastructure, that will tip numerous projects over the edge and that will mean more than $50 billion of incremental infrastructure will be generated through that incentive to the states. That is a very important initiative.

I do want to contrast the direction we are going in infrastructure with that of the previous government, because you really cannot talk about infrastructure in this country without talking about the largest infrastructure project that has been conceived in recent years. Labor's NBN is the biggest example of grotesque mismanagement of infrastructure. We must always remind people of the extraordinary incompetence and mismanagement that was involved here. This matters because the NBN was not some small project done by a local council or a suburban progress association. The level of discipline and rigour that went into thinking around the NBN would put suburban progress associations to shame. There would be a call for the president of the progress association to resign if they had similar planning to what Labor did with the NBN. This was very, very bad.

We started out with a notion that the NBN was going to cost about $10 billion: $4.7 billion was going to be put in by taxpayers and the private sector was going to stump up with the remaining $5 billion or so. What actually happened was because there actually had not been any substantive planning in relation to the NBN, what the likely returns would be or how the $10 billion would be recouped, there was not a lot of interest in co-investing alongside the federal government. Around the same time, it became increasingly apparent to the previous government that $10 billion was not going to quite cut it. We saw this spectacle of the previous Minister for Communications, Senator Conroy, chasing the Prime Minister, Mr Rudd, around the country and trying to deliver the bad news that, 'We have got it all wrong. $10 billion is not going to be enough. We don't know how much it will be. We just know that $10 billion is not the right number.'

Peter Hartcher described those weighty conversations like this:

In those first airborne conversations, the Prime Minister barely hesitated. He decided that, if the private sector was unable to build the system, the Government would.

On fibre to the premise, there was notion that every single home in the country had to have fibre directly to it even if it had already had perfectly good cable running to the front door. On this, Peter Hartcher says:

Rudd instantly saw the attraction of this option. The big drawback? The cost. It would cost much more than the $10 billion or so for the original proposal.

Then there is my favourite line from Peter Hartcher's chronicling of that unfortunate period in our history. After committing to the project, in this discussion:

Next came the detail work.

So they went, 'We are going to do it. We are going to build the fibre to the premise, even though we do not actually need it. We will commit to doing that and then we are going to subsequently work out how much it might cost.' The number they ended up with was about $40 billion. That was also massively wrong. Really, it is about $70 billion, based on the independent analysis that was conducted late last year. $6.5 billion was spent prior to the election to cover three per cent of the population. It was just an absolute management disgrace. When public policy schools conduct case studies in the future of how not to govern and how not to purport to manage a project, this will be in the honours course. That is because it is an absolute disgrace. That is characteristic of Labor's approach to infrastructure.

I come from New South Wales, and we are a state that has been crying out for infrastructure for so long. We had 16 years of Labor inadequacy. They talked about the Parramatta-Epping Rail Link, which must have been announced four or five times, about the North West Rail Link and about lots of road projects. There were lots of announcements for the news on Sundays—always on Sundays—but they were never followed up. In New South Wales, we became a little cynical, as a people, about infrastructure projects. It has taken the leadership of the coalition government under the Premier, Mike Baird, to really get things going. That is where the federal government and its contributions have become so important.

The WestConnex is a fantastic infrastructure project and will be of huge benefit to people in my electorate. It duplicates a road called the M5 East, which runs towards the airport in inner south-western Sydney. That road is two lanes in and two lanes out; it is just not enough. It needs to be duplicated, and it will be. It will be duplicated not only because of the leadership of the state government but also because of the absolutely critical contribution of the federal government. The federal government made a straight cash contribution of $1.5 billion and provided a $2 billion concessional loan, which basically meant that the state was able to pull that project forward substantially.

My friend and colleague in St George, the member for Barton, the Treasurer, Premier Baird and I were at Beverly Hills in the electorate of Barton the other day while the first geotechnical work was getting underway on the M5 East duplication. This is not just an announcement; this is actually happening. The M5 East will be duplicated. It will happen in the next five years and engineers estimate that it will save someone driving from Beverly Hills in my electorate to the city in peak hour about 25 minutes. That is enormous. It is a massive productivity benefit. It is also of great benefit for family life, of course, because less time on the roads means more time at home with families, and that is very important.

The other important infrastructure project in Western Sydney is the second airport. I am 40 years old and for my entire life people have been talking about building an airport in Western Sydney. I think that most people on both sides of the House know in their heart of hearts that it needs to happen. It took this Prime Minister to actually have the guts to do it.

With the important local contributions of the member for Lindsay and the member for Macarthur in making sure that that project is structured in the ideal fashion, it will be built, and there will be huge road improvements in Western Sydney. We will see the upgrade of Elizabeth Drive, Bringelly Road, Northern Road and all those roads around Western Sydney near the airport. These are huge infrastructure upgrades, and they will be delivered prior to the airport being completed. So there will be an infrastructure benefit in the very near future. That is what we need, because we need infrastructure to grow the economy. We do not need talk about infrastructure, and we do not people simply saying that they support infrastructure; we need people to actually build infrastructure. That is what this government is doing.

Returning to the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014, the bill will see that Infrastructure Australia will conduct a cost-benefit analysis on projects receiving Commonwealth funding of $100 million or more. It will also require Infrastructure Australia to develop a 15-year list of priorities, and that is a very worthy endeavour because that is what we need as a nation. We need to take a step back. Instead of deciding priorities on an ad hoc, case-by-case basis, we need to strategically, thoughtfully, methodically go through and say, 'What are the infrastructure priorities?' I know what those priorities are in my part of the country, and WestConnex to the M5 East is absolutely top of the list. There are other priorities all around the country and Infrastructure Australia will work through those in an orderly fashion and ensure that we have a strong infrastructure plan going forward.

As a nation, we need to get shovels on the ground, to get the cranes into position and to create infrastructure. I have an anecdote about someone in my electorate who said to me the other day that he is absolutely sick and tired of sitting in traffic on the M5 East every day going into work. He said that it used to take him about half an hour to 35 minutes to get into the city, and it now frequently takes him an hour. When that road was created, it was frankly inadequate for the purpose at the time, and it has become less and less adequate over time. I am very pleased that in advocating the importance of the M5 East duplication to members of the government we have had success in securing that important funding of $1.5 billion in cash and the $2 billion concessional loan to the state government, because both of those things are required.

We must not allow a return to the days of infrastructure as some sort of political plaything. We cannot go back to the days of people committing tens of billions of dollars on the back of an envelope. We must have an orderly approach in this area.

The second airport initiative will create tens of thousands of jobs during the construction phase. Importantly, when the airport is completed, we estimate that Australia's GDP will increase by about $24 billion. That sounds a bit abstract; you might ask, 'What will it mean if GDP goes up by $24 billion?'

Basically it means we get more stuff done. We get more goods into Sydney in a more timely fashion and we get the flow of people into our city more quickly. We have huge opportunities in freight. Sydney Airport is quite constrained in what it can do with air freight. Bringing more freight into the Western Sydney airport will be a great opportunity. A lot of people in Western Sydney may not have to drive a long way to work, as the airport will create a substantial hub. There will be industrial development in the vicinity of the airport. New roads are going to slash travel times in the area around Badgerys Creek. We will see substantial productivity benefits.

The bill is a sensible approach to adding to our already very strong record in infrastructure development. It is a massive contrast with Labor's appalling mismanagement, principally through the NBN. I commend the bill to the House.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I was very interested in the previous contribution and the talk about the need for us to be thoughtful, careful and methodical in our infrastructure planning and not to make the prioritisation of projects a political plaything. I think the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 takes us backwards in that regard.

Infrastructure Australia was set up by the previous Labor government to ensure that we indeed had thoughtful, careful and methodical planning of our infrastructure and an assessment of cost-benefit analysis. The federal government had originally tried to avoid the commitment they made at the election that every project over $100 million would be assessed by Infrastructure Australia. They fell foul of the Senate when they initially tried to move a set of amendments to the Infrastructure Australia legislation to remove the requirement for this assessment. That was rejected.

Now they are supposedly honouring this commitment, but in the most bizarre way. The commitment now is: 'We will assess this infrastructure once we have already approved it. Once we have approved it and provided the federal funds for the infrastructure under this scheme, we will do the assessment.' What is the point of that? The whole idea of having an Infrastructure Australia assessment and determining a cost-benefit analysis and what other externalities of value there may be is that you use that to prioritise the expenditure. But what we are doing here turns the entire thing on its head. It is saying, 'We are going to prioritise and make our decisions, and after we have made our decisions we are going to go off and do an Infrastructure Australia assessment.' It simply does not make sense.

Let us look at this in the context of the project that we are supposedly going to see in Western Australia—that is, the Perth Freight Link. The Perth Freight Link was announced with great fanfare. I think it was leaked to one of the Western Australian papers in advance of the budget. Then in due course it was announced in the budget. The Perth Freight Link comprises three components: the Roe Highway extension, with eight kilometres of road, a reconfiguration of Stock Road and a reconfiguration of High Street. The Roe Highway extension makes up about two-thirds of the project's overall cost, at about $740 million. The remainder of that project is $460 million. It is a pretty sizeable item of expenditure.

After the announcement we heard Assistant Minister Briggs say at a press conference that the cost-benefit analysis of the project was 'out of the ballpark, that it is over five'. The cost-benefit analysis showed that it had a benefit-to-cost ratio of more than five to one. We subsequently found out that that was only a draft cost-benefit analysis and it was not available for anyone to see—and it was certainly not anything that could be used to found the prioritisation of the project. More significantly, it transpires that this indeed related to only one part of the project, the Roe Highway extension.

In the state parliament, after the announcement was made that we were going to get the Perth Freight Link, questions were asked of the Commissioner of Main Roads. He was asked about the estimation of the $460 million that had been allocated to the non Roe Highway parts of the project and whether or not this represented a reasonable cost estimate. Let alone the cost-benefit, was it a reasonable cost estimate? The commissioner said:

… it is too early to talk about both Stock Road and High Street because we are still looking at some different design options.

The parliamentary secretary representing the state minister 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 …

Here you have a parliamentary secretary of a Liberal government in Western Australia saying, 'We do not actually have design plans that are worthy of public scrutiny,' yet we have a government telling us that they are going about infrastructure planning in a thoughtful, careful and methodical way and that this is not a political plaything.

It is quite clear that this concept of the freight link was hastily patched together to try to cover this hole that was in the budget because they were taking out the $500 million that was in the previous budget for important and much in-demand rail extension projects in Perth. These were projects which had been committed to by the state Liberal government of the day, saying that they would be reliant on federal government support. Because they were taking that money out they had to come up with another project, so they hastily cobbled together this notion of the Perth Freight Link. This is a project which, quoting government members in Western Australia, is not at a stage where one can make a reasonable cost estimate of it because we have not actually got design plans that are worthy of public scrutiny. Yet apparently we have made a decision in our budget that this project is going to get funding. Do not come in here and talk to us about your careful, thoughtful and methodical planning. We are back to the good old days of the RONPIs—the roads of National Party importance—except this time expanded out so we get a few roads.

I put in an FOI request to the federal minister's office for the details he has of this project. The really amazing thing is that, while this is a major project which has apparently been the subject of careful, methodical and thoughtful planning, the minister apparently has only one set of emails in his office relating to this entire project. That is a pretty extraordinary set of circumstances. It is also quite amusing when we actually see the one email chain that was apparently the only thing in the minister's office about this project. It was a series of emails that started from the federal infrastructure department to the state main roads department, and their subject was 'the Perth Freight Link'. They said, 'We understand Minister Briggs is planning a visit to the site of the Perth Freight Link on Monday. Could you urgently send us some locations?' They said, 'If it can be in the electorates of Swan or Tangney that would be ideal but not necessary.' It was obviously not a political decision at all! It was clearly not a political prioritisation—it just so happened they would have liked it to be either in Swan or Tangney!

The Main Roads state agency were obviously concerned. The first email that came back said, 'Hi Allan and Peter. Can you advise if you know any more?' Then the next person sent it on to someone else, asking 'Do you know anything about this, guys?' And the next guy asked, 'Are you able to help on this? Main Roads has been approached about this. We are interested, of course, but our office has not received any contact as yet, so we are a bit in the dark.' Interestingly, this matter was not described by Main Roads as 'the Perth Freight Link'; they called it 'Truss coming here for a Roe 8 thing?'

We quite clearly have a situation where, in my view, the old, very controversial Roe Highway stage 8 project, which has been around for some 15 years, has been dressed up, covered and surrounded with a few other very expensive bits and pieces—$460 million of extra pieces—and been called 'the Perth Freight Link'. It is quite clear that there has been no detailed, thoughtful, careful or methodical planning of this at all. Indeed, what we are going to see with this project is very much the government's vision—the prioritisations will be made on a purely political basis. There will be a post decision-making process whereby these projects will be looked at by Infrastructure Australia. But it will be to undermine the very essence of this project.

We know that the government is continuing to have problems on this and of even coming to terms with the nature of this project. We had that very fabulous, very switched-on, lovely man—the assistant minister, Minister Briggs—last week telling a tunnelling conference: 'In Perth, Western Australia, we have committed to the Perth Freight Link, which is, for those of you not from Western Australia, the railway extension that will have a dedicated freight route all the way past the airport to Fremantle Port.' That is absolutely brilliant! It is apparently a railway project! Again, this goes to show the amount of thoughtful, careful planning that has gone into this cobbled-together process.

Of course, we do need more infrastructure funds in Western Australia. I just want to correct something for the record. Minister Briggs has shown that he cannot read his own budget papers. He contested my claim about WA's unfair deals. Let me spell out some of the numbers here. The Grants Commission's estimates for WA's population for 2014-15, which is the relevant figure that we should be using, is 11.1 per cent—not the 10.8 per cent claimed by the assistant minister. Secondly, WA has been allocated $4.7 billion of the total allocated budget of $45.3 billion—that is 10.37 per cent, not 11.7 per cent. The assistant minister really needs to get across the details of WA funding and show us where he got this 11.7 per cent figure for WA's share of infrastructure funding.

Even if it was 11.7 per cent, that simply is not good enough. Western Australia produces over 16 per cent of Australia's GDP. We are being absolutely unfairly dealt with under the Howard GST agreement. The only way of rectifying this in the short term is for WA to get a decent and fair share of the infrastructure budget. I will say again that the budget papers show that Western Australia will get 10.37 per cent—much less than half of the figure going to Queensland. This treatment of Western Australia is simply not acceptable.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill, which is important to constituents Australia-wide who seek to progress the expansion of infrastructure to underpin the development of Australia in the 21st century. We all have visions—for our cities, for our communities and regions, and indeed for Northern Australia—for developing potential, and a critical factor underpinning the realisation of the vision is the development of good, solid, productive, sustainable infrastructure.

The 2014 Infrastructure Australia amendment bill will amend the 2008 act to clarify legislative and administrative arrangements for Infrastructure Australia—established under the Infrastructure Australia Act 2008 and which came into effect on 9 April 2008. The amendments will essentially clarify the role of Infrastructure Australia in assessing projects of over $100 million. It is seeking to include a qualification to include proposals that are seeking Commonwealth funding of $50 million dollars toward the total estimated capital expenditure, or in relation to other proposals as determined by the minister responsible for infrastructure. The amendment will ensure that Infrastructure Australia has the function of evaluating cost-benefit analyses as part of its broader evaluation function. In addition, the amendment will also include a definition for 'proposal', obviously providing clarity for all.

The government is committed to Building Better Infrastructure—the infrastructure for the 21st century. It is part of our economic action strategy to build a strong and prosperous economy that will boost jobs and liveability for our children's' children. The budget has laid out a $50 billion dollar infrastructure investment program, for development of essential infrastructure in rural, remote, regional and urban Australia—we need roads and bridges, rails and ports to underpin development and growth and to realise prosperity well into the future. Transport challenges had been looming for some time under the previous government.

Our government's policy agenda will: target investment in productive infrastructure; seek to complete jobs faster; partner with state governments; and leverage more private investor funding. We are already witnessing investment in better roads and I am pleased for my electorate of Durack to see the following infrastructure commitments: North West Coastal Highway, Minilya to Barradale section—$174 million for upgrades; Great Northern Highway, Waddington to Walebing section—$74.7 million for upgrades; and the Great Northern Highway upgrade at Port Hedland—works are completed on the $260 million section.

Notwithstanding current commitments to fund the economic artery of Australia—otherwise known as the Great Northern Highway, which links Perth, the ports and the Pilbara—the artery needs further attention.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

Who made that decision? Who funded that?

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

We are continuing in that vein. It is the lifeline to the north—to iron ore, oil and gas, tourism and proposed new agricultural expansion. It is a lifeline to the national economy. Part of the Great Northern Highway, the road between Kununurra and Wyndham, in its current state represents both a productivity and a safety issue, thereby inhibiting development notably in pastoralism, tourism and mining and resources. We know there are many undeveloped mineral leases in the region. This poor road links with the Wyndham port, which also has latent potential, just like the Broome port—both of these are noted in Pivot north, the recently released report of the joint select committee inquiry into the development of Northern Australia. Only infrastructure planning and investment at a broad regional and national level can underpin the prospectivity of the ports as they relate to both regional and national economic potential.

Another example of much-needed infrastructure investment relates to the single lane bridges that still exist in north-west Australia, for example between Broome and Derby, again on the Great Northern Highway—not so great in parts, you are probably thinking. These seriously impact on development, including pastoral expansion and agriculture, again recommendations in the Pivot North report. Only last year I was personally impacted by the head-on collision on a single lane bridge of two cattle trucks en route to Derby from Broome. Not only does this poor infrastructure have an impact on development but also it is, of course, a significant safety issue for Durack communities.

The obligation of government is not just to fix up existing infrastructure; it is also to build the infrastructure needed to open up new areas of potential, especially in regional and remote Australia. By way of example, I refer to the proposed development of the Tanami Road, a priority recommendation for upgrade in Pivot North. This is one road that can open up areas by improving access. The west-east link section would link the Pilbara to the southern part of Tanami Road, creating a more direct route from Port Hedland to Alice Springs and giving access to mineral provinces, providing impetus to the sector. It would also support the Aboriginal communities along the road, who are often cut off from goods and services when the road is cut due to poor weather conditions.

The Tanami Road section from Halls Creek to Yuendumu would improve access to the Kimberley and benefit many industries, for example, by reducing costs to primary producers and the resources sector, creating better access to southern markets and opening a new avenue for tourism. It would create a direct freight corridor between the Kimberley and South Australia, shorten the journey by some 1,100 kilometres and 17 hours of travel between the south-east and the north-west, give greater access to the national rail network through Alice Springs, and enable more rapid resupply or reinforcement of the north-west for defence purposes, along a secure inland route.

We need to make sure that Infrastructure Australia is well placed to support the infrastructure agenda. The government has already set some priorities, including assessing project proposals that are deemed to receive government funding of $100 million or more, undertaking an audit of nationally significant infrastructure and developing a 15-year plan on infrastructure priorities. As a member of the Standing Committee on Infrastructure and Communications, we are currently undertaking an inquiry into government planning for infrastructure projects. I look forward to seeing the results of this inquiry, which I am confident will bring about positive changes with respect to how government plans to implement infrastructure in Australia.

Today I have highlighted the importance of infrastructure planning, evaluation, construction and some identified priorities. I reiterate my support for the bill, which shall clarify legislative and administrative arrangements for Infrastructure Australia. I commend the bill to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

The government is seeking to amend the Infrastructure Australia Act to implement their election promise, supposedly, that major infrastructure projects over $100 million have a cost-benefit analysis applied, as well as minor changes to the structure of the act. As the shadow minister has already indicated, Labor will move amendments to the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 to ensure that the government keep their promise to make sure projects are assessed and Infrastructure Australia has published its evaluation before funding is allocated and to ensure the proper processes of Infrastructure Australia are retained through requiring Infrastructure Australia to approve a standard method for preparing cost-benefit analyses and strengthening transparency and public disclosure of project assessments.

If we can take a step back in this debate, everyone is in furious agreement that infrastructure investment is a crucial part of our economic investment. Infrastructure investment is an enabler for further economic activity and, quite frankly, besides providing improved quality of life, is making it easier to travel around this country and to promote economic activity. We are looking for other drivers of economic growth as the mining boom comes off and we are seeing a dramatic reduction in capital expenditure by that sector.

Too often, we in this place are criticised for our disagreements, for the perception that bipartisanship is lacking. However, this is a public policy area where both sides of the House should agree. Labor understands the fundamental importance of sound infrastructure investment to ensure continued economic growth and to increase productivity. We believe that government should make sensible investments in nationally significant infrastructure and that this should be done in a timely and cost-effective way. This is, of course, why Labor created Infrastructure Australia: to give us an independent and transparent blueprint for our current and future infrastructure needs. There should be bipartisan support for Infrastructure Australia.

I now turn to the Liberal amendments to the Infrastructure Australia Act. It is entirely appropriate that the form and functions of Infrastructure Australia are reviewed and that options for reform are considered, particularly when these reforms enable more thorough assessment of proposals and more efficient delivery of projects. But to seek, as this bill does, to require a cost-benefit analysis to be conducted for major projects only after the Commonwealth has decided to invest more than $100 million does not meet this objective. Furthermore, it is a direct contradiction of their own election commitment, which clearly stated:

… we will require all infrastructure projects worth more than $100 million to undergo a cost-benefit analysis.

There is a clear tendency for this Liberal government to say one thing before an election and to do another afterward, but we believe that with Labor's help we can actually help them keep this promise. They have broken plenty of promises on changes to pensions, education, healthcare funding and superannuation. Now they are trying to break a promise on cost-benefit analysis for infrastructure projects—but, with Labor's help, we can help them keep their promise.

Labor's amendment will adjust the government's trigger point for a cost-benefit analysis from the $100 million of Commonwealth investment as outlined in the bill to the capital value of the entire project. To do otherwise would mean the government plans to commit the money before checking whether or not it is a good idea. Not only does this fundamentally undermine the current role of Infrastructure Australia, it will not produce the best outcomes for the community.    It is a simple notion: assess first, fund later—not the other way around.

It is a sad fact that the current way that this bill is constructed is symptomatic of this government's approach to infrastructure. They are more concerned with headline announcements, funnelling cash out the door, getting the Assistant Minister for Infrastructure and Regional Development, as the member for Perth indicated, into a high-visibility vest to announce things, rather than looking at what projects actually stack up. It is pure common sense to say: you assess a project before you decide whether to fund it. And to assess a project you need to set an appropriate trigger point based on the total capital value of the project, not the desired level of Commonwealth investment—and that is what Labor's amendments seek to do.

Labor is also seeking to amend the land Transport Infrastructure Act to require that payment for major projects can only be made after Infrastructure Australia has published its evaluation. We will also seek to require Infrastructure Australia to approve a standard method for preparing cost-benefit analyses and to strengthen transparency and public disclosure of project assessments. This is basically a commitment to consistency and transparency of project assessments. This is the only way to ensure all stakeholders are confident that the investment is sound. This has been called for by regulators, including the ACCC and the RBA, advisers such as the Productivity Commission and the sector more broadly, including IPA, BCA, UDIA, Moving People Coalition and environmental and community NGOs. This is vital if we are to continue the central position Infrastructure Australia has in the heart of infrastructure investment decisions.

When Infrastructure Australia was established by Labor, in 2008, it was determined that the agency should evaluate the business cases of projects, project finance options, including private/public partnerships, and manage the probity process. Now we are seeking to expand that to provisions around cost-benefit analyses. But if we do this we must do it through a proper process, not after the government has made a decision to fund, but as a precursor to any government funding decisions. To do otherwise would not only give a blank cheque to the government but it would revert to the blatant pork-barrelling approach of the Howard government, where we would see worthy projects that by all other standards were completely necessary and viable overlooked to instead favour projects with base political returns, often to the National Party. I will return to that later in my contribution.

In this case a government that could be investing in public transport is choosing to ignore that sector completely. The sad fact is that the Abbott government does not believe in funding public transport, no matter how beneficial a project may be. It will not be built, because it will not be subject to a cost-benefit analysis, because it will not have been funded. This is a circular argument that is not only illogical but will leave Australia in a much worse condition.

We only have to see this poor approach to infrastructure investment in a few projects that have already been approved by this government. The Abbott government has approved massive projects such as the East-West link, Westconnex and the Perth Freight Link, none of which have been subject to a proper cost-benefit analysis. The member for Perth highlighted the many issues with the Perth Freight Link, and I will not traverse that area again. But in the case of the East-West link and the Westconnex around $3.5 billion has already been delivered to the states for these projects well in advance of construction actually beginning. The one case that actually had a cost-benefit analysis, the East-West link, had a cost-benefit ratio of 0.8, which means that for every $1 of public investment in this project it will deliver 80 cents of economic return. We are spending $1 to make 80 cents. It is bizarre. Not even Minister Truss would see that as a good return on taxpayers dollars. Yet they are going ahead with this project, rushing headlong into committing money before the Victorian state election.

Not only do we look at the faulty cost-benefit analyses and the faulty funding of these projects, but they are able to spend this $3.5 billion by cancelling funding for two approved public transport projects that would improve the liveability of some of our major cities and would make a major contribution to our national infrastructure.

In contrast, Labor is committed to sensible and transparent investment in infrastructure projects, principally through Infrastructure Australia. The inaugural chair of Infrastructure Australia, Sir Rod Eddington, described the new organisation as follows:

It introduces a bold new approach to identifying, planning, funding and implementing infrastructure of national significance across Australia. It also introduces rigorous and robust economic analysis of infrastructure investments prior to government decision-making.

It is a sensible and transparent approach to infrastructure investment, and we are rightly proud of this direction, as we are proud of our broader record in infrastructure investment.

When the previous Labor government came to office, Australia was ranked 20th in the OECD for spending on infrastructure as a proportion of GDP. After six years in office, because of Labor's significant level of investment, Australia was ranked first. These investments include doubling the roads budget to $46.5 billion; investing $13.6 billion in urban rail infrastructure, which is more than all our predecessors combined; investing $3.4 billion in the rail freight network; and lifting road grants to local government by 20 per cent. This is in stark contrast to the Abbott government, which has frozen the indexation of financial assistance grants to local government for the next three years, meaning that grants will not be increased in line with CPI and population increases. I challenge the members on the other side, particularly those members in large regional electorates with a lot of crumbling road infrastructure, to explain this abhorrent decision to their local councils, which will be bearing more and more of the burden of maintaining roads that are crumbling as we speak.

As a representative of a regional area, I know that strategic investment in infrastructure is a major economic driver that helps to grow the capacity of areas such as the Hunter. Of course, the responsibility of both funding and delivering infrastructure lies overwhelmingly with the states, and there are a number of projects that, if left to the New South Wales government to fund solely, would never get off the ground. But there are some great examples of infrastructure investment by the last government in the Hunter region that make great sense and will contribute to the economic and social wellbeing of the Hunter region. Principal amongst them is the $1.7 billion Hunter Expressway. This is a shining example of the capacity of federal and state governments to work together to deliver a piece of infrastructure that is a remarkable benefit to the Hunter region. I would like to acknowledge the work of both the member for Hunter and the then minister, the member for Grayndler, for their efforts in bringing these projects to fruition. Importantly, in stark contrast to the East-West link, this had a positive cost-benefit analysis. This had a cost-benefit analysis of around five. For every dollar spent on it, it was going to return $5 of economic activity. We are seeing that contribution already in my region. And I was very happy for the Deputy Prime Minister to open the project. It is good that he was there and he got to see this great piece of infrastructure that they got to complete—and I acknowledge their efforts in completing it.

A second piece of local infrastructure in the Hunter region that benefitted from the Labor government, and I hope can benefit from future governments, is the Glendale transport interchange. This project is a vital piece of infrastructure for the fast-growing western suburbs of Newcastle and northern Lake Macquarie. In this one suburb 6,000 additional residences are coming into a suburb that already has a 10,000 strong industrial estate. We have a very large shopping centre with one exit and entry and we have regular traffic jams that back up for several kilometres. So, further investment, building on the $37.5 million already committed by all levels of government to this piece of infrastructure, is very necessary.

But broadly we must approach infrastructure investment through using sound economic analysis—using cost-benefit analyses and looking at the analyses first and the funding second. Otherwise we are in dire risk of returning to a much poorer sort of infrastructure policy development, infrastructure policy development exemplified by the Howard government in their regional rorts affair. The regional rorts affair saw $1.3 million given to a Queensland dairy that went bust less than a month later; $500,000 for a North Queensland hotel with bikini-clad barmaids. If a business wants to operate in that area, that is fine. If people want to go in there and have a drink, that is fine. I question why you need half a million dollars of Commonwealth funding to promote it. We also saw $6 million for an equine centre in Tamworth that was supposedly given on the basis that Tony Windsor would not have an association with that particular centre. Best of all, we saw $5.7 million for a heritage railway that went bust twice, had a derailment and had its bridge burn down.

These are classic examples of infrastructure investment under the last coalition government, infrastructure investment led by the National Party, and I applaud the National Party for wearing its heart on its sleeve. They fight hard for money for their areas. Often it is without justification or it is at the expense of projects that are more justified by cost-benefit analysis. But they owned their pork barrelling. They fight for their pork. They get their pork—$5.7 million for a heritage railway that burns down, derails and goes bust twice.

Mr Chester interjecting—

The parliamentary secretary loves the smell of bacon in the morning, and he is proud of that. I applaud their effort because they are honest about the fact that they are putting economic analysis second behind political imperatives. The unfortunate thing is that they are controlling infrastructure investment for a national government. Labor's amendments try to reverse that. Labor's amendments try to help the coalition to keep an election promise to do a cost-benefit analysis before they make their infrastructure investments, before they repeat their mistakes on the East West Link. These amendments should be supported by the coalition. This is an important bill which can be rescued. It can improve the way Infrastructure Australia operates and the way investment is made in this country. I commend Labor's amendments to this bill.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this bill at a time in our history when there is no question that investment in roads, rail and telecommunications is absolutely critical. That is something that we can definitely agree on with those on the other side of this House. The bill before the House takes a small but important step in the right direction by clarifying legislative and administrative arrangements for Infrastructure Australia, with a particular focus on cost-benefit analysis and prioritisation. This is something that the last government did not seem to know very much about. But to understand the importance of this and how the last government treated it, we need to look at the broader problem.

In my own electorate of Hume, people intuitively know we have underinvested in infrastructure, particularly in roads, rail and telecommunications, in recent years. For instance, the Barton Highway between Yass and Canberra is of grave concern to many of my constituents, as it is to me. Understandably, commuters ask: if we pay our fuel taxes, why can't we see funding to fix roads in our area? The infrastructure backlog in Australia has been variously estimated at somewhere between $455 billion and $770 billion. These numbers are almost big enough to rival Labor's debt burden. A 2012 Infrastructure Australia report to COAG identified over $70 billion worth of priority projects that we should be moving on immediately. They also identified that we are falling behind on maintaining our existing road and rail. So there is a big backlog not just in new projects but in maintenance.

Again in my electorate of Hume we saw a complete failure of investment under the recent Labor government. The NBN failure is well known, and we saw that loud and clear. It has been talked about at length in this House. We have also seen transport infrastructure failure, and a nice example—or not so nice example, as the case may be—of that is the Hume Highway which is now basically a conveyor belt of trucks in the evenings. We see the B-doubles going from Melbourne to Sydney and back because rail has failed.

Addressing this backlog is made even more critical when we look at the emerging trends in the Australian economy. First, we are clearly facing a dramatic slowdown in mining investment in this country. Mining investment grew from around $30 billion at the beginning of this century to up to $120 billion a year in the last 12 months or so. It is now falling away dramatically, aided by the antimining policies of the previous Labor government. On top of that, we have frugal consumers and we still have a relatively high dollar. Without infrastructure investment, in coming years we will not see the sort of growth and prosperity we know we need.

The second trend that we face and we should be deeply concerned about is a productivity crisis. Productivity growth has slowed dramatically in recent years. We know that capital productivity, in particular, is at the heart of this. We are not making enough investments, despite what we hear from those on the other side. We did not see enough investment in the last few years, and we have not made investments in the right capital projects. That is very clear. So Australia faces a significant challenge in the coming years. Whilst our exports are growing strongly and we are set to continue to grow those exports strongly, we will need to lift our rate of productivity growth if we are to continue to enjoy the increases in our standard of living that we have grown used to.

In a speech in November 2013, the deputy governor of the RBA, Philip Lowe, emphasised the potential for infrastructure investment to address that declining productivity growth. He said:

If this lift in productivity growth does not take place, then we will need to adjust to some combination of slower growth in real wages, slower growth in profits, smaller gains in asset prices and slower growth in government revenues and services – in short, slower growth in our average living standard. So the debate about productivity should not be seen as an esoteric one just for economists. Productivity growth matters and it matters a lot to our future living standards.

Mr Lowe went on to say:

In the years ahead, it is unlikely that Australia's comparative advantage will lie in the production of standardised mass-produced manufactured goods for the global market. Instead, we have tremendous opportunities in a range of more specialised high value-added goods and services, where it is the quality of our ideas and the quality of our execution that is the key. Whether or not we can seize these opportunities depends critically on our human capital and our infrastructure.

Later in his speech he went on to say:

The benefits of investment in transportation infrastructure are well known. Some of these are quite obvious, while others are more difficult to see, although no less important. Among the more obvious benefits is a reduction in travel times and costs for both people and goods. There can also be favourable social impacts through reducing travel stress and increasing the connectedness of communities.

Those of us who come from regional communities know that connectivity is king, and good connectivity comes from good infrastructure. Unfortunately, Labor did little to address these issues. Most importantly, Labor's infrastructure investment processes were totally politicized and lacked rigour. We know that good infrastructure investment decisions need to be depoliticised. We know that we need the rigour of cost-benefit analysis. That is something the Labor government failed dismally to achieve, and let me illustrate that. Only 14 per cent of Labor's stimulus expenditure was spent on productive infrastructure, and, of the $80 billion of stimulus expenditure, none—not one dollar of it—went to Infrastructure Australia for approval.

What irony there is in what we have just heard from those opposite about the way Labor looks up to Infrastructure Australia and to cost-benefit analyses. We need transparency and independence in our infrastructure investment. This year the Productivity Commission said:

There are numerous examples of inferior project selection and inadequate assessment of the costs and benefits of public infrastructure projects … In particular, government decisions can become politicised and may be based on inadequate information and assessment of the costs and benefits of projects …

… when the government makes mistakes regarding large public infrastructure projects, the consequences are felt more broadly by the community and taxpayers, often for long periods of time.

That was with reference to what we have seen over the last seven years of the Labor government. We know Infrastructure Australia was effectively marginalised by the Labor-Greens government, as most famously evidenced by their pre-election approval of the Parramatta to Epping Rail Link project, which did not feature on IA's list of priority projects. The Deputy Prime Minister has pointed out:

When Anthony Albanese set up Infrastructure Australia in 2008 he made it his personal lapdog, largely answerable to him.

IA was sidelined on any real decision-making, forced to play catch-up and chase its tail to justify projects Labor had already announced without consulting its expert advisory body.

What hypocrisy we are hearing from those opposite. Labor's road and rail funding projects, its big-spending response to the global financial crisis, and its infrastructure election promises were all announced without being assessed by IA. We need look no further than the NBN for a clear example of that kind of investment, with a significant impact—a huge impact—on the government's balance sheet. There was no cost-benefit analysis. We saw extreme politicisation. Indeed, it turns out that that decision was made on the back of a serviette.

We also know there is a serious problem with project funding and financing in this country. In the absence of an intervention from this government, state underinvestment in infrastructure is absolutely inevitable. Again, the Productivity Commission report I referred to earlier notes that the Commonwealth has a comparatively wider and more efficient tax base, despite heavier levels of investment from the states and territories. This has led to large transfers from the Commonwealth to the lower levels of government for the purpose of financing infrastructure. But, as Moody's told us late last year, state and territory debt levels have ballooned since 2008 and are projected to increase into the foreseeable future. That will limit the funding state governments can provide for infrastructure. Ironically, though, the financing challenge does not arise because of a lack of money available for infrastructure. We heard from the Minister for Trade and Investment this morning that many private sector investors say there is plenty of money sitting on the sidelines waiting to be invested. The issue is more a reluctance of investors to take on the construction and patronage risks and/or the difficulties of charging for the use of the infrastructure. So, looking forward, we need to find a sustainable way in which to finance our infrastructure needs over the long term. Regardless of whether it is the private or public sector doing the financing, it is likely to be easier if we consider different options for pricing, funding and prioritising transport infrastructure.

Let me turn now to the solutions to these very difficult problems. Our government has committed to delivering massive transport infrastructure investment—$50 billion by the end of the decade, the equivalent of eight Snowy Mountains Schemes. This new infrastructure will drive $125 billion of spending across the continent and support the next wave of national prosperity. Understanding the importance of this to jobs and productivity, the government has made significant commitments to additional road and rail funding in the recent budget. Of particular importance, we are providing incentives for the states to recycle assets—privatising assets they currently own and reinvesting the proceeds in new roads. This Asset Recycling Fund we will build the finances to support this government's record package of infrastructure investment; $5 billion has been committed to provide financial incentives over five years to the states and territories to sell assets and reinvest the proceeds. It will leverage significant investment by the private sector and create massive new opportunities for investors.

Whilst these are extremely important and constructive policies, we will need to go further to fund the infrastructure gap. Born and bred on the land, over many years I have had cause to unpack the issue of regional road funding, and road and rail funding more generally. I have come to the conclusion that we need to go further in solving all this. There is a remarkably simple way to do that, and that is a user-pays system that guarantees that money goes back to the owners of the roads. We already have the key elements, paid through our fuel prices, right now. Whether we drive a truck or a car, every one of us pays a certain amount of excise per litre of fuel purchased. However, the current system has two problems. First, the money collected in fuel excise and registration fees does not go directly back to the roads, and it should. We have started to change this in the latest budget by hypothecating—allocating directly—the increases in the excise back to road funding, but this is just the beginning. At the moment the owner of the road is not directly paid for their role in building and maintaining that road, whether it is the local council or the state government or even the federal government. I think we should be doing that. To me, this is the single most important principle we could apply.

The second issue is how that user charge should work. Should it be based on every litre of fuel we buy, or the distance we travel or the weight and size of our vehicle? Should we charge more at peak hours in our capital cities, when extra vehicles, particularly trucks, have a big impact on congestion? Moving towards true user charges—something that has been floated in the last 24 hours by Ian Harper, leading the competition review—would allow us to drop the fuel excise, registration fees and traditional road tolls as we embrace a system that better reflects the cost of the vehicle to road maintenance and construction. These changes will not and should not happen overnight or in one hit. We should start with heavy vehicles on targeted roads, and I am confident that we will see that from some states in the very near future. As we prove the model, we should progressively roll it out to other vehicles and across all roads. The benefits of moving down this path are broad ranging. As I said, outlined in the draft report of the competition policy review published this week, we would expect to see a large increase in road investment and easier access to finance. And, importantly, it will take the politics out of allocating road and rail funding as investors, public and private, bet on where the needs are greatest. We should see increased investment in rail where it has genuine competitive advantages as the relative cost of road and rail becomes more transparent to investors—no tolls, no excise, no regos. Some of the smartest reforms are the simplest.

For many years—since about 2007, in fact—we have seen the Labor government fail to sufficiently invest in rail infrastructure and as a government we want to address that. We have said we will invest $300 million in the Melbourne-Brisbane rail link and allocate further investment on the coastal corridor. That will take trucks off the roads; it will support a better drive and a safer drive; and it will mean fewer trucks on the Hume Highway going through my electorate. It will have the benefit of creating regional freight hubs as well. For the grain growers in the wheat belt of New South Wales, this will give many options they do not have today. They will be able to send their wheat to Newcastle, Port Kembla, Brisbane or Melbourne. The Barton Highway is also a failure of the previous Labor government; we are upping investment in the highway, including development of a staged duplication plan. Finally, our significant investments in black-spot and Roads to Recovery programs are important responses to a dire infrastructure backlog.

The Australian public deserves better. We are no longer crammed into the back seat of some kind of juvenile joy ride as we were under the Labor government—the grown-ups are back at the wheel. We know that good infrastructure investment needs to be de-politicised, and we know it also needs to focus on costs and benefits. This is something the Labor government failed to do, and we are committed to do. I fully commend this bill to the House.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to rise to speak in respect of the Infrastructure Australia (Cost Benefit Analysis and Other Measures) Bill 2014. It would be nice if the Abbott government would make good on its pre-election commitment to require cost-benefit analyses of infrastructure projects of more than $100 million, but unfortunately this bill does not make good on the pre-election commitment that was made. I remind the House of that pre-election commitment:

To ensure more rigorous and transparent assessments of taxpayer-funded projects, we will require all infrastructure projects worth more than $100 million to undergo a cost benefit analysis.

This will include dams, telecommunications, hospitals, educational institutions, energy projects and water networks, but will not extend to defence projects.

Infrastructure Australia will also be required to calculate and publish the net present value of recommended infrastructure projects and to justify why a project has been recommended and prioritised.

This bill is an attempt to convince the Australian public that that commitment is being made good, but the Australian public will not be fooled by this bill. It is clear that this government has no intention of meeting its pre-election commitment to require cost-benefit analyses on projects worth more than $100 million or to publish calculations that demonstrate the significance of projects. If the government did intend to make good on the election commitment, then the government would have voted for the Labor amendments to the so-called Asset Recycling Bill earlier this year. The Asset Recycling Bill of course was more accurately named in the Senate as the 'encouraging privatisation bill'. The Asset Recycling Bill was aimed at creating a fund to encourage privatisation of assets by the states. Labor moved amendments to require that before the moneys could be spent in that way cost-benefit analyses had to be prepared and conducted, but, as history records, the government opposed those amendments. The government did not want to make good on its election commitment for cost-benefit analyses in respect of the so-called Asset Recycling Fund—better named the 'encouraging privatisation fund'.

It is a shame that this government has failed to agree to these basic transparency obligations that the government told the Australian people it would adhere to in order to get elected. We know that this is a government that would have said anything to get elected—and in fact did say anything to get elected. It is the government of no cuts to health, no cuts to education, no changes to the pension, no cuts to the ABC and SBS—all of these things that were said prior to the federal election. What is another one? No adverse changes to superannuation—that was another pre-election promise that was made. It is a government that lacks legitimacy because it said anything to get elected to convince the Australian people that it would not take the axe to superannuation, to health funding, to education funding, to SBS and the ABC, to pensions.

What have we seen, Deputy Speaker? $80 billion worth of cuts on the government's own budget papers to health and education and changes to pensions so that people will work to 70 and the pension will no longer increase in a way that meets the real cost of living increases for pensioners. This is a government that does not care about the widening inequality in Australian society, that does not care about pensioners, that goes after pensioners' ability to meet their costs of living in blatant contradiction of its election commitment that it made in order to convince the Australian public to vote for the LNP. It is a government that has decided to make cuts to funding universities, despite its commitment that there would be no cuts to education. But what have we seen? Twenty per cent cuts in funding for universities, the deregulation of fees that mean there are going to be $100,000 degrees at the University of Western Australia and new fees for research degrees, PhDs, that will put a dampener on Australia's quest to become a genuine knowledge economy. Then there is the real interest rate that will continue to compound, meaning that if you are a woman who takes time out of the workforce to raise kids, you will pay more for the same degree than a man who does not take that time out of the workforce to raise those kids. I use the gendered language advisedly, Deputy Speaker, because we know that today it is still largely women who take time out of the workforce to raise their families. It is those women who will be adversely affected by these changes and by these cuts. This is a government that is prepared to say anything in an attempt to convince and mislead the Australian public on its intentions, but this year its behaviour has been laid bare for all to see.

What have we seen? We have seen the asset recycling bill, where there was no agreement to include cost-benefit analyses. We have seen the most rotten budget in the history of Federation, the cuts to education and health, the GP tax, the changes to pharmaceutical costs.

Mr Whiteley interjecting—

I hear the member opposite laughing. I do not think it is funny that there will be people who do not go to the doctor because of what this government is doing to health. I do not think it is funny that there will be people who do not get a prescription filled because of what this government is doing to health. I do not think it is funny that there will be kids who, because they will have to choose the price of a mortgage and the price of a university degree, will decide not to follow their dream to go to university. I do not think any of that is funny. I do not find it amusing whatsoever that working-class kids and middle-class kids are going to have these new obligations on them, this lifelong debt, this compound interest rate, the cuts to higher-education funding and deregulation of fees that will lead to $100,000 degrees and the disincentive to undertake PhDs in research. None of it is even remotely amusing, and nor is this bill.

Labor supports an independent and transparent Infrastructure Australia. That is why Labor created Infrastructure Australia in 2008, making good on a pre-election promise of Kevin Rudd. That mob over there has a lot to learn from Kevin Rudd. We promised Infrastructure Australia and we delivered on it. What did they promise? They promised cost-benefit analyses for all infrastructure projects worth more than $100 million. What are they delivering? They are putting the cart before the horse. To put it politely, they have things all turned around.

Those opposite promised they would bring in cost-benefit analyses for all projects worth more than $100 million. What have we seen? We have seen the Abbott government approve massive projects such as the East West Link, WestConnex and the Perth Freight Link that have not undergone proper cost-benefit or wider analysis by Infrastructure Australia, despite being clearly within the scope of their pre-election promise. Funds have already been paid to the states for the first two projects. No cost-benefit analysis has been done but they have handed the money over to the states, saying, 'All right, we trust you. Here's the money. Off you go.' What about the cost-benefit analysis that you promised the Australian people you would undertake? What has happened to that?

The other issue with this bill is that it seems to have a fundamental misunderstanding about what a proper cost-benefit analysis process would be. A proper process would be for Infrastructure Australia to rank projects by cost-benefit analysis and other criteria before the government decision on which projects to fund. Linking the need for a cost-benefit analysis to the question of whether a project has received a level of prior Commonwealth funding completely fails to understand that proper process. If you say, 'We're going to give the people the money. We're going to fund the project and then we're going to do an analysis to find out whether we should actually do it,' that is putting the cart before the horse in a major way and it fails to understand the proper process that major stakeholders are seeking.

My voice is nearly gone, but I still have enough voice to point out the problems with this bill. We want 'assess first and fund later' not the other way around. It is not that difficult a concept. We want this bill to actually align with the coalition's pre-election commitment. I know it is a novel concept for those opposite that you keep your promises. We want to help them keep their promises just as we want to help them make good the representations they made to the people of Griffith when they said I was scaremongering about a GP tax, when we were talking about it during my by-election campaign earlier this year. The Prime Minister and the foreign minister came into town and said, 'We have got no plans for a GP tax.' We want to help you make good on that representation you made to the people of Griffith. When it comes to this bill we want to help you make good on your pre-election commitment. It was one of the things that you said in order to get elected. We want to help you meet that, because that is what we believe in. We believe in the changes that would seek cost-benefit analyses for projects of above $100 million.

It is not just me who thinks this bill does not meet the pre-election commitment made by the coalition. The Parliamentary Library's Bills Digest for this bill, in its analysis of what the bill does, says:

What the Bill does not do is fulfil the Coalition's election promise to require all Commonwealth infrastructure expenditure exceeding $100 million to be subject to analysis by Infrastructure Australia to test cost-effectiveness and financial viability.

So do not take it from me. The independent review of the bill shows that it does not meet the coalition's pre-election commitment.

At the announcement of this legislation, Anthony Albanese, the shadow minister for infrastructure and transport and member for Grayndler, made some very salient points about why this bill does not meet the pre-election commitments of the Abbott government. He said:

Tony Abbott's promise to conduct cost-benefit analysis on infrastructure projects worth more than $100 million lies in tatters a year after he made the undertaking in a speech to Canberra's National Press Club

Mr Albanese continued:

In the 2014 Budget, Mr Abbott paid billions of dollars in advance funding to road projects like Sydney's WestConnex project and Melbourne's East-West Link, despite having conducted no proper cost-benefit analysis.

The shadow minister went on to point out the breach of the promise Tony Abbott made in his own book A Strong Australia, on page 99:

There will be a published cost benefit analysis for any infrastructure project to which a Coalition government commits $100 million …

As the shadow minister said, the commitment was repeated. Since then, Mr Abbott, the Prime Minister, has scrapped public transport projects like the Melbourne Metro and one very dear to my heart the Brisbane Cross River Rail project, which had been subjected to proper analysis and judged by Infrastructure Australia to represent value for money. Cross River Rail was a very important infrastructure project for Brisbane. What do we have now that the Prime Minister has walked away from that project? We have a second-rate bus and train tunnel that has been highly controversial in Queensland.

As the shadow minister said, prior to the election the Prime Minister was prepared to say anything to illustrate his claimed interest in infrastructure investment. But, as the shadow minister said, a year later not a single infrastructure project created by the coalition has begun and the Prime Minister continues desperately to seek credit for old infrastructure projects conceived and commenced by previous Labor governments. Do you want to talk about asset recycling? This is idea recycling. This is announcement recycling by the Abbott government. We have not seen any of those new infrastructure projects. We have not seen any making good on the commitment to cost-benefit analyses. Instead we have seen budgets allocating billions of dollars to projects that have not had the rigour of an independent cost-benefit analysis from Infrastructure Australia. This is in direct contradiction to the pre-election commitment this government made. It is part of the pattern where they said one thing before the election and have done the opposite after the election—just like the cuts to education, just like the cuts to health, just like the changes to the pension, just like the cuts to the ABC and SBS, and just like the adverse changes to superannuation. This is an opportunity to start to correct that pattern—to change this bill to require those cost-benefit analyses.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

One of the most important roles of government is to properly plan and provide major infrastructure for communities. The Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 continues to build on this government's strong commitment to building the infrastructure of the 21st century. Infrastructure is a key to unlocking economic prosperity through enhancing the productive capacity of Australian industry and business. Infrastructure is crucial to the prosperity of regions across Australia, including the New South Wales Central Coast where for too long underinvestment in infrastructure has resulted in a decline in the quality of our road systems—at a time when rapid population growth has put unprecedented demand on our ageing infrastructure. Lack of investment also meant less opportunity for local businesses, particularly in the construction industry, hence retarding growth and creating fewer job opportunities. This is why this government is committed to building the infrastructure of the 21st century—the roads of the 21st century, the bridges of the 21st century, the rail of the 21st century and the airports of the 21st century. Through these projects, we are ensuring that Australia has the productive infrastructure required to meet future demand and the creation of economic opportunities.

This government's commitment was demonstrated through our first budget, in which we laid out a historic $50 billion infrastructure plan to deliver vital infrastructure across Australia's cities, regional centres and rural communities. From the city to the bush, it is more important than ever that we get our infrastructure priorities and planning right. Every dollar spent by the federal government must have strong justification. We must demonstrate the economic benefit of investing in major infrastructure projects and not repeat the mistakes of the former Labor government, which saw little return relative to financial outlay. As the Deputy Prime Minister said in his second reading speech, we are focused on long-term planning based on robust evidence based findings and a greater understanding of the critical issues facing Australia's infrastructure and land transport system. Moreover, it is crucial that the Commonwealth work in partnership with business, industry and the states and territories to deliver quality infrastructure projects based upon transparency and reliable, independent advice.

In addition to delivering the infrastructure of the 21st century, we are also ensuring that we have a strong, independent, transparent and expert advisory body when it comes to prioritising and determining new projects. The government has been quick to put in place a robust framework to deliver our historic $50 billion infrastructure plan. The Infrastructure Australia Bill 2013 sought to implement our commitment to ensure projects with a value of $100 million or more be considered by Infrastructure Australia, the intent being to give the public confidence that the government is investing in the right projects at the right time. Unfortunately, the amendments moved in the Senate removed this condition from the eventual legislation.

The bill before the House will amend the Infrastructure Australia Act 2008 to clarify the legislative and administrative arrangements for Infrastructure Australia. In addition to the measures contained in this bill, new governance measures for Infrastructure Australia came into effect on 1 September 2014. These new measures will see Infrastructure Australia better able to demonstrate transparency and thorough analysis when prioritising projects and providing advice to government. Infrastructure Australia is implementing the key priorities tasked to it by this government, including the undertaking of an audit of nationally significant infrastructure, the development of a 15-year plan on infrastructure priorities, and the assessment of projects receiving government funding of $100 million or more. While such assessments have been the practice previously, the requirement for them will now be guaranteed by law. Importantly, the amount of $100 million will be indexed to ensure that in future years the relative cost of significant infrastructure is maintained.

The last element—the assessment of projects receiving significant government funding—is crucial if we are to avoid the types of mistakes made by the former Labor government, such as with their rollout of the National Broadband Network. The NBN is a perfect example of poor governance. The largest infrastructure project Australia has seen for decades was cobbled together over 11 weeks. It appears that those driving the policy lacked the skills and knowledge to manage the intricacies of a nationwide telecommunications project.

It was only when this government undertook a cost-benefit analysis that it became clear that the coalition's approach of using different technologies would deliver net benefits of approximately $18 billion in current dollars. Without that approach, the project would have been deemed unviable to continue. Labor's plan would have taken four years longer than originally advised, would have cost an additional $29 billion and would have resulted in an increase in consumer internet bills of approximately $43 a month. We are committed to delivering the NBN sooner, at lower cost to the taxpayer and, importantly, more affordably for consumers. This legislation will ensure that incidents like Labor's approach to the NBN rollout are never repeated. This legislation mandates that a project can only be listed in the Infrastructure Priority List if a cost-benefit analysis has been prepared.

Infrastructure Australia will also provide input and guidance on projects such as NorthConnex, which under this government is finally being delivered. I have been fighting for the M1-M2 NorthConnex link from the day that I became a candidate and have continued the fight for it as the member for Dobell. NorthConnex will not only benefit the people of the Central Coast and north-west Sydney, but it will have a flow-on effect across New South Wales. As a nine kilometre tunnel motorway linking the M1 and M2 motorways, NorthConnex will ease traffic congestion, particularly along Pennant Hills Road. It will enable commuters and freight vehicles to bypass up to 21 traffic lights, reducing travel time by up to 15 minutes. NorthConnex delivers more than just reduced travel times; it also delivers investment and jobs.

The major challenge on the Central Coast is the creation of local job opportunities to match labour-force demand. The New South Wales Central Coast is expected to grow by an additional 100,000 people by 2031, requiring more than 45,000 new jobs. For the people of Dobell who commute outside the region, not only will NorthConnex provide shorter and safer travelling options, less time in traffic and more time with their families but it will also provide job opportunities that to date have been unfeasible and unachievable prior to this government's infrastructure investment. We know this because we have undertaken a comprehensive cost-benefit analysis on this project. Substantial infrastructure projects such as NorthConnex are vital in developing a stronger and more prosperous economy to enable us to be more competitive, to be more productive and to raise our standard of living.

In addition to NorthConnex, this government is also delivering the M1 Productivity Package, which will see the widening of the M1 to six lanes between the Tuggerah and Doyalson interchanges. These measures will make life for commuter easier and increase the productivity of companies reliant on the Ml to deliver goods and services, as well as making the journey safer for their drivers. Locally, we are delivering long-overdue upgrades to roads, sporting facilities and aquatic infrastructure to unlock the Central Coast's tourism capabilities. Dobell will benefit from this government's commitment to build the infrastructure of the 21st century with $8.55 million for local infrastructure projects. Importantly, this investment enhances our local economy, drives job growth and encourages greater investment in our region. This government is working closely with local government to deliver vital upgrades to local roads.

Since the election, I have been engaging with my local community. I have been asking them to identify their biggest local issues and overwhelmingly the response has been about substandard local roads. By virtue of rate pegging in New South Wales, we have seen local government struggle to keep pace with the need to upgrade local roads. During the current financial year, the federal government will provide over $23 million to Central Coast local councils, which is to be spent on local priorities. High on this list is the upgrade and renewal of our local roads system.

As identified in our growth plan for the Central Coast, the importance of improving local transport connections is critical to accommodating Dobell's strong population growth. This provides the community with access to employment, facilities and services. In addition to the general grants provided to Wyong and Gosford's local councils, we are investing a further $2.75 million to enhance the safety and quality of local roads. This investment will afford motorists with safer access to and from the growth suburbs of Lisarow and Ourimbah by upgrading the Ridgeway and the lake-side suburbs of Tuggerawong and Wyongah via the Jensen Road upgrade. These upgrades are long overdue. Without the financial assistance of the federal government, it would be difficult for local government to allocate the necessary funds from their restricted revenue pool.

We are also building safer roads through our record $500 million investment in the national Black Spot Program. Under this program, Dobell has been allocated $1.4 million to upgrade dangerous black spots in Toukley, Berkeley Vale, Charmhaven and Holgate. Upgrades to these roads will help save lives and reduce road trauma, ensuring our local roads are safer for motorists, cyclists and pedestrians.

The government's record-breaking infrastructure investment extends beyond roads. In Dobell, we are also seeing the sea infrastructure of the 21st century underway. The Norah Head boat ramp is Dobell's only sea-access boat ramp. The boat ramp plays a vital role in supporting our tourist and fishing economy by drawing locals and visitors alike to our magnificent beaches and coastline. Our $700,000 investment has enabled Wyong Shire Council to commence necessary repair work on this $3.25 million project, with completion due early 2015.

I am also pleased to say that work is progressing on the Tuggerah Sporting Precinct. This project was included in our growth plan for the Central Coast because this is a project that will not only deliver state-of-the-art sporting facilities but also important economic benefits to the Central Coast through increased sports, tourism and, importantly, more jobs. Historically dependent on manufacturing and tourism, our region has felt the pinch of tightening economic conditions and the increasing affordability of international travel.

But we have much to be proud off. We offer a beautiful natural environment, crowned by Tuggerah Lakes, which attracts tourists over the summer months. But our challenge is to generate year-round tourism, which will sustain local business operator outside of the summer months. This challenge can be addressed through growing our sports tourism economy. I want to see Dobell become the choice destination for state and national sporting competitions. Our investment in the Tuggerah Sporting Precinct will enable the hosting of regional and national sports events on the Central Coast. I will continue to support this proposal and the advancement of sports tourism on the Central Coast, as it is critical to our region's prosperity and a catalyst for employment opportunities.

When this bill talks of the rigour of its prioritisation of projects, the proposed Central Coast regional airport comes to mind. The New South Wales Central Coast is one of the eighth largest regions in Australia, yet we are the only one not serviced by a regional airport. This government is working alongside local and state governments to guide necessary regulatory and planning issues, whilst demonstrating transparency and a coordinated approach across the jurisdictions. While the first flight from a Central Coast regional airport is some years away, this project will drive investment, deliver new infrastructure, create jobs and have a positive impact on the Central Coast economy. Sitting within the major transport corridor of the M1 Pacific Motorway and the Northern Rail line, this aviation infrastructure will act as a magnet for industry to establish and invest on the Central Coast.

I would like to thank the Deputy Prime Minister, the Honourable Warren Truss, and the Assistant Minister for Infrastructure and Regional Development, the Honourable Jamie Briggs, for their support and commitment to the Central Coast region. I am proud to be part of the Abbott infrastructure team, which is addressing the needs of communities across Australia.

This government is delivering significant infrastructure projects nationwide and to the people of Dobell. Broadening the reform agenda and actively collaborating transparently with stakeholders can only improve economic growth. Under the infrastructure Prime Minister, we are seeing investment in projects that will leave our communities—including the New South Wales Central Coast community—better off in a variety of ways. By creating safer roads, improving access to tourism, supporting infrastructure, and commencing long-term planning and investment in improving a major transport node, we are doing what we were elected to do; we are delivering.

There will always be more work to be done. This bill will ensure that when the federal government commits to a major infrastructure project it will be assessed and delivered against robust criteria including value for money and, importantly, the best interest of our nation and our communities. I look forward to continuing to deliver the infrastructure of the 21st century to Dobell. I commend this bill to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I rise to speak on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. When it comes to infrastructure, the Abbott government is nothing more than a massive let-down. It promised a Rolls Royce and delivered an old bicycle with a flat back tyre.

Before the 2013 election, the then opposition leader, Tony Abbott, made the following promise:

There'll be cranes over our cities and bulldozers working on big infrastructure projects such as WestConnex in Sydney and the East West Link in Melbourne that will be under way within 12 months of a change of government.

I live in a community through which the proposed WestConnex freeway will come. The WestConnex will come through the electorate of Kingsford Smith, but do we see any cranes in the sky associated with WestConnex? Of course not. Do we see any bulldozers on the ground working on this project? Not at all. Another broken election commitment from this Abbott government.

The facts are that, despite bold statements, the Abbott government has failed to begin work on a single new major project that was not conceived, approved or funded under the previous Labor government. It was Labor that put in place the infrastructure projects that this Abbott government is now out around Australia claiming as their own—hypocrisy writ large when it comes to infrastructure.

I accept that it is probably entirely reasonable that a new government would not have major infrastructure projects up and running within a period of one year of being elected. That is particularly reasonable if such a government were to undertake proper cost-benefit analyses of projects and undertake robust planning and assessment of those projects. The issue that we have with this government on a number of policy areas, including infrastructure, is why would you make the commitment to the Australian people that you are going to have major projects, such as WestConnex, up and running within 12 months? Why would you say that? Why would you mislead the public, march them down the garden path and offer up the proverbial sandwich when it comes to infrastructure? It is misleading to the Australian public, and it amounts to a resounding failure by this government to do what it intended to do.

That failure was recently highlighted for all to see when the Deputy Prime Minister, Warren Truss, responded to a question in this chamber about whether he could name any project funded by the coalition that had started construction within the last 12 months consistent with the commitment that was made by the Prime Minister. He pointed to five projects, including Melbourne's East West Link and Sydney's WestConnex road project. The problem is that every single one of those projects had originally been funded by the former Labor government or was still in the planning stage.

In furtherance of their illusive approach, the government has handed $2 billion to the New South Wales government for the WestConnex and $1.5 billion to the Victorian government for its East West Link. Neither of these projects has been subject to a proper cost-benefit analysis prior to the payments being made, yet proper cost-benefit analysis was what this government promised in its Our Plan: Real Solutions for all Australians pamphlet prior to the last election.

The WestConnex project is an important infrastructure project, despite the fact that it has not been subject to cost-benefit analysis. The project comes through the electorate of Kingsford Smith. In our community, we are also subject to freight and increasing truck movements from Australia's largest seaport. The busiest seaport in this country is Port Botany in our community of Kingsford Smith. Two million containers a year are moved at that dock. Since the O'Farrell government privatised Port Botany, the cap on container movements of 3.2 million containers has been removed. That is going to mean a massive increase in the number of trucks on our local roads. The number of big trucks—which damage the road, are quite noisy, and disrupt families who are living beside the port—is going to increase by a large magnitude when this port gets up and running to its full capacity. Here we have the busiest port in the country and a brand-new road construction project that goes right past the port. Does the road link up with the port under the current proposal? No, not at all. It does not link up with the largest port in Australia.

This has not gone unnoticed. The Australian Logistics Council, which represent the country's biggest trucking and transport firms, have raised concerns about the failure of Port Botany to connect up with the WestConnex project. They say that it undermines the economic potential benefits of the project, and they are exactly right.

In a recent speech, the chief executive, Michael Kilgariff, highlighted the industry's concern that WestConnex 'does not actually go to Port Botany'. An advance copy of the speech provided to Fairfax Media states: 'In fact, it will completely bypass the port, and the port precinct, by some distance to the port's east. I appreciate that there are some significant logistical issues having the motorway run via the port, not to mention the cost of connecting the road to the port, but it is disappointing from a freight efficiency perspective that the motorway did not run further into the port area.' I could not agree with him more. This is the point about proper cost-benefit analysis and it is the crux of the bill we are debating in the chamber this evening. If there is a proper cost-benefit analysis of this project you would have to argue that it must connect with Australia's busiest container port to maximise the economic benefits. Unfortunately, that has not occurred under this government, despite the promises of a proper cost-benefit analysis. That is why this bill requires amendment.

The coalition's attempt to legislate for a cost-benefit analysis of major infrastructure projects, particularly WestConnex, comes too late. This bill means that a cost-benefit analysis of projects worth more than $100 million will occur after the allocation of funding, not before. Again, this is highlighted by the deficiency in the WestConnex project. As the shadow minister, Anthony Albanese, has said, 'Commonwealth funds should be invested in projects with the greatest capacity to enhance the nation's productivity.' That is a point that the Australian Logistics Council agreed with when they were making the point about WestConnex not linking up with Port Botany. The government should listen to what the shadow minister says. They should listen because he is right. Right now we are witnessing a re-hash of Howard-era pork-barrelling when it comes to an infrastructure priority list.

On top of the wrong priority list, one which puts the Liberal Party's interests well before Australia's interests, we see an Abbott government whose first act was to cut billions from public transport projects identified by Infrastructure Australia as the most efficient investments. So not only do we get the Howard-era, non-productive priority list; we get the Howard-era under-investment in our nation's infrastructure.

The Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 seeks to undertake prior cost-benefit analysis of major infrastructure projects—over $100 million—and to make other changes to the structure and operation of the act. Labor supports an independent and transparent Infrastructure Australia. That is why we created it in 2008—to take the politics out of decisions related to where particularly federal funds should be invested in infrastructure to improve the economic and productive capacity of the nation. We supported the amendments moved by the transport minister in June to retain IA's independence. These amendments are now part of the act.

This bill shows that the government just does not understand the process of proper project selection. Proper process requires IA to rank projects by relevant subjective criteria prior to a government decision on which projects to fund. Labor will move an amendment to relate the $100 million to the capital value of a project rather than to the level of Commonwealth funding. The opposition's amendment will actually fulfil the coalition's own election commitment. I quote directly from page 11 of The Coalition's Policy to Deliver the Infrastructure for the 21st Century:

To ensure more rigorous and transparent assessments of taxpayer-funded projects we will require all infrastructure projects worth more than $100 million to undergo a cost-benefit analysis.

You will note that it says projects with a value of more than $100 million, not projects where the government contributes $100 million. That is a very important distinction. The proper process is to assess first, then fund later—not the other way around. This assess first, fund later sequence aligns with Labor's already legislated process for the Building Australia Fund. In fact, it is law. Sections 64 and 116 of the Nation-building Funds Act outline that that is the manner in which assessments should take place.

The Sydney Morning Herald reported on June 12 this year that coalition electorates were favoured three to one in the Abbott government's infrastructure commitments. Including the infrastructure projects which are not new but which have received more funding under the incoming coalition government, such as the Warrego Highway in Queensland and the Swan Valley Bypass in Western Australia, there were a total of 50 projects benefiting coalition electorates. In comparison, the majority of projects which lost federal funding in the 2013 election were in non-Liberal electorates, such as Melbourne Metro rail in Victoria.

The article goes on to quote Monash University professor of transport, Graham Currie, who said the government had to decide whether it was going to be political or professional. The article states:

"A real truth is that there's always a bit of a silver lining or a bit of gold plating around your own electorates [but] I'd like to point out that a three to one ratio is to a new level," he said.

Professor Currie said Australia's independent body for infrastructure decisions, Infrastructure Australia, was not being used by the current government to decide which projects to fund.

These criticisms are not new, but they should be listened to.

I began this speech by saying that when it comes to infrastructure the Abbott government has been a let-down. This government can restore faith with the Australian public. They can do that by supporting Labor's proposed amendments to this bill, which will provide the process and the structure needed to provide the right projects for Australia's future. I commend the amendments to this bill to the House.

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I am pleased to be here tonight to speak on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. Prior to the election, we in the coalition said we would ensure that Infrastructure Australia would be: (1) a strong, independent and transparent expert advisory body; and (2) able to deliver quality independent advice on infrastructure proposals. This government believe that a function of Infrastructure Australia should be to conduct a cost-benefit analysis of nationally significant infrastructure projects which receive significant Commonwealth funding.

The purpose of this bill is to deliver on the coalition's election promise to strengthen the role of Infrastructure Australia and to create a more transparent, accountable and effective adviser on infrastructure projects and policies. We remain committed to broadening the current infrastructure reform agenda in collaboration with jurisdictions and industry to improve productivity and drive economic growth. The bill will amend the Infrastructure Australia Act 2008 to include the requirement that Infrastructure Australia undertakes evaluations of proposals for infrastructure projects which are of national significance and that involve Commonwealth funding of at least $100 million and ensures that cost-benefit analyses inform the evaluation of the proposals. The passing of the bill will bring into effect an important coalition election commitment to: ensure better infrastructure planning; ensure more rigorous and transparent assessments of taxpayer funded projects; and develop a much firmer and clearer infrastructure plan for Australia's future.

In the coalition's policy to deliver infrastructure into the 21st century, we committed to ensure that every project with a Commonwealth contribution of more than $100 million, apart from Defence projects, undergoes Infrastructure Australia's robust scrutiny and analysis. These projects might include dams, telecommunications, hospitals, educational institutions, energy projects or water networks. The coalition government have already tasked Infrastructure Australia with some key priorities, including: assessing projects receiving government funding of over $100 million; undertaking an audit of nationally significant infrastructure; and developing a 15-year plan on infrastructure priorities.

In November 2013 the government introduced the Infrastructure Australia Amendment Bill 2013 to make Infrastructure Australia an independent governing entity. It is now a truly independent truly independent advisory body, with a CEO responsible to a board. It has been given a mandate to identify Australia's long-term infrastructure needs for a rolling 15-year plan to be updated every five years and to get ahead of political decision making by assessing projects before choices are made and announced.

The coalition government is committed to building the infrastructure of the 21st century to ensure Australia can meet future transport challenges. In the 2014-15 budget, we laid out a historic $50 billion infrastructure investment program to deliver vital transport infrastructure across regional centres and rural communities, as well as our cities. Treasury analysis confirms that investments will also leverage more than $125 billion in the new infrastructure investment. This commitment is part of an economic action strategy to build a strong, prosperous economy, boost productivity and create thousands of new jobs.

Previous governments left my electorate of Flynn with a huge infrastructure backlog, but this government is moving swiftly to see projects accelerated and completed. You need look no further than the Queensland national highways. This government is well on its way to fixing the Bruce Highway. It was identified by the Productivity Commission early this year that previous decisions were made without proper cost analysis. Just look at the NBN, as an example. In Flynn, there is still much to do, and I have no doubt that this will be confirmed by a robust cost-benefit analysis of proposed projects. The Dawson Highway between Biloela and Gladstone has long been neglected and is in urgent need of investment. This is the heart of the Central Queensland cattle country. Would you believe that in the space of 120 kilometres there are five bridges that have load limit restrictions and B-doubles cannot even use this road? We need these roads to take B-double weights to transport our cattle around.

Investment would open up opportunities for direct export of agricultural and other products through the Port of Gladstone, which is currently underutilised and was previously used as a coal port only. Other roads and transport corridors that need urgent attention to facilitate cost-effective investments in agriculture and industry include: the Springsure-Tambo road—I get plenty of complaints about the condition of that road; the Rolleston-Blackwater road: and the Bauhinia Downs-Woorabinda road.

This government has put in place a policy agenda to: target investment in productive infrastructure; complete projects faster; partner with state governments; and leverage more private sector investment. Building better road and rail infrastructure will promote business opportunities in regional areas such as in my electorate of Flynn. It will help to cut fuel costs and reduce travel times so business and agriculture can prosper. That means jobs, further investment and a better economy for all Australians. The government is determined to reform the way decisions are made to prioritise new infrastructure projects, because failure to invest in infrastructure will limit our ability to grow, to provide business opportunities, and to provide jobs and economic prosperity

Our infrastructure commitment is $16.4 billion more than Labor promised in their term of government—and is without Labor ' s usual caveats on projects that prevent them getting off the ground. We do not want to see that happen again. We are making sure that Infrastructure Australia is able to better demonstrate transparency and rigour in its prioritisation of projects and its advice to government. Infrastructure Australia is already assessing projects which involve Commonwealth funding of at least $100 million and will make public the details of its evaluations.

Work on the promised national infrastructure audit has already commenced in consultation with state and territory governments. The audit will feed into the 15-year infrastructure plan, expected to be delivered in early 2015. The coalition government will give detailed consideration to Infrastructure Australia ' s advice on these needs to help inform decisions on future infrastructure investment. Infrastructure Australia will publish its reports on its website as transparent advice for the government to consider when allocating its infrastructure funding. Australia ' s future growth will be significantly influenced by our capacity to deliver more appropriate, efficient and effective infrastructure and transport.

Investment in nationally significant infrastructure is central to growing Australia ' s productivity and improving the living standards of Australians now and in the future. To maximise productivity improvement through investment, funding must flow to projects that yield the highest benefits. To avoid wasteful investment—I refer to the roof batts program, which led to 200 houses burning down and four young men losing their lives, one in my electorate—it is critical to base project selection on rigorous analysis and sound planning. We are focussed on long-term planning and developing a greater understanding of the critical issues facing Australia ' s infrastructure and land transport system . D espite the coalition ' s reforms to Infrastructure Australia, it remains an advisory body—but it is a key advisory body with an independent view. It will not be the decision maker in terms of funding allocation. That responsibility will remain with the government of the day. I commend the bill to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I support the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. The amendments in the bill seek to restore the independence and transparency of Infrastructure Australia. This is not the first time I have had the opportunity to speak on this bill in this parliament. On several occasions people on this side of the House have tried to get the government to restore the independence and transparency of Infrastructure Australia. Infrastructure Australia was created in 2008 to ensure that projects were based upon need, based upon the country's priorities, and not based upon political opportunism. There is no greater example of that than in Victoria, where the funding for a massive project—the East West Link—has been put ahead of everything else. Funding of about $8 billion from state Liberal and National and federal Liberal and National governments is going towards a tunnel that will not solve Melbourne's transport problems. That is funding that could have gone towards our regional road and rail infrastructure.

The bill before the House demonstrates the stunning failure of this government to ensure proper process with project selection, and it also ensures there is a cost-benefit analysis for any project that the Commonwealth funds. Proper process requires Infrastructure Australia to rank projects in order of need and priority. It links the need for a cost-benefit analysis to Commonwealth funding—the project must pass the cost-benefit test before it receives funding. This government has allocated funding first when it comes to the East West Link and discussion about the cost-benefit analysis has taken place second.

Labor will move an amendment to relate analysis to a $100 million capital value of a project rather than a level of Commonwealth funding. This is important because we need to consider the project as a whole. It is important that within the proper process we assess first and fund later. That is how we ensure that we are getting best value for the taxpayer's dollar and that we are addressing projects in order of need and critical importance.

Linking the cost-benefit analysis to the commitment of Commonwealth funding means that public transport projects will also be prioritised. As we have heard from this government on several occasions, they do not believe it is their responsibility to fund the public transport networks. This is just such a cynical view of how our country functions. Our country needs to ensure that we have funding and investment in both public transport and road usage. The best outcome for our country is a combination of good roads and good rail to ensure that people can get safely to where they want to go and also to ensure that our product and services can get from A to B in the safest and fastest way possible.

As I have mentioned, the greatest example of why these amendments are so necessary is the East West Link in Melbourne. We know that the Liberals, whether they be state or federal, are obsessed with Melbourne based transport road projects, leaving behind the importance of suspending funding on our regional roads and regional rail. At a state level, the Liberal-National government are spending $8 billion, which includes some advanced federal funding allocated to them for the East West tunnel, leaving precious little funding available for vital regional rail projects. Yes, they have put a couple of million dollars into this project or a couple of million dollars into that project, but it goes nowhere near the $8 billion investment that is going into the East West tunnel.

Let us just remind people about this tunnel. There are very few people in Melbourne who actually travel from east to west in the inner city. There is very little product on that side of Melbourne that needs to go from east to west. The biggest solution to the traffic problem in East Melbourne is a rail link to get the people living in the east into the city. The reason why it is a tunnel that goes nowhere is that people end up in exactly the same traffic queue once they turn off to try to get into the city. The East West Link tunnel is a classic example of the government not wanting to do a cost-benefit analysis. They did not want to see the business case for the tunnel; it was about appeasing voters in the east.

This project demonstrates why it is so important that Infrastructure Australia maintains its independence and transparency and that it continues to play the role of prioritising infrastructure projects in Australia. Instead of allocating funds to our regional highways, arterial roads, local roads and regional roads, they are being allocated to what has been described by many as the 'dud tunnel'. This tunnel, as we know, is also going to displace a number of people who are currently living in the area. It has been a rushed project that has caused great concern within the community. If there had been a process whereby stakeholders had been able to engage before the maps of the tunnel had been released, we could have avoided the conflict that is going on right now in Melbourne around this project.

Wasting money is what nobody wants. It is the federal government who needs to take responsibility for strong cost-benefit analyses of projects on behalf of the Australian people. The Prime Minister does not believe that it is the role of the government to do this. Last September in the Age he said that he did not see the need for the East West Link business case. The journalist went on to report in the Age that the government will hand over $1.5 billion in funding for the tunnel, without seeing the full business case. This is from a government that claims to be economic marvels and rationalists! They hand over $1.5 billion in funding for a tunnel that has not had a cost-benefit analysis done on it and that will not solve the problems of Melbourne. They hand over funding without seeing the business case. Now the government is making an advanced payment to the state of Victoria to help fast-track the project. For those who do not know, there is a state election in Victoria. So this is another case of pork-barrelling and another reason why we need to see an independent, transparent Infrastructure Australia that can put forward the priority list for our country.

Good roads and rail are critical to regional communities, and this funding of the East West Link could have gone to our region. Take Mildura, where we have a freight rail. It has become so degraded that freight is leaving Mildura at less than 15 kilometres per hour. The whole of regional Victoria whether in the east, north, north-west, north-east or west, there is product we are trying to get to port. That is why it is so critical to invest in the roads and rail infrastructure in our region. This $8 billion could have actually helped get that product to port safely. When we talk about roads in our region, the Calder Alternate Highway going north of Bendigo is a hazard. There have been number of accidents on that road already this year. If the government were serious about getting value for money, if the government were serious about supporting and growing our agricultural industry, they would invest in the roads and infrastructure that would help get our product to port. That is not an east-west link tunnel.

The only major infrastructure project that will benefit Central Victoria is the Regional Rail Link, and that was funded by the former federal-state Labor governments. To be honest, the state Liberal-National government had to be dragged to this project kicking and screaming. It is also a good example of why we need Infrastructure Australia. It is an example of a project that did have a strong business case, that did have a strong cost-benefit analysis and that was a priority for the region. The former federal Labor government partnered with the former state Labor government and invested $4.4 billion in building the Regional Rail Link—the largest Commonwealth investment in urban public transport in Australia's history. Why I say 'urban' is that it provided a direct line. So once the freight and passenger rail got to the outer suburbs of Melbourne, it had a direct link into the city and did not get stuck behind the metro traffic.

It is the biggest rail project in over 80 years, and it is the first rail project in Victoria in 80 years. It took Labor governments at state and federal level to realise that. It was through the prioritisation of a body like Infrastructure Australia that it was made to happen. When completed, the Regional Rail Link will provide a capacity for an extra 23 Metro peak services each morning and evening thus allowing more Victorians to have sustainable transport. So this one regional rail link does not just help regional travellers; it does not just help regional product to get to port; it also helps Metro because it frees up the Metro lines to allow Metro travel.

Congestion is the handbrake on the economy, and currently it is costing the Australian economy $13 billion. It is something that every speaker recognises. The question is: how do we tackle that? How do we ensure that we have the infrastructure priority list to make sure that as a country we are tackling this issue? These decisions cannot be done by pork-barrelling or election spins or election cycles. These decisions must be prioritised by an independent Infrastructure Australia where we have a cost benefit analysis and a business case. It is how you get projects like the Regional Rail Link off the ground as opposed to the east-west tunnel that we are currently facing in Victoria. The Commonwealth government should be investing in an integrated transport system that combines both road and rail. The federal government does have a role to play in investing in rail, and to suggest that we do not is narrow-sighted. If we want to be able to get more people onto rail to free up our roads for freight, then we need to have federal government investment in rail.

It is also why we need the independent and transparent Infrastructure Australia. Among the other areas that need to be considered when it comes to these massive projects is, for example, procurement. The Regional Rail Link created a lot of jobs in Victoria. The construction space created 4,000 jobs and, because that tender process was done—started by the former Labor government and at a federal and state level—apprenticeships were created. Local jobs were created. There was procurement where small businesses and local businesses were able to tender for that work.

But what we are seeing with the Regional Rail Link, and through some of the complaints that I have heard, is that if the tender process goes ahead great big consortia from around the world will tender for that project and local businesses are concerned that they will miss out on that work. Last week I visited Tylden Equipment in Kyneton. They build cement plants, and for a project like the East-West Link they would build the cement plant that makes the cement for the tunnel. They are worried that because they are further down the supply chain and because the project could go to a major international consortium that could bring over the cement plant and put it together here at the site, Tylden would lose that opportunity to build the cement plant for the project. That particular place employs 20 employees and a contract to build the cement plant for the East-West Link would secure work for that facility for at least six months. So when we talk about major projects, we need to consider procurement and ensuring that through the supply chain contracts are going to local providers if they are able to provide those services.

This bill is about ensuring that we restore independence and transparency to Infrastructure Australia. It is about ensuring that Australia gets the projects and the transport routes it needs in the order it needs them. It takes away the pork-barrelling that we have seen in the past. It ensures that regardless of who is in those seats or regardless of the political party we are building the infrastructure that we need for the future. As I have said, at the moment regional Victoria is being dudded by this government and is not getting its fair share of funding from this government when it comes to building the major regional road and rail infrastructure it requires.

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

I am very pleased to rise to speak on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. This is an important bill which will provide clarity about the role of Infrastructure Australia and ensure that cost benefit analyses are entrenched under the Infrastructure Australia Act. It will implement the government's promise made at the 2013 election that Infrastructure Australia will assess projects with a capital expenditure amount of $100 million or more.

In the time available to me today I would like to make three points, firstly, that the policies of the previous government, the Rudd-Gillard-Rudd government, in relation to Infrastructure Australia involved some sensible aspirations, aspirations that sadly were not reflected in reality. Secondly, I want to argue that the saga of the national broadband network is a good example of why it is so important to have a cost benefit analysis before a major infrastructure project. Thirdly, I want to highlight that the measures in this bill will entrench the role of cost benefit analyses in the process overseen by Infrastructure Australia.

Turning to the first point, the previous government stated some high-minded aspirations in relation to Infrastructure Australia and the way that it would work. Infrastructure Australia was announced by Kevin Rudd in 2008 and at the time it was said that this new statutory body was to have three key objectives: to conduct audits on all aspects of nationally significant infrastructure, in particular water, transport, communications and energy; to draw up an infrastructure priority list involving billions of dollars of planned projects; and to advise government, investors and infrastructure developers on regulatory reform aimed at speeding up projects.

A key principle articulated by Infrastructure Australia in all of its materials was the importance of cost benefit analysis. Indeed, that principle was reflected in some of the things that were said more broadly by the Rudd-Gillard-Rudd government. In the 2008-9 budget, the then government—from memory, at that stage it was only the Rudd government and was only later to achieve its full magnificence as the Rudd-Gillard-Rudd government—stated that efficient public sector infrastructure investment required 'a commitment to transparency at all stages of the decision-making process'. Sadly, that high-minded aspiration was not lived up to and within the following year the then government failed to release the cost-benefit analysis of the 15 projects with a total investment value of $80 billion that were selected for partial government funding in the 2009-10 budget. Six of these projects, in fact, were not on the priority list established by Infrastructure Australia. Even more troubling is that Labor decided that it would build a national broadband network, a network whose culmination we now know—based upon analysis conducted by NBN Co and released publicly just before Christmas last year—would have involved an expenditure of well over $70 billion, but there was no cost-benefit analysis. And yet Infrastructure Australia issued guidelines which articulated its stated principle of the primacy of cost-benefit analysis. Infrastructure Australia said it:

… will only give advice to governments—often in relation to hundreds of millions of dollars of public funds—on the basis of a comprehensive and robust evidence base.

At the same time, throughout the time of the previous government, there was in place the provisions of the best practice regulation handbook, which said that the Australia government is committed to 'the use of cost-benefit analysis to assess regulatory proposals to encourage better decision making'.

Cost-benefit analysis is important for a host of reasons. We know that, sadly, there are always more calls on government funding than government is able to meet. Therefore, there is a need to prioritise the projects which government is considering funding. Clearly, a rational basis on which to prioritise funding is to have regard to a formal analysis of the likely benefit to be delivered by the project and weigh that up against the likely cost of the project. This is summarised, of course, in the notion of the benefit-cost ratio. It is very important to measure the costs and benefits of different policy options, including, of course, indirect costs or benefits such as gains accruing to the community rather than to individuals—that is to say, public gains rather than private gains—on a common basis so that these costs and benefits can be fairly compared. Unfortunately, the previous Labor government—the Rudd-Gillard-Rudd government—failed to live up to its bold claims and stated aspirations in relation to both Infrastructure Australia and the cost-benefit analysis as a principle. Despite the bold rhetoric, the profligate spending of the previous government meant that it was soon the case that Infrastructure Australia was not in a position to make recommendations which were supported by funding commitments.

There is a very stark contrast with the clear commitment that the Abbott government has made in relation to infrastructure as part of the 2014-15 budget, where there was laid out a historic $50 billion infrastructure investment program designed to deliver vital transport infrastructure right across our cities, regional centres and rural communities. First of all, Infrastructure Australia failed to live up to aspirations because it became increasingly irrelevant as it became obvious that the federal government had spent all of its money and more. Secondly, it failed to live up to the stated aspiration of using a cost-benefit analysis as a key requirement before any major project.

Let me turn to the National Broadband Network as a case study of why it is so important to have a cost-benefit analysis and why, sadly, the previous government failed to live up to that principle. In 2009, the then Prime Minister, Mr Rudd, announced that the government was going to invest up to $43 billion together with the private sector over eight years in a super-fast national broadband network which he described as 'the single biggest infrastructure decision in Australia's history'. Some 15 minutes after the press conference, Mr Rudd updated his Twitter account and said: 'Just announced biggest ever investment in Australian broadband, really exciting infrastructure for the future.' There was no mention of cost-benefit analysis in that tweet. The then communications minister, Senator Conroy, said that the decision was a historic moment for Australia's telecommunications sector. But with this announcement and with the very big commitment of spending there was no cost-benefit analysis, despite the stated policy of the than Labor government that there would be a cost-benefit analysis conducted through the Infrastructure Australia process before major infrastructure commitments. Indeed, then broadband and communication minister Conroy repeatedly dismissed calls for a cost-benefit analysis. In May 2009, he had this to say:

We do not need any more studies, any more cost-benefit analysis, to know that this is an infrastructure investment that this country is crying out for.

When in opposition, the coalition sought to help—we sought to assist. We proposed legislation designed to remind the then government of its commitments and designed to require the Productivity Commission to conduct and publish a cost-benefit analysis of the National Broadband Network. Sadly, that legislation was not supported by the then government. As late as 2013, the then Prime Minister—back for a second time—Mr Rudd, was still boasting about the National Broadband Network and glossing over the lack of a cost-benefit analysis. In his speech to the Urban Development Institute of Australia Congress in 2013, he said:

… the Government has undertaken the single biggest capital investment program in the country's history in the NBN to turbo charge productivity growth for the future by providing businesses with new technology platforms …

When the coalition came to government, we acted, consistent with our policy commitment, to rectify this yawning gap and we established a process to carry out a cost-benefit analysis. Before we did that, Mr Bill Scales AO, a very eminent public servant and a significant contributor to public policy in Australia over many decades, was commissioned to conduct an independent audit of NBN policy process, and he had this to say:

There was no business case or any cost-benefit analysis, or independent studies of the policy undertaken, with no clear operating instructions provided to this completely new government business enterprise, within a legislative and regulatory framework still undefined, and without any consultation with the wider community.

That is about as damning a summary of a chaotically mismanaged public policy process as you could imagine.

We have sought to correct this yawning gap. Last month the government released the independent cost-benefit analysis of the National Broadband Network, a piece of work done by an eminent committee chaired by Dr Vertigan, again an eminent former public servant. That piece of work assessed the costs and benefits of deploying broadband through a range of models. It confirmed that there are economic and social advantages in deploying high-speed broadband infrastructure. Indeed, it found that nationwide access to superfast broadband will deliver total benefits to Australia worth more than $40 billion in today's dollars.

Very importantly, it considered the preferences and potential future demand for high-speed broadband in Australia and it estimated consumer willingness to pay for increased broadband speeds—an absolutely critical part of the analysis and something that the previous government never bothered to do. The report found that consumers do not need and are not willing to pay for speeds greater than those that will be available under the Abbott government's commitment of 50 megabits per second by the end of 2019 to 90 per cent of the fixed line footprint.

The cost-benefit analysis that was conducted under the auspices of the current government also concluded that the present government's approach to deploying the National Broadband Network through an optimised multitechnology mix model, as recommended in the strategic review conducted by NBN Co, will provide net benefits of $18 billion compared to a baseline in which there is no further rollout of superfast broadband. Indeed, one of the particular merits of the cost-benefit analysis conducted by the Vertigan panel was to systematically assess the various paths forward from the starting point and say: what are the options, what are the costs of each of those paths and what are the benefits that will be captured if we choose one or other of these paths? I am pleased to say that it found that the multitechnology mix model, which is the one that the current government is now pursuing in relation to the National Broadband Network, is one that will offer $16 billion more in net benefits than the fibre-to-the-premises plan that the previous Labor government was following.

Indeed, the cost-benefit analysis found that the previous Labor government's plan would have had net benefits of only about $2 billion. There is a very clear reason for this. The multitechnology mix model will deliver broadband to most Australian households considerably more quickly than the plan which the previous government was following and people get benefit from getting the broadband network delivered more quickly. So it was a thorough and rigorous analysis that looked at the costs and the benefits. It was a very important approach and one that is delivering tangible public policy benefits.

The third point I want to make in the brief time available is that the bill before the House will entrench the requirement to carry out a cost-benefit analysis and, as the experience with the National Broadband Network shows, this is a very desirable thing. The lack of such a step being taken by the previous government has been highly regrettable in that it has led to delays and it has led to a path being followed which was not the optimal path, a path that needed to be corrected by the present government. I am pleased to say we are getting on with correcting it.

It is uncontentious that investing in infrastructure is of the highest importance, but there are finite funds available to government so to allocate those funds rationally it is very important to engage in cost-benefit analysis. That is what this bill will ensure happens.

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

It is deeply ironic in this debate on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 that we should get a lecture from government members opposite about the virtues of independent cost-benefit analysis for major projects when in my own area they are running a mile from undertaking one for the East West Link in Melbourne—that is, the freeway through Royal Park. I wrote to the Minister for Infrastructure and Regional Development and his parliamentary secretary on 27 August seeking appropriate and publicly transparent economic modelling, environmental assessment and community consultation before we get tens of billions of dollars spent on a tunnel that makes no economic sense, will damage our environment and will hurt local communities.

The coalition government has spent $1.5 billion for both stage 1 and stage 2 of the East West Link project to connect the Eastern Freeway to CityLink with the idea of connecting the link to Melbourne's western ring road and western suburbs. Both these stages are reported to cost between $8 billion and $10 billion. These are huge sums of taxpayers' money that ought to be carefully considered in the context of the need for governments to live within their means. We often hear from those opposite about the need for government to live within its means. We constantly get lectured about fiscal responsibility. One would expect that a carefully thought out economic analysis would have been undertaken and released to verify the need for the East West tunnel project and the need for large sums of taxpayers' money; however, this is not the case.

Media reports based on FOI and leaked information have indicated that such economic modelling that has been carried out has been based on false assumptions regarding petrol prices, incomes, car running costs and inner-city parking. Against that background, I welcome and congratulate the Victorian Labor opposition leader, Daniel Andrews, for his leadership on infrastructure issues. Back on 11 September he stated that the forthcoming election in November in Victoria will be a choice of either better public transport and local roads or the $8 billion dud East West Link road tunnel.

Victorian Labor has obtained legal advice which states that any contract that is signed before an election for a project that is facing a Supreme Court challenge cannot be entered into safely. That legal advice was obtained by former Federal Court judge Ray Finkelstein, administrative law expert Richard Niall QC and contract law expert Siobhan Keating. Victorian Labor states that it will not be held responsible for a document that was recklessly devised in haste and error and that it does not believe that any contracts for the East West Link project can be validly entered into while a matter before the Supreme Court remains unresolved and there can be no certainty that any contracts for the East West Link are legally binding. Victorian Labor has said if no legally binding contracts exist, then a Victorian Labor government will not proceed with the East West Link project.

It is a disgrace that the Victorian Liberal Treasurer, Michael O'Brien, says the government is determined to sign the East West contracts before the onset of the pre-election caretaker period. I need to bring to the attention of the House that we need to recall that the Liberal Party said before the election that it would not build the East West Link. It did not take this issue to the voters. Now it is shamelessly trying to lock Victorian taxpayers into billions and billions of dollars on a freeway through Royal Park. This project is so big that it will eat up both Victoria's road budget and public transport budget for years. It kills off the legitimate aspirations of communities from all parts of Melbourne for improvements to their local roads, railway crossings and the like.

This fraud on the voters—trying to lock taxpayers into this lemon before an election can be held—comes from the same political party that talked up such a storm and became positively apoplectic over Julia Gillard's 'no carbon tax' pre-election statement. You have to wonder: where is that 'convoy of no confidence' when you need it? The East West tunnel project will cripple Victoria's finances for many years to come. It will crowd out the state's other core responsibilities in public transport, education and health. A proper, thorough and publicly transparent economic modelling case should be undertaken for this project. If we examine what is known in terms of economic analysis of the tunnel, then we can come to some understanding as to why this government is ducking and weaving to avoid undertaking one.

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

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

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

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

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

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

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

The financial case for the East West Link hinges on a prediction that toll road use will jump over the next 30 years because of rising wealth and shrinking petrol and CBD parking price rises. The business case makes the controversial assumption that: first, a driver's willingness to use toll roads will increase by 1.4 per cent per annum due to rising incomes; second, the rate of increase in the cost of running a car will fall from the current two per cent per annum in real terms to half a per cent per annum by 2041; and, third, that the rate of increase in the cost of inner city parking, which is currently increasing at four per cent per annum in real terms, will fall to 0.5 per cent by 2041. I personally regard this as a remarkably heroic assumption given that the state government has decided to extend its congestion levy up from the City of Melbourne into the City of Moreland, up into my electorate, in recent times. This will of course lead to significant increases to the cost of inner city parking.

The Victorian government has been caught out manipulating modelling to produce a favourable result. The former Infrastructure Australia head Michael Deegan told a Senate committee that the government's unpublished business case provided an alternative estimate showing a cost-benefit ratio of just 0.8. Under this scenario, the project would return just 80c for every dollar spent, suggesting an economic loss if the stock standard analysis preferred by Infrastructure Australia is used. According to The Age, in a submission to a federal infrastructure inquiry, Infrastructure Australia outed Victoria for failing to submit a robust business case for the East West Link, singling out:

… the controversial $6 billion to $8 billion road as a key example of why the public are cynical about "big-ticket" infrastructure announcements.

Infrastructure Australia's 11-member council—which includes transport experts like Sir Rod Eddington and the former federal Treasury Secretary Martin Parkinson—is understood to broadly recommend only those projects with benefit-cost ratios of more than 1.5. And Michael Deegan warns that big-spending promises are being made without proper scrutiny. He said:

This is a particular problem during election periods where commitments are often made, although robust business cases have not been prepared, let alone independently reviewed …

The freeway through Royal Park is a classic example of economic mutton dressed up as lamb.

According to traffic expert Stephen Pelosi, the traffic on the East West Link during the morning peak is expected to slow to 20 to 30 kilometres per hour by 2031 as worsening congestion pushes the road close to capacity just 12 years after it is due to open. The East West Link is forecast to carry 80,000 vehicles a day on opening in 2019, increasing to between 100,000 and 120,000 a day by 2031 according to this modelling. Stephen Pelosi said:

If it's reaching 120,000 we're at a position where we're reaching capacity. Unless you intervene in some manner and manage the toll rate to influence demand, you get a situation where you're near capacity.

If it is good enough for the NBN, as the previous speaker suggested to the House, it should be good enough for this project too. Why is the government only too happy to undertake economic modelling on the NBN yet, when it comes to the largest infrastructure and transport project in Victoria's history—East West Link—it refuses to do so. If the age of entitlement is over, why isn't the private sector bankrolling East West Link? If we are in the midst of a budget emergency, why aren't the belts being tightened when it comes to major projects that do not make economic sense?

That is why the amendments to the bill which Labor has moved seek to assess projects first on their merits and fund them later, not the other way around. We also seek to strengthen transparency and public disclosure of project assessments. These are strong measures that will prevent money being wasted on potential white elephants like the East West Link. If this government were serious about fiscal responsibility, if it were serious about merit based infrastructure planning then the freeway through Royal Park in Melbourne would not proceed.

Concern with the lack of due diligence behind the decision to proceed with this freeway is growing. It is acknowledged in the transport industry that adding road capacity through the freeway will bring in more vehicles more quickly and actually worsen congestion on Haddle Street, Flemington Road, Tullamarine Freeway and other roads that are currently at capacity. Industry assessments are that the freeway will not fix congestion, because, as the 2008 Eddington report identified, less than 20 per cent of all vehicles travel through from the east to the west. What actually goes on is that 80 per cent of all vehicles exit to inner Melbourne to access jobs and services. They will continue to do that despite the Royal Park freeway and, with more vehicles reaching exits more quickly, the risk is that congestion will actually be worse.

There is no strategic justification for this project. This is a proposal which fails critical productivity tests and runs the risk of being negative for state product and GDP. When a poor public project is selected, the community loses twice. It loses because scarce capital is misapplied and because taxes and funds raised to finance that project distort behaviour in ways which have a significant cost.

Tolls on the planned freeway would have to be three times the current cost of an average trip on Citylink for the project's investors to make a profit, according to an international study led by University College London which analysed numerous transport megaprojects, including Australian road and rail projects. It found that, for investors to get a return on the freeway, motorists would have to be charged a minimum $10.50 to use it—and I assure that House that, if they are going to be charged $10.50, they will not be thanking this government or the Victorian government for that opportunity. Interestingly, we have seen the founder of Citylink, Alan Hale, saying as recently as 9 September that East West Link was the wrong priority for Victoria infrastructure. He said the 5.2-kilometre toll road is:

… the wrong priority and will not alleviate congestion across the city…

The evidence from cities around the world where real renewal has been achieved is that public transport should be the primary focus, not just more and more roads.

For those of us who have been involved in major transport projects long enough, the lessons learnt, often the hard way, are that building more roads without investing in public transport is simply a recipe for inducing more vehicular travel.

Alan Hale is absolutely right about that. There are superior alternatives to the East West Link, including those outlined by Victorian Labor: doubling the size of the Melbourne city loop, constructing the Melbourne Metro rail project or removing 50 of Victoria's most dangerous and bottlenecked level rail crossings. I commend the opposition's amendments to the House.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I call the member for Brisbane.

Teresa Gambaro (Brisbane, Liberal Party) Share this | Link to this | Hansard source

Thank you very much, Deputy Speaker, and I congratulate you for your elevation to the chair. It is befitting that a fellow Queenslander is in the chamber today.

I rise today to speak in support of the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. The bill amends the Infrastructure Australia Act 2008 to clarify the legislation and administrative arrangements for Infrastructure Australia. It will enable a reordering of previsions pertaining to cost-benefit analyses of infrastructure proposals in the act to ensure that these analyses form the evaluation proposals.

The bill makes provision for Infrastructure Australia to evaluate proposals involving Commonwealth funding of at least $100 million. I note that this involves a clarification and the bill is of an administrative nature not involving financial or regulatory impacts. In fact, Infrastructure Australia has already been tasked with acting on these new administrative arrangements. Bringing this bill before parliament and the Australian people is essentially about transparency and ensuring that all Australians are well informed about the changes that will impact on their lives. Most importantly, it is about ensuring that taxpayer dollars are well spent.

Impacting Australian lives for the better is in itself quite meaningful when you look at the importance of well-directed infrastructure spending in Australia. Reliable and cutting-edge essential infrastructure is not only a defining feature of a prosperous and developed economy but is also not surprisingly a cornerstone of what the coalition government promised to deliver to Australians. I recall Prime Minister Tony Abbott's words upon being elected:

… we'll build the roads of the 21st century because I hope to be an infrastructure prime minister who puts bulldozers on the ground and cranes into our skies.

The Prime Minister has been very busy making good on this promise ever since, with a staggering $50 billion of the Infrastructure Investment program committed in the May budget. That is a staggering $16.4 billion more than Labor promised. In fact, Labor not only promised less but took what it did have and used it for indiscriminate, undirected, even random infrastructure spending at enormous cost to the Australian taxpayer. At an Infrastructure Partnerships Australia address the Prime Minister made the extent of these indiscretions very clear when he said:

… there has not been a single cost-benefit analysis published prior to any of this government's infrastructure commitments.

He said, when he talking about the previous government:

Every single programme and project has gone ahead because it has suited the government's political agenda. Whether it actually met the long-term economic needs of our nation has never been the government's main concern. The result is an infrastructure spending gap that Infrastructure Partnerships Australia estimates would cost $800 billion over the next decade to fill. There is a better way. The Coalition has a plan for Australia's infrastructure of the future.

In stark contrast to Labor, we do have a better way. The coalition's $50 billion fund will be used to deliver vital transport infrastructure across our cities and our regional and rural centres, removing the black spots and ensuring that no Australian community will ever be forgotten and no Australian community will ever lag behind. Coming from the state of Queensland, I can speak from experience about what it means to be forgotten and to lag behind, because we have—and did have—some of the worst infrastructure in Australia. Given that the Bruce Highway singularly accounts for the worst record of deaths of any roads, we cannot afford any more neglect. The Bligh Labor government certainly did our state absolutely no favours in this regard. As Australia's second largest state, Queensland's economic wellbeing is very heavily dependent on infrastructure development. That is why Labor's appalling neglect just does not add up.

The Abbott government will bring back to life what should have been an intrinsic link between infrastructure and its development, and economic prosperity. We understand that better roads and rail networks deliver savings in key areas. They bring time savings; they make it easier to get freight around; they make it easier to move around our rural and regional cities; they bring cost savings, as travel times and, therefore, fuel costs are cut, so we can spend much less time travelling to and from work; and they bring life savings. With my state of Queensland being a case in point, the coalition's commitment of $6.7 billion, with a further 20 per cent being committed by the Queensland state government, may save up to 40 lives a year. That is a lot when you think that one death is too many and all deaths are unnecessary. Time savings are also likely to provide an incentive for safer driving practices in industries such as trucking, where a large amount of time is spent on roads. For many of us, improved vital infrastructure represents a better work-life balance. For others, it can mean all the difference in the world.

Investment in infrastructure is essential for our growth as a nation, with a population growth rate, according to the ABS census data from 2013, averaging 1.7 per cent, or close to 396,000, across Australia. If our investment in roads and other transport networks—the infrastructure today that Australians rely upon—fails to keep pace with this rapid population growth, it will negatively impact on our social and economic fabric. And that is just not the way that we as a nation want to be identified. Rather, we need to set before us the goal of being progressive and being as efficient a society as we can possibly be.

It is in this context that the Abbott government has brought this bill before the House, not as a legal necessity but as a government willing to show its hand and to keep all Australians well informed of the changes that impact on lives. The bill reflects the coalition's recognition that reliable and efficient infrastructure has an operational foundation. It involves sizeable projects, all three levels of government and a significant coordination requirement. Prior to the 2013 election, we indicated that we would create an expert advisory body, Infrastructure Australia, that was much stronger, much more independent and much more transparent. The vision for Infrastructure Australia was that it would be an expert advisory body and that it would facilitate effective coordination between industries, states and territories, particularly in prioritising and advising on infrastructure proposals.

I am really pleased to say today that Infrastructure Australia is truly—and, when I say truly, I do mean truly—an independent advisory body, with the CEO responsible to a board and a new chair, Mark Birrell. It will provide an assessment every five years on long-term infrastructure needs. It will inform budgetary and political processes well before it becomes critical for decisions to be made, and estimates will be indexed to ensure relativity. The Abbott government is well advanced in achieving these improvements on the operational efficiency for large infrastructure projects, having tasked Infrastructure Australia to assess projects—receiving government funding of $100 million or more. It will publish reports on its website as a transparent advice to government. It will audit nationally significant priorities. It will development a 15-year plan on infrastructure priorities, to be delivered in 2015, as well.

It is also noteworthy that work on the promised national infrastructure audit has been in consultation with state and territory governments—again consistent with our commitment to ensure coordinated responses to infrastructure needs. It is also noteworthy that Infrastructure Australia remains a key advisory body with an independent view. It is not a decision maker in terms of funding allocation. These decisions and these processes will remain the domain of the government of the day. Decisions will be the result of a publicly informed political process and, importantly, the result of a robust cost-benefit analysis.

It was only in recent times that we recoiled in absolute horror as our Minister for Communications, the Hon. Malcolm Turnbull, spelt out clearly for us the terrible price to be paid for the Labor Party's complete lack of regard for due diligence, particularly when it was dealing with the NBN project. He said, 'Labor is in denial about the NBN failures under its watch.'

There must never again be a big government project undertaken without a cost-benefit analysis.

A big project without a cost benefit analysis—and the NBN could not get any bigger. A cost-benefit analysis for the NBN has finally been concluded and, after the fact, the results speak for themselves. Providing fast broadband to the bush through wireless and satellite services will cost nearly $5 billion but produce only $600 million in economic benefits—a return of just 10 per cent,

But what is the use of a cost-benefit analysis now? This insidious piece of poor decision making and politicking has left us rolling out an expensive, inefficient network, which was a second-rate solution from its inception in the minds of a seemingly mindless opposition. Should Labor ever again see the light of day in government, we will certainly be ready to hold them to account, with an expectation that it will take a leaf out of our book and never again act with such contempt for the trust and the hopes of the people they are meant to responsibly represent. In Minister Turnbull's words:

The screamingly important message is: why wasn't a cost-benefit analysis done beforehand? There must never again be a big government project undertaken without a cost-benefit analysis.

The coalition now makes good on this promise. There will be no NBN style disasters on our watch. The Abbott government's good news story is that improved planning and advice will ensure infrastructure and therefore the standard of living of all Australians will be improved for decades to come.

Improved coordination and prioritisation will eliminate the waste and duplication we have become accustomed to. Australians deserve to reap the benefits of taxpayers' dollars being well spent. We can ill afford the alternative—that is, costs that are borne by all Australians on numerous levels. I realise that there is no small change involved when we are dealing with infrastructure investment. But I believe I can rest my case in demonstrating that efficiently-allocated and well-prioritised infrastructure spending is beneficial for all Australians. This bill is about positioning Australia well into the 21st century as a growing and prosperous economy and I commend it to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I commend the member for Brisbane for her articulation of the issues surrounding the NBN. Everybody in the House will understand how important the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill is, given the issues that surrounded the NBN.

The bill will amend the Infrastructure Australia Act 2008 to clarify the legislative and administrative arrangements for Infrastructure Australia as soon as possible after commencement of the Infrastructure Australia Amendment Act 2014. The bill will amend the provisions in the act relating to the function to evaluate proposals for investment in or enhancements to nationally significant infrastructure to include the requirement that Infrastructure Australia undertakes evaluations of proposals that involve Commonwealth funding of at least $100 million. The NBN is a prime example as to why this is so important.

The bill will also move provisions currently under 5B of the act relating to cost-benefit analysis to a new section, 5AA. The bill also provides that a proposal must not be included in an Infrastructure Priority List unless a cost-benefit analysis of the proposal has been prepared in accordance with the approved method.

When I think of nationally significant infrastructure I think of my electorate of Forrest, which is a $15 billion GDP region. It has exponential growth and the need is there for infrastructure to drive further investment and opportunity. The South West of Western Australia is a driver in the state's economic and cultural development. It is also an environmental icon, being listed as one of the world's international biodiversity hotspots. The South West region is the tourism and holiday destination of choice for the majority of people from the Perth metropolitan area. We have a wide range of activities, including agriculture, mining, resources, tourism and construction. These activities, coupled with the significant population growth of the region—it is 2.1 per cent per annum, compared with the state's average of 1.8 per cent and the nation's average of 1.4 per cent—has put significant pressure on the transport infrastructure of the region. It is one of the fastest growing regional areas in Australia, with a current population of 163,000. By 2026, this is expected to increase to at least 230,000. The area holds around 25 per cent of the state's population, the greatest proportion outside the metropolitan area.

The South West is frequently underestimated for its economic diversity and stability. It is a key engine room of the state of Western Australia, providing much of the state's energy, industry and manufacturing, which underpins the region's $15 billion economy. It is a mining region that produces $2 billion a year in minerals, a number that will soon grow, with additional exports planned. It is an agricultural region, with a turnover of over $600 million a year in food, mainly in milk, vegetables and beef production. It is also one of the world's premium wine producing regions. So there is a real need for nationally significant infrastructure to manage this growth and future economic development.

Planning for and investment in transport infrastructure has not kept pace with growth or demand in the South West. There has been considerable state and federal investment in roads leading to the South West. These important assets have improved travel between the South West and Perth, but the outcome is that even more traffic is entering the South West, putting even more pressure on local roads.

Time is of the essence here. The completion of the Perth to Bunbury highway was the first step in meeting the road needs of the area. There is now dual lane access from Bunbury north to Perth and beyond. However, this has moved the bottleneck to Bunbury itself. The Bunbury Outer Ring Road has been partially completed, with both state and federal funding. But it is basically now like a T-junction without the ends connected. It needs each end to be completed to link it to the South Western Highway in the north and Bussell Highway in the south. This critical last third needs to be funded and built.

The model that the federal coalition government has put in place for infrastructure funding is a sound one and it is the largest in Australia's history. I am looking forward to the Bunbury Outer Ring Road being prioritised on the Western Australian state government infrastructure agenda, given that federal funding is directly linked to state priorities in the new collaborative model of the Abbott government. The construction of this road is a key need of the region. Once completed, it forms the hub from which a number of important highways radiate out into the South West, servicing the region.

I well understand why capital needs to be spent particularly carefully and why there is a need for a cost-benefit analysis. It is so that projects like this can be assessed in the proper way. I understand the capital needed for projects around Australia to link us to the world. The Business Council of Australia said that we have an infrastructure need of over $760 billion. The coalition government is driving an innovative asset recycling program with incentives to the states and territories to privatise assets and infrastructure. The Minister for Trade and Investment, in his presentation on investment to this House today, advised that he has chaired two meetings of the Commonwealth and state and territory trade and investment ministers. These meetings identified national investment priorities of tourism infrastructure, agribusiness and food, resources and energy, major infrastructure, and advanced manufacturing, services and technology. I note that the minister is appointing five investment specialists to work with Austrade to identify inward investment opportunities and to help make them happen across these five areas.

The government is working hand in hand with state and territory governments to attract investment, particularly for major infrastructure. The Minister for Trade and Investment today said that this initiative of the government has sparked interest from international investors such as the $500 billion major pension funds of Canada and the five US investments funds with $l trillion under investment that he met during round table meetings with the fund managers. Investment is one of the four pillars of the coalition government's recently outlined economic diplomacy program.

We need cost-benefit analysis for us to build sound projects so that we do not end up with the NBN, which was nothing better than a dog's breakfast. It really reinforces the need for this cost-benefit analysis type of approach. I note that even in my part of the world our rail system, particularly in freight transport, has been under pressure. The Collie-Brunswick Junction-Port triangle is the key hub of freight in the region and this has long been recognised as having capacity constraints. Highlighted in the submission by the WA state government to Infrastructure Australia to duplicate the line to that area to increase capacity, this additional expansion will be required on the Collie to Brunswick Junction line, especially with expansion of the Worsley Alumina refinery. The Brunswick Junction to Picton part of the rail line is a principal bottleneck, and this has been one of the priorities for the region. We have got other railway lines such as the Greenbushes to Bunbury railway line as an alternate for freight over time.

There is one thing I really want to talk about regarding infrastructure and the need for sound planning and processes and why this government's approach is so important. I look at infrastructure such as the regional airport that is needed in the South West based in Busselton. This is the gateway to that wonderful part of the world—the Margaret River and South West regions. We need an airport that is large enough to take direct flights from interstate and overseas so that tourists can get to our region easily and in comfort. The whole region is behind this proposal, which is very important. We know how much the region has to offer and we have a whole lot of small businesses operating throughout the South West engaged in a whole lot of different offerings for tourists and for visitors alike. People need to be able to get there efficiently and safely, and that is why the important process of being able to assess projects and invest in projects that have national significance is so important. I support this bill before the House.

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

I am pleased to rise on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. The purpose of this bill is to amend the Infrastructure Australia Act 2008 so that it is a function of Infrastructure Australia to conduct a cost-benefit analysis of those infrastructure projects which are of national significance and which also involve Commonwealth funding of at least $100 million. We know the reason why this bill was required. It is trying to rectify the evil of the absolute debacle we had under the previous Labor government with their so-called NBN and their complete failure to have a cost-benefit analysis of that project, which saw billions of dollars of precious capital wasted. It is not only important that we have a cost-benefit analysis, it is also important that that cost-benefit analysis accounts for all the costs and makes sure it does not overstate or understate the benefits.

In the remaining time available tonight on this bill I would like to set out a textbook example of a complete failure of a cost-benefit analysis—a cost-benefit analysis full of flawed assumptions that failed to take into account all the costs and completely overstated all the benefits. The cost-benefit analysis I am referring to is that done under the previous Labor government of what is known as the Moorebank intermodal project. We saw from the so-called cost-benefit analysis that was done for this project that it assumed it would have a cost-benefit ratio of 1.72. It sounds pretty impressive until we actually go through all the costs they failed to consider.

The first cost they failed to consider was the cost of the land. This land is the existing School of Military Engineering which is between Moorebank Avenue and the Georges River. As part of the Defence annual report of 2012-13, we currently have that land, which is 333½ hectares, valued at just $261.7 million. That is less than $1 million per hectare of land. We have seen small housing lots with houses in our area selling for over $1 million, but here we have the valuation at just $1 million per hectare. And this is highly valuable land. A back-of-the-envelope calculation is that perhaps we need another zero on the end of the valuation of this land. We have land that is a stone's throw from Casula railway station. A footbridge could be put across the Georges River there, and that entire 330-hectare precinct could be accessible by a railway station. There are so many wonderful things that could be done with that parcel of land. And if that land was valued in the cost-benefit analysis at its true value, then the so-called cost-benefit analysis that was done previously simply falls over in a screaming heap.

Secondly, what the cost-benefit analysis of the Moorebank Intermodal fails to consider is the cost of all the road and bridge upgrades that are needed, the extra congestion on the local roads, and the commercial effect on the Liverpool CBD. I would like to quickly go through a few of those. The only actual cost of the needed road upgrades that this analysis has added on is a simply four-lane extension to one current section of Moorebank Avenue. That is not in their cost projections until 2029-30. We are talking about moving a million containers a year through this area. The area at the moment is completely congested. People think Port Botany is congested, but all you are doing is moving a problem from Port Botany and dumping that problem out in the Moorebank-Liverpool area. For this intermodal to work, we need billions of dollars worth of upgrades to the local road network.

I will go through just a few that are needed. Firstly, we need a new bridge over the M5 motorway across the Georges River. We need another new bridge over Cambridge Avenue at the southern end of the development, also over the Georges River. We need a new bridge on the Hume Highway over Cabramatta Creek. Currently the Hume Highway is six lanes, but the bridge is only four lanes. If we are going to put all this extra traffic in our area, that bridge needs to be upgraded to six lanes. The same goes for the bridge over Prospect Creek. Again, the Hume Highway is six lanes, and the bridge is only four. If this intermodal is going to work and have efficiencies in moving trucks around our local area, that needs to be upgraded. Then we need improved access to the M5. We need a new overpass at Glenfield. A new Liverpool CBD bypass would be required. We would also have to deal with what is either Australia's first or third worst accident hot spot in the entire country. I am talking about the Hume Highway at the back of the Liverpool CBD. Last year we had almost 200 accidents in that short few hundred yards of space, making it one of the worst black spots in our nation's history. Of all the roads we have in our country, this is one of the worst black spots. And the plan is to actually put 270,000 TEU movements through that existing road network. So, if this intermodal has any hope of being economically viable and efficient, we also need that road upgrade. The list of intersections that need upgrading just goes on and on and on. I have a list here of at least 40 different intersections. We are talking about billions of dollars worth of upgrades to local roads that are needed to make this intermodal viable. But not one of those costs is actually in the cost-benefit analysis.

Then we get on to the effect and the reduced access to the Liverpool hospital. The Liverpool hospital is the largest hospital in the Southern Hemisphere. It services all of south-west Sydney, and it is planned that it will grow and grow in the years to come as our population in the south-west continues to increase. The proposal to put in an extra million TEU containers on the local road network and increasing the truck movements through that area will actually reduce access to that hospital. It will mean that someone travelling in the back of an ambulance will have to wait longer in congested traffic to get through the Liverpool CBD. None of that is in the cost-benefit analysis. The other thing that is not in there is the environmental cost, particularly the cost of increasing particulate emissions. This is one of the areas where the cost-benefit analysis that has already been done completely and utterly fails, because it falsely assumes that there are actually some environmental benefits. It considers CO2 emissions without considering the emissions of particulates. There is a big debate about what CO2 emissions do, but the effect this will have will be negligible. However, there will be a real effect on particulate emissions.

The reason for this mistake is that if we put a container on the back of a train, as compared with moving it by road, then, yes, the rail is more efficient in terms of fuel use. It is actually twice as efficient. So, we need half the amount of diesel fuel. If we are moving a container from Port Botany to Moorebank and if we take it by road, we need twice the amount of diesel fuel. But what the cost-benefit analysis failed to look at is the different levels of particulate emissions from a truck versus those polluting diesel trains. I had the Parliamentary Library do some research for me in this area. For a truck built after 2007—a truck that is getting towards seven or eight years old—compared with the diesel trains we are using, the diesel trains have 20 times more particulate pollution. So, what we will do for every container we take off the road and put on the rail, to move it from Port Botany to Moorebank, is increase the particulate emissions 10-fold. Why is this important? Already in Western Sydney and throughout New South Wales there are over 1,000 deaths a year attributed to particulate-matter air pollution.

Our monitoring station in Liverpool has continued to show an increase in particulate emissions over the last several years, because of the carbon tax and other issues that have pushed up electricity prices, such as the RET, and with higher electricity prices people have been burning more wood to keep their houses warm in winter. That has raised the particulate matter in Western Sydney—in fact, it has raised it so much that we have had levels in Western Sydney above World Health Organisation standards. The previous government came up with a plan—which, I hate to say, we have at the moment adopted, although hopefully we will see common sense—that will increase the particulate emissions for every container that is moved from Port Botany to Western Sydney 10 times. Of course, that is not included there.

Then we have the case of overstating the benefits. There are warning bells on this project. New South Wales Infrastructure, the state infrastructure strategy said:

The short-haul rail market is essentially unproven in Sydney. At present most demand in Sydney is for long-haul export freight and there is significant capacity available at a number of existing intermodal terminals.

Sydney Ports and Hutchison are currently developing a 300,000 TEU per annum intermodal facility at Enfield. which, it says, was to open in 2013 but has now been pushed back until the end of this year. Enfield proves the test case for larger-scale, short-haul intermodal freight in Sydney. The recommendation from New South Wales Infrastructure is that state public funding for additional intermodal capacity in Sydney be minimised until there is greater clarity on whether the short-haul freight market is viable. That has been completely forgotten in this cost-benefit analysis. It has also failed to consider the competitive exchanges in the market that have occurred. In the last 12 months we know we have had Enfield with a 300,000 capacity which could very easily be stepped up to 400,000 or 500,000. We also had an announcement a few months ago that Asciano would build a 600,000 TEU capacity at Chullora. So we are to have a million TEU capacity coming on line in the next 12 to 18 months. There is simply no demand whatsoever for another million TEU capacity at Moorebank. But none of that has been considered.

Then we have the announcement of Westconnex, which will open up the west of Sydney to the port areas and the airports. The issue is that most of the container freight from port Botany goes out to Western Sydney and particularly to the Eastern Creek area. It defies logic that, when a container arrives at Port Botany, an importer is going to take that container, put it on a train and freight it all the way around to Moorebank, take it off the train at Moorebank, put it on a truck and take it 20 or 25 kilometres up to Eastern Creek. When Westconnex is complete, they will be able to put that container straight on the back of their truck at Port Botany, jump on Westconnex and be up in the Eastern Creek area in half an hour or 40 minutes. So the improvements in infrastructure that this government has announced with Westconnex and the M5 upgrade make the Moorebank project completely redundant.

What is the solution? I say that if the private sector wants to go ahead with this project, let them; but under the conditions that they pay the true economic cost of that land and that they get no discounts from the Commonwealth. We look at the true value of that land—if it is one or two billion dollars, that is the amount they should pay if they want to use that land. They should also be made to make a contribution to all the road upgrades and all the bridge upgrades that are needed. If they are prepared to do those things, I say let them go ahead. I know that when those costs are truly factored in they will realise this project—(Time expired)

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

It is nice to have this opportunity tonight to talk about the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. When I first got elected, I used to think in opposition that it will be great to get to the day when we can return to the Treasury benches and have the cheque book there so I can look out across the electorate of Cowan and say, 'This is what needs to be done, and maybe I can get some federal assistance for that.' Unfortunately, in the intervening period the budget has not been balanced and we are in a position now where the debt is significant. Yet, in spite of those circumstances, the reality now is that the Abbott government has still found $50 billion worth of infrastructure in the years ahead. That is good news, but one of the key things we have learnt from the past six years is the importance of using that money wisely to ensure that the taxpayers' money we are using is well spent and, to the best of our ability, that it is efficient, effective and raises productivity in this country—making peoples' lives better. That is a key responsibility of any government.

Around the time I was elected in 2007 we had made some commitments and the Howard government had got some things done. The Ocean Reef Road extension, a major project in the middle of Cowan, received $7 million from the Howard government, working with the City of Wanneroo, and was opened in 2010. It was good to see that important infrastructure project completed. In the lead up to the 2007 election there was also the commitment first by us and then by the Labor Party to make Hepburn Avenue a dual carriage way from Mirrabooka Avenue down to Alexander Drive. That was $5 million; and there was another $5 million to work with the City of Swan to extend Hepburn Avenue from Alexander Drive over to Beechboro Road and then Marshall Road. These were important infrastructure projects. Of course, you could not really describe them strictly as federal roads. They were actually local government roads, but in any case it was effective and there were reasons for it. It certainly improved traffic flows through Cowan and is a great link between the major north-south arterials of the Mitchell Freeway and Wanneroo Road and linking over to Alexander Drive and the light industrial area of Malaga adjacent to Ballajura in the electorate of Cowan. There was certainly value in achieving those things, and I was very pleased that they got done.

I was also very pleased that in the lead up to the last election we promised and in government have committed to providing $615 million for the NorthLinkWA project. NorthLinkWA starts around the intersection of Marshall Road and the Tonkin Highway, just south of Malaga, and continues up to Muchea. It has also been known as the Swan Valley Bypass. It is an important initiative that has been sought after for a long time. I pay tribute to the former member for Pearce, Ms Moylan, and the current member for Pearce, Mr Porter, for the very strong advocacy for the Swan Valley Bypass, which is now known as NorthLinkWA. Swan Valley is of course a significant area of Perth. It is quite a tourist district. Road congestion, with heavy vehicles moving north to mine sites, was a problem that needed to be fixed. I am very pleased that the Abbott government is getting on and doing what needs to be done. It is exactly these sorts of projects that we have to look at in light of this legislation, where a cost benefit analysis can be applied to such projects and across a range of different areas. You can see that there is going to be great value not just in terms of safety but in productivity regarding business traffic and traffic for all people.

As I said earlier, I am very pleased that the Abbott government has found $50 billion for infrastructure investment, because it is important. We are seeing the benefits of this right across the country. The important thing is that when you are entrusted by the people, by the taxpayers, with these sorts of funds there needs to be accountability, openness and transparency. So I am very pleased that the requirements we are putting upon Infrastructure Australia will see exactly these sorts of benefits. It is the case that Infrastructure Australia is already assessing projects which involve Commonwealth funding of over $100 million. It is right that it do so. That is what we said before the election that we would do. I am very happy that it is now happening.

It is important also that the Commonwealth and Infrastructure Australia work with the state and territory governments. It is an important part of Infrastructure Australia's functions that the national infrastructure audit takes place. The audit starts on 1 September, and a report will be released at the start of next year, as I understand it. Infrastructure Australia is in a position to hear from the stakeholders. I encourage the cities in my area, the cities of Swan, Joondalup and Wanneroo, to make a submission to Infrastructure Australia, which has been tasked by the government to provide transparent advice for priorities for the future over a 15-year period. It will try to make sure that there is a bigger plan than just some short-term political fix, that there is actually an ongoing process that is reviewed and looked at every five years to ensure that the infrastructure that has been thought about and that will get funded actually does provide the cost benefits to the community, and to the business community for employment, that, basically, it makes people's lives a lot better. That is obviously a part of Infrastructure Australia's responsibilities. It is important that future growth is supported by the infrastructure that Infrastructure Australia can recommend to the government.

Of course, Infrastructure Australia will remain an advisory body. Ultimately, government still needs to be responsible, to be accountable to the people, and cannot just pass off that sort of responsibility. The point I would particularly like to make about the advisory capacity of Infrastructure Australia is that the projects will be assessed and then Infrastructure Australia's assessment will be loaded onto a website and can be looked at. There will be complete transparency, which is the way it should be done.

Infrastructure Australia's key priorities are to assess projects that are receiving government funding of $100 million or more, undertake an audit of nationally significant infrastructure and develop the 15-year plan on infrastructure priorities. It will be restructured to have a chairman, with a CEO and of course a board with whom the chairman will work. These are important things. They are important parts of our transparency. We know as well that it will not be just a matter of the $50 billion provided by the federal government. It is right that the Treasury has informed us that it anticipates that a further $125 billion in new infrastructure investment will also be achieved by the Commonwealth being able to contribute in this area through the work of Infrastructure Australia as an advisory body. It is a good future, it is a transparent future, it is going to be an effective way forward. This is exactly what needs to take place.

I look forward to seeing some projects from the Cowan electorate of Western Australia get up. Something I would like to see done in the Cowan electorate is a great deal more work on the main road, Wanneroo Road. Wanneroo Road is pretty much a dual carriageway—two lanes each way—but it carries a lot of traffic and a lot of traffic with a lot of load. While there are some parts of Wanneroo Road that could be extended or which could have a third lane added, the reality is that many parts of it could not support a third lane, because the houses are too close to the side of the road. It would be good to see overpasses above Wanneroo Road to try to improve traffic flow—at Joondalup Drive and Wanneroo Road and at Hepburn Avenue and Wanneroo Road. These would be good projects. I can see that there is enough room in these places to support that sort of infrastructure and there would be benefits for business and commuter traffic. Better traffic flows are better for the environment, as well as giving people the opportunity to get where they need to go a little bit quicker. Getting home quicker in the evening also yields a good social bonus, you might say.

I would also like to see an overpass on the Reid Highway going over Malaga Drive. That is a very congested intersection with very significant amounts of industrial traffic. That would be nice to see. I know the state government has it on their list to get done, but it would be good to try to move that along a little bit quicker with some federal money. Again, I know that there is a shortage of federal money at the moment, but, if the case can be made by the City of Swan in that case, or by the City of Wanneroo or the City of Wanneroo on the other matters relating to Wanneroo Road, there are some great opportunities there. If the case can be made to Infrastructure Australia about the value that could be achieved in the outer northern suburbs of Perth, it would be good to see such projects get up.

There are other projects as well. More needs to be done with Nangara Road—and again I know the Barnett state government has some plans there and some money to get that project going. Nangara Road is very much in need of a dual carriageway. There are many other intersections and other areas of road in Cowan and its immediate surrounds that could use work. Another important overpass to get done is at the intersection of the Reid Highway and the Mitchell Freeway. That is another choke point which is a problem for both commuters and some business traffic.

I can look at my electorate and say that there are many projects that would be good—but they need to be properly assessed. The cost-benefit analysis needs to be done to make sure that the money would be well spent. I know that. I am not trying to get any special favours for the electorate of Cowan, but I am determined to help make the case—to demonstrate to Infrastructure Australia just how good some of those projects I have mentioned would be. Before I conclude, I would like to thank the Assistant Minister for Infrastructure, the Hon. Jamie Briggs, for the support he has provided to get the $300,000 set of lights to fix up the black spot on the corner of Alexander Drive and Illawarra Crescent North, adjacent to Ballajura. It is a very important intersection—people have lost their lives there—and fixing it up is a great federal government project.

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

I will defend the coalition. If anyone accuses the coalition government of not having a sense of humour, I will be there to say otherwise. You have been in power for just over a year but you are only getting this bill to parliament now. In the course of that year, how much money have you thrown at projects? And you thought that now was the time to do cost-benefit analysis on infrastructure?

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

You could have done it when you were in government!

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

The thing is, Member for Hughes, you guys made this a big deal. This was your priority. 'We have to do cost-benefit analysis before any project that we do.' That is what you used to say. But then you spent the first 12 months throwing buckets of cash at projects—and you did not do a cost-benefit analysis until when? It is now nearly October and only now is this bill before the chamber. It is a farce. Look at all the projects that you did!

With the NBN, you criticised us for not doing a cost-benefit analysis, but then you went and defamed the NBN project. You put together a bunch of people to do your so-called 'cost-benefit analysis'. Among them you included Henry Ergas, a noted critic of the project—and he has been for ages. It is his right to be a critic, but it is not the right of the government to put someone in who has a fixed view, who will deliver a predetermined outcome from what was supposed to be an objective cost-benefit analysis. Off the top of your head, Member for Melbourne Ports, what conclusion do you think Henry Ergas arrived at after his cost-benefit analysis? Do you reckon he thought the NBN was good value for money?

Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

'Labor bad; Liberal good.'

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

There you go! That was pretty much the quality of the analysis. That was the cost-benefit analysis that you put together. You got a whole bunch of noted critics together, including Kevin Morgan—I have to say that I have a lot of time for Kevin, having known him through the union movement, but he has never been a fan of the NBN—then you get them to do this so-called 'cost-benefit analysis'. Tell me, though: where was your cost-benefit analysis when you chucked $1.5 billion at WestConnex? You just wrote it off.

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

So do you oppose it?

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

You know what? I do oppose a project that is not thought through. I do oppose a project like WestConnex that does not go fully into the city, does not connect fully to the airport and re-tolls sections of the M4 that have already been paid for. Apparently, the member for Hughes thinks it is a great idea that his constituents should pay again for travelling on sections of that roadway when they have already paid it off. He thinks that is a great idea. The thing is that his constituents, knowing his part of Sydney, do not go through the M4. The constituents I represent do and they should not be forced to pay for the M4.

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

And you oppose it?

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

I have already been critical of this project before. I have no problem criticising this project, because it does not do what it is supposed to do. There are already concerns about the management of that process, there are already concerns about the travel forecast and there are already concerns about the secrecy that is entailed around this project. The fact of the matter is that the coalition put $1.5 billion with no strings. The coalition did not say that it should definitely go into the city and they did not say that it should definitely go to the airport. The coalition is happy to impose tolls on a roadway that has already been paid for. That is scandalous.

But guess what? There was no cost-benefit analysis when they chucked $1.5 billion at that project. There was none whatsoever. There was the dodgy cost-benefit analysis that was done nearly a year after the coalition had been in office on the NBN, but there is no cost-benefit analysis on some of these other big infrastructure projects. We are expected to just basically pat the coalition on the back for finally getting around to doing something that they said was a big deal, after one year of being in office and billions being spent on infrastructure in the way that it is.

I heard the member for Banks earlier give his fractured fairy tale account of how the NBN went. A person who came from a sector that depends on good infrastructure in terms of broadband and communications and someone who has been involved in the digital economy bagging out the NBN is simply bizarre; but the fact of the matter is that he was wrong. The fact of the matter is that when the coalition was in government last time, they tried nearly 20 times to get broadband sorted out in this country.

The big sticking block for the coalition was that they could never get past Telstra. Telstra commanded the telecommunications industry. Basically, if it did not agree to something, nothing happened in terms of broadband. Go and ask Helen Coonan what type of blues she had with them. When Telstra did put forward plans on what they would do on broadband, they wanted to have a rate of return that the ACCC went pink on the face on and that the ACCC did not allow to happen.

When we got into government and we put forward the proposition that we wanted to upgrade broadband in this country through the National Broadband Network, we put aside a shade under $5 billion and we asked everyone to tender for it. The biggest telecommunications company and the sole tenderer at that time put in five pages for a $5 billion project. They put in five pages as a tender for a $5 billion project. Those five pages were not about a question of quantity over quality. Tender projects should not just be about reams of paper. What it said clearly was that they were not willing to play and that they would do what they always did in Telstra's case, which is to be litigious, take you through courts and make you get to plan 20—after the coalition had tried 19 times before—of trying to improve broadband in this country. It failed.

So we took the view that we would undertake landmark reform in telecommunications, we would basically do the job through a GBE that would be set up and we would ensure structural separation with Telstra. We went through that project. That was based on the public wanted, which was better broadband. What the coalition wanted to do was go through a cost-benefit analysis. That was not for the sake of going for a cost-benefit analysis to improve the project, but to delay the project.

When I had constituent forums in my electorate, I would have Liberal plants in the audience say, 'You should go through a cost-benefit analysis.' I said, 'You know what, I will not go to the politics of it. I will just ask the crowd.' These were people who had been struggling with pair-gain systems, faulty broadband networks in their area and ADSL that was not delivering to them. They were basically frustrated to their back teeth with poor infrastructure. When I asked them what they wanted, I would say to them, 'Do you want a cost-benefit analysis or do you want us to get the job done?' They unanimously said that they wanted better broadband. They do not need a cost-benefit analysis, because they have been waiting for so long and the coalition has failed to deliver. That is exactly what is happening under the coalition's regime now, where the rate of connections is dropping and the speed at which the coalition is rolling out the network is dropping. But they have got their cost-benefit analysis, so kudos there! The coalition has got their bit of paper. But the things that are required by the general public are not delivered.

Let us go to another big project that is going on right now. In January 2013, when the coalition was quizzed about it, they said they had no plans for a second airport at Badgerys Creek. That is what the coalition said. By the end of the year, the coalition was basically gearing up to make an announcement to build a second airport in Sydney. Where was the cost-benefit analysis on that? Billions of dollars were committed to that project. The coalition has already started the roadworks on that project as well. There is no cost-benefit analysis—none whatsoever—on a project that will have billions of dollars put to it.

The coalition has all sorts of figures about what it is going to do. They have dangled the whole jobs thing in front of people and suggested that it would be a big jobs creator, creating 5,000 jobs. We got that figure from a briefing that was convened by the Deputy Prime Minister, who then deigned not to turn up to the briefing and explain to Western Sydney MPs what would happen. That is 5,000 jobs in a region where there are nearly two million people. That is roughly one job for every 400 people in Western Sydney.

The coalition is going to commit all of this money to roadworks and all this money to the airport itself, but they have not put in a cost-benefit analysis on it whatsoever. We have seen enough examples of that in the international space and even here in Australia. Go to Avalon and see the glory that is supposed to be a second airport operating in one metropolitan area and you can see what is happening there. Go to Canada and see what has happened over in Montreal, where they have had a second airport there that is on its last legs as well. We are now committing to a similar sort of thing in building a second airport in one metropolitan area where there are concerns about its future financial viability.

The job figures are not fair dinkum. They are providing a figure of 60,000 jobs—which, by the way, is double the amount of jobs that are provided by Sydney Airport—for a configuration that is one runway and will only really provide 5,000 jobs. There is no cost-benefit analysis. On top of that, a 24-hour-a-day airport is going to be plonked right in the middle of one of the fastest-growing regions in the country, with two million people, and there is no environmental impact statement for that airport at all.

The thing that gets me is the fact that, due to the decisions of this mob opposite, the electorate that I represent is going to lose $270 million in schools funding over 10 years, and the university that is in our region will face up to 40 per cent in funding cuts, which will force people in the region that I live in to pay higher university fees to make up for those cuts, yet I cannot get things like an MRI for my local hospital. Those opposite will not fund that, and they cut funding to state governments for health care. They cut billions—$80 billion in combined cuts to health and education—they pushed through the changes on higher education, they force through cuts to family payments, they force people to pay to see a doctor, yet all the things that we need in our area are not delivered to the people that need those things the most. They do not get the service and infrastructure that they need, but they get an airport. They get a 24-hour-a-day airport with no cost-benefit analysis and no EIS. They are forced to have it because eastern suburbs interests want to have this airport plonked in Western Sydney. Those opposite do not give us the infrastructure that we want or the services that we want and need. Instead, they give us what they think we need, which has been the case for development in Western Sydney for quite some time.

Again, this is a bill where the cart is put before the horse and billions of dollars are committed on projects where no cost-benefit analysis is done. Those opposite have worked hard to cripple Infrastructure Australia's independence in its decision-making processes, and then we get this legislation as an afterthought. It is almost as though someone tapped the Deputy Prime Minister and the Minister for Infrastructure on the shoulder and reminded them that there is one outstanding thing stuck on the Post-it note that needs to be dealt with, so they cobbled this together and put it into parliament. It is an absolute farce in terms of what it does. It is not right for the nation.

Within cities, we should be able to have better ways to move people from one part of the city to another, to support economic development and decentralise economic development so that we do not have the pressure on transport systems. We should be able to find ways to make public transport work better. In my part of the world, people want to be able to catch a bus or a train to get to work. I am not Robinson Crusoe in this, and I am certain that there will be other members in the chamber who often have constituents come up to them and say, 'I would love to catch public transport; where do I park my car?' and point to a street with no facilities that is already jam-packed.

There should be clever thinking and there should be collaboration between federal, state and local governments to ensure that we provide facilities that better utilise public transport. I wonder if the federal government is doing anything on this issue. I wonder if the Abbott government has actually thought, 'How do we utilise existing infrastructure better by investing in other assets that allow people to use that infrastructure better?' The Abbott government has cut pretty much all spending to public transport infrastructure. There is nothing available at all to better use—

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

What did you do? What did state and federal Labor do?

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

What we did was achieve a massive increase in public transport infrastructure across the country. Once you are done re-announcing all the projects that we put in place, you will have nothing. You will have absolutely nothing, but you will finally get your cost-benefit analysis, and I am sure that will be of great comfort to people who want to see infrastructure in their area. They will not have roads, rail, ports or better infrastructure but they will have a report to rely on.

Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Written by Henry Ergas.

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

Yes, written by Henry Ergas and whoever else approaches these things with an eye-patch and a pen. You wonder whether they will actually get a fair dinkum report. This is a joke of a bill. (Time expired)

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

Prime Minister Tony Abbott said at the last election that he was determined to be an infrastructure Prime Minister committed to building the infrastructure of the 21st century to ensure Australia can meet future transport challenges. In the 2014-15 budget, the coalition government laid out a historic $50 billion for the Infrastructure Investment Program to deliver vital transport infrastructure across our cities, regional centres and rural communities. I commend the coalition's policy to (1) target investment in productive infrastructure, (2) complete projects faster, (3) partner with state governments, and (4) leverage more private sector investment.

As the Chairman of the House Standing Committee on Infrastructure and Communications, I take this opportunity to touch on some of the key findings from the current inquiry into infrastructure planning and procurement. Long-term planning is absolutely essential to ensure that Australia identifies and protects the land required for the infrastructure that we will all need in order to meet the increasing demand on our transport systems that results from a growing population and a growing freight task.

It is important to recognise that our infrastructure needs cannot be met by a single government or indeed by a single tier of government. Collaborating across all tiers of government is essential. Significant progress has been made in these areas; however, witnesses who appeared before the committee believe that there is still more to be done. It is important to recognise that improved planning can provide significant material benefits to governments, to the economy and, particularly, to the communities that are served by the infrastructure—including by providing some certainty for the private sector for their planning purposes and to make investment decisions, by providing opportunities to minimise the lifetime costs of projects, by providing maximum flexibility for the programming and scheduling of outlays, by minimising integrated transport and land use options and making urban development more competitive, and, importantly, by providing needed infrastructure on which the community relies.

Conventionally, state and territory governments have lead responsibility for infrastructure and land use planning, and they are supported in this role by local governments. However, witnesses have said that they see the federal government as having a particular interest and responsibility where these activities intersect with national interest. Australia's future productivity growth will depend to a large degree on our capacity to improve existing infrastructure and to develop new infrastructure which creates an integrated transport network across Australia. The committee recognises that this is an increasingly competitive task. Commonwealth, state, and territory interests intersect in a number of areas, such as inland freight rail, airports and ports.

Debate interrupted.