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

I pay tribute to all the members of the Standing Committee on Infrastructure and Communications and the witnesses who gave evidence in this inquiry into the very important issue of infrastructure planning, procurement and funding in Australia.

The previous, Labor government had established Infrastructure Australia to overcome some of the challenges associated with planning for infrastructure and, indeed, the politics that had been associated with infrastructure decisions in the past. IA is a body charged with developing a truly national long-term approach to dealing with and responding to the nation's growth, and restoring infrastructure planning to the heart of national economic management. Most of the recommendations of the government members' report complement and build on the previous, Labor government's initiatives to develop a more independent and effective system of infrastructure planning and delivery in Australia. We support the recommendation for a longer pipeline of projects than a 15-year horizon, and Labor moved amendments to support the government to allow the IA board to do this if it chooses to.

We also support the recommendation that a more planned approach be taken to providing the domestic skills base necessary to support efficient infrastructure planning and procurement. There was a very good suggestion made regarding 3-D imaging of infrastructure throughout the country. This may radically change the cost and time lines associated with infrastructure construction in the medium term and was the subject of a recommendation of this report. Labor strongly supports a robust method of capturing all costs and benefits of infrastructure proposals, including a proper analysis of the wider economic benefits of infrastructure. This method is important in public transport projects and active travel.

Infrastructure is a huge contributor to productivity. It creates current jobs and increases the numbers of future ones. Given the tight position the budget currently is in, it is vital that we select the best projects that ensure maximum productivity to the taxpayer and the best future returns to government for their investment. That is the basis of the Infrastructure Australia model that was established by Labor. It is led by experts and it takes the politics out of decisions regarding which projects are worthiest of government investment in infrastructure.

I want to thank my Labor colleagues on this committee, who prepared a very thoughtful and insightful dissenting report that notes and makes stronger recommendations in respect of planning for corridor reservation and acquisition, particularly in respect of rail projects and deficiencies of the government's approach to privatisation of productive state and Commonwealth infrastructure assets. The Labor members of the committee felt that the evidence showed a need for a Commonwealth authority that transcends the electoral cycle to work with the states, territories, local government and experts to pursue the designation of land corridors for the development of infrastructure, including high-speed rail.

It is fortuitous that the shadow minister for infrastructure has walked into the Federation Chamber at this point in time, because we all know that the shadow minister did excellent work as minister for infrastructure, working on preparing what has been the nation's most comprehensive study of the feasibility of high-speed rail in this country. Coming out of that report was the recommendation to establish a high-speed rail planning authority. The shadow minister for infrastructure currently has a private member's bill before the parliament which should be properly debated by the parliament and deserves thorough consideration and, in our view, support. There was a recommendation of the committee in respect of this, and significant evidence was taken by the inquiry supporting that view.

Mr Albanese gave evidence, and he said:

… support for an authority is an essential precondition. If it does not happen then you will lose momentum. That is the way that the bureaucracy and political class work. If there is not pressure on to keep the momentum and to keep it going, then it will just become another good idea with a report that is on a shelf. That is why I think structurally this is important.

Additionally, we received evidence from the former Deputy Prime Minister of Australia, Tim Fischer, who provided a very insightful and thoughtful written submission—again, supporting the approach of the shadow minister for infrastructure for the High Speed Rail Planning Authority—in which he had this to say:

… Capital City HSR "corridor close out" continues to occur, notably with some near disgraceful planning approvals around outer Melbourne, especially the dogs muddle unfolding at Donnybrook. Significantly international interest remains high re HSR possibilities including investment in Australian HSR by overseas interests but the clock is ticking. Now is the time for some bold decisions, now or virtually never.

That is the view of Tim Fischer, and I could not agree with him more.

So the Labor members have supported a recommendation in our dissenting report for the government to get on with consideration of the High Speed Rail Planning Authority Bill. The Labor members also accepted that the federal government should, through COAG, pursue a national system for registration of infrastructure related, and recognition of qualifications across Australia to better promote the efficient and cost-effective development of infrastructure. It was, however, noted that the federal government education and training policy needs to anticipate increased demand for local infrastructure planning procurement and delivery skills, and should have a skill supply policy that anticipates demand. Again, this was the subject of a very thoughtful recommendation by the Labor members.

The Labor members of the committee agreed that the government must develop innovative financing and funding models for the development of public infrastructure, and we supported the options that are listed in the report. However, we have expressed severe reservations regarding the government's Asset Recycling Initiative and its potential to incentivise privatisations of monopoly assets without adequate consumer and community protections. This is supported by the Productivity Commission's criticism of the structure of the government's Asset Recycling Initiative.

We also note that the federal government should fund projects on a mode-neutral basis to avoid distortion and inefficient investment decisions, and this includes funding urban passenger rail projects when they are identified as the best solution to a congestion problem. Just funding road projects sends a signal to cash-strapped states that roads are preferred and cheaper, and this has been noted by Infrastructure Australia as distortionary and wrong. It has been wrong, yet this is the approach of the Abbott government when it comes to planning for what is probably some of the most important infrastructure in moving Australians around, particularly in bigger cities.

It was also strongly argued by the Labor members of the committee that the Australian government should ensure that all projects with a capital value of over $100 million have a cost-benefit analysis assessed by Infrastructure Australia using a standard method capable of comparison across projects and that the evaluation should inform funding decisions and therefore should occur prior to any proposed allocation of funds. This is something that Labor believes wholeheartedly in. There must be adequate cost-benefit analysis of big projects before decisions such as this are made. A classic example of this is the WestConnex project in Sydney, and the fact that the WestConnex project will go past the biggest port in the country, at Port Botany, and yet not connect up to Port Botany at all, putting additional pressure on local roads in my community and in the member for Grayndler's community and other surrounding suburbs—but also, importantly, hampering the economic development of the country by not having the biggest road project in the country's history connect up with the biggest port, when it is a matter of 100 metres away. It is a crazy proposal to be considering. If Infrastructure Australia were tasked with doing proper cost-benefit analysis, we could avoid problems like this.

On the whole, it was a good process. I thank the members of the committee. In particular, I thank those Labor members of the committee for their very thoughtful dissenting report.

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

I welcome many of the recommendations that are contained in this report on infrastructure planning and development by the Standing Committee on Infrastructure and Communications. I am glad that there is bipartisan support for a rigorous, evidence based approach to the delivery of new roads, railway lines and other critical infrastructure.

During the period of the former government, we created Infrastructure Australia, which delivered the nation's first evidence based process for infrastructure planning. It was given the role of breaking the nexus between the political cycle, which is by definition short term, and the infrastructure investment cycle, which is much more long term. It did that by assessing the business cases of the projects competing for Commonwealth funding and by being transparent in publishing those business cases. The creation of Infrastructure Australia was perhaps the most important development in this policy area for decades.

The problem with this government is that, whilst its committee members are supporting that process, its actions are undermining that very process that was established. The government introduced legislation which would have completely undermined Infrastructure Australia's independence, and the House of Representatives carried it; but they could not get it through the Senate. It then acted to ensure that Michael Deegan, the head of Infrastructure Australia, left that position in February 2014, and it did not fill that vacancy for more than a year, thus showing its contempt for those processes.

But, worst of all, in the Abbott government's first budget, there is not a single project that was approved by the government which had been through the Infrastructure Australia process. There is not one. It did not have many new projects. As you are aware, Mr Deputy Speaker, there were projects like Gateway WA in your electorate, which was funded and well underway with 2,000 workers on site and under construction when, during the Western Australian Senate by-election, government ministers travelling to Perth were pretending that somehow this was a new project. In other cases, projects like the Swan Valley Bypass was renamed NorthLink WA, and the F3 to M2 renamed NorthConnex, and the government pretended both those projects were new projects. A new name does not make it a new project. In other cases, the government has cut back funding for projects that were recommended by Infrastructure Australia—projects such as the Cross River Rail project in Brisbane, the Melbourne Metro Rail Project and the M80 Ring Road project in Melbourne—in order to fund projects that had not been through the IA process. These are projects such as the East West Link in Melbourne, WestConnex and the Perth Freight Link—prior to the federal election in 2013, no-one in my department had even received any request from the WA government for such a project.

What they did, though, was cut money from projects that had been approved and been through proper processes and funded projects that we now know—in the case of East West Link, the worst example—do not stack up. East West Link has a cost-benefit analysis of 0.45, or 45c returned for every dollar invested. In order to fund that, they took money from the managed motorways projects such as the Monash Freeway managed motorway in Melbourne that has a BCR of above five—it is above five—and the M80, which has a positive analysis as well. It is one thing to talk about proper process, but it is another thing to engage in it—and this government has completely failed when it comes to engaging.

There are very positive things in this report, such as the call to capture all costs and benefits of infrastructure proposals, including wider economic benefits. Value capture of new infrastructure projects is something that can lift the value of those projects and paint a true picture of the wider benefits of investment in infrastructure. An example of that was the announcement made by Luke Foley, the leader of the New South Wales Labor Party, last Friday when he and I attended Badgerys Creek, the site for Sydney's second airport. He indicated that value capture should be built into the arrangements around the lease of the second airport so that a railway line can be built.

You need public transport to make that airport function properly. You need it now and not decades into the future—just as the roads need to be built. Once you do that you get better outcomes. The Baird government, of course, criticised that, but there is no difference between this and the developer contributions that are put in place for new housing to provide those basic infrastructure services, such as water and electricity. It does need to be factored in. Once it is, infrastructure can be painted in the right light.

This report is an important contribution to the debate. It is also important for what is not in it, and for what is contained in the dissenting report. The dissenting report goes through the distinction between what the government has said it would do and what it has actually done. It goes through the importance of having a cost-benefit analysis of all projects with a value above $100 million and of that being a transparent process. That is nothing more and nothing less than what the government promised it would do prior to its election in 2013.

The dissenting report also calls for Commonwealth investment in public transport. That is absolutely common sense. The Prime Minister has this bizarre world view that the Commonwealth should not invest in public transport. The government justifies that by saying that the states run the public transport network. Yes they do, but they also run the road networks in Perth and Sydney and Melbourne and Brisbane. So it is an absurd distinction. The Prime Minister, in his book, Battlelines, had this to say:

Mostly, there just aren’t enough people wanting to go from a particular place to a particular destination at a particular time to justify any vehicle larger than a car, and cars need roads.

This is a bizarre world view about our modern global cities, which need public transport investment as well as roads. By not investing in public transport, there is a distortion of the market, and you will see over a period of time a failure of Australian state governments to invest as well.

There are also important recommendations in the dissenting report about cooperation and corridor protection. There is nowhere where this is more important than in the high-speed rail issue. I was in Albury on Monday with our candidate for Albury in the state election, Ross Jackson, promoting high-speed rail. High-speed rail will transform those regional cities along the route as well as having benefits for intercity capital transport, with three hours between Sydney and Melbourne and Sydney and Brisbane. There is broad support for it, which is why I gave evidence before this committee inquiry about my private member's bill. My High Speed Rail Planning Authority Bill should be carried by the parliament; it is in line with the recommendations of the advisory group that included Tim Fischer, Jennifer Westacott from the Business Council of Australia and Bryan Nye from the Australasian Railway Association.

This is the sort of visionary project that Australians want to see progressed by the government. It cannot occur over the short term, but over the long term it will have an enormous benefit. A cost-benefit analysis showed $2.15 of benefit between Sydney and Melbourne for every dollar invested—a lot better than the East West Link which this government still says should proceed, despite the fact that the evidence is in. I commend many of the committee's recommendations but I particularly commend the dissenting report. (Time expired)

Debate adjourned.