Joe Ludwig (Queensland, Australian Labor Party) Share this | Hansard source

I rise to speak on the Asset Recycling Fund Bill 2014. Australia's infrastructure is too important to be left to pork-barrelling and the whims of the political cycle, especially the whims of this government. In the committee stage, Labor will seek to pass two amendments. We will look for crossbench support, because it is about ensuring that there is transparency and openness of the process for approving infrastructure projects. All Australians would want that, to ensure that there is scrutiny of those infrastructure projects. The coalition's plan for asset recycling has three major flaws. Firstly, it does not allow for independent scrutiny of the infrastructure projects. Secondly, it distorts the state government's decisions on asset sales, promoting the ill-thought-through selling of assets for short-term gains. Thirdly, it does not guarantee any new money for investment in infrastructure.

Infrastructure spending under Labor rose to record levels. We went from being 20th in the OECD, in terms of spending on infrastructure as a proportion of GDP, to first, under Labor's watch. Labor lifted funding for infrastructure from about $130 for each Australian to about $220. Labor doubled the roads budget, to $46.6 billion, and upgraded 7,500 kilometres of road. But we also recognise that it is not enough just to increase funding. The money has to be spent on worthwhile infrastructure that will create not only returns for Australians but productivity increases into the future. Labor created Infrastructure Australia to research and rank proposed infrastructure projects based on their potential to add economic productivity. Infrastructure Australia introduced independent advice and the opportunity to add transparency and openness into the process for planning for infrastructure in Australia. Labor also planned for the future. The National Ports Strategy and National Land Freight Strategy meant that informed decisions could be made about infrastructure investment in the context of a broader plan for ports and freight. Infrastructure, without this sort of strategic plan, is just a recipe for expensive white elephants. This government wants to throw up plenty of those.

We on this side of the chamber are proud of Labor's achievement in infrastructure. Indeed, this government seems proud of Labor's achievements too. Almost all of the coalition's announced infrastructure projects are re-announcements of Labor funded projects. Take one example. Take the Bruce Highway. During Senate estimates, we learnt there was no new money. Mr Truss uses the terms 'locked in', 'confirmed', 'affirmed', 'reconfirmed' or 'recommitted', but what he really should say is simply 're-announced'. Labor invested $5.7 billion in the Bruce Highway, dwarfing the $1.3 billion spent by the previous Howard government. For all their rhetoric, under the Howard regime they did not spend on infrastructure. Labor delivered four times the funding in half the time. Labor remains committed to improving the Bruce Highway, fixing up the area that the Howard government failed to act in and this government is also ignoring.

The coalition has failed to follow Labor's lead in investing in important Queensland infrastructure. The Cross River Rail project is a good example of a coalition failure. Infrastructure Australia said the Cross River Rail project was a strategic priority for Australia's infrastructure, and it judged the project as passing the cost-benefit test and ready to proceed. The Liberals have pulled $700 million out of the project. It defies good decision making and shows that this government is focused on pet projects and not projects which can drive productivity or develop infrastructure from the best business case. The federal government already provided the bulk of funding for large infrastructure projects, so this needs to be protected and not raided by this government to pay for the Asset Recycling Fund. This Asset Recycling Fund must provide funds in addition to existing federal commitments. There must be new nation-building projects in road, rail and other nationally significant infrastructure, otherwise it is just recycling in truth.

We know we cannot trust the government on this. We have seen already the twisted priorities of the coalition government—the way they try to hide their cruel cuts to pensioners and ordinary Australians, pretending that taxes are not taxes really and that cuts to education and health are not truly cuts. They use miserable words to describe their short-sightedness, but the country cannot afford those cuts and cannot afford cuts to infrastructure. As a start, they are taking $2.4 billion from the Building Australia Fund and $3.5 billion from the Education Investment Fund for the Asset Recycling Fund. What they effectively are doing is shuffling the money out of one area into another, claiming that it is new money. It is not new money from infrastructure; it is already there.

On top of that, they are also taking cuts from local government which are going to hurt local infrastructure. I know in Queensland lots of local councils are going to be affected. Recently, I visited Councillor Jim Madden of Somerset Regional Council to highlight this fact because they face a stark choice: either they have to raise rates or they have to cut their budget, cut roads spending and cut infrastructure spending. What sort of choice is that? It is not only blame shifting; it is also show cost shifting coming out of a hard budget. The Abbott government has broken its promise to regional Australia. Mr Warren Truss said before the budget:

To ignore regional Australia’s need for investment and growth is to turn our backs on the opportunities for the future.

In just two weeks, the Abbott government have savaged local government by ripping a billion in funding from local government, cutting into the financial assistance grants. Local governments rely on those grants to fund local roads and infrastructure. The government have created an Asset Recycling Fund. They want to gold plate highways but they will end up with broken roads because councils will be starved of funds to meet their obligations in investing in a road network. It is about a road network not about a gold plated highway. If it fails at the last mile, at the shopfront, at the small business or at the home, it is not a road network. These cuts will disproportionately affect rural communities, pushing some of them to the brink. These cruel cuts will mean more roads that go nowhere and bridges to nowhere as real communities suffer. These are contradictory forces at play and it is not surprising when you look at the twisted priorities the government have.

The decision to sell assets needs to be made by the state government after sober analysis. Liberal state governments have been seduced by the short-term incentives of the political cycle to sell assets. The additional 15 per cent proposed by the federal government does skew the incentives of the state governments and encourage sales of assets. It pushes the sale of assets in the short-term interest without looking at the longer term national interest. The federal government needs to play—and it has been absent from the field—a leading role with states the territories to encourage decisions to be made in the national interest. Although asset recycling is not without its merits, in some cases it is not always the answer. The answer for many state-owned assets is better and more transparent management. The erosion of freedom of information under this government and cuts to information-gathering organisations which make proper decision-making possible are working against these outcomes of openness and transparency.

This government hugs the dark. It prefers the shadows. It does not like transparency. Why? Because it does not like the truth about its decisions to be exposed. They are bad decisions by a government which wants to take cruel cuts. It takes cruel cuts to the Australian Bureau of Statistics. These are also quite concerning. This government does not want to know about that state of its books. It does not suit its ideological views. ABS cuts hurt private businesses just as much, especially small business which does not have the resources to forecast or run surveys and the lack of information means that when you remove information from the availability of the pool, where do get decision making? You end up with poor decision making without the charter and all you get is it—cash created by the federal government for the states. The government seems to be wilfully blind to this prospect. That is the kindest I could say about it. I could say it is deliberately doing it but I think ultimately it is literally blind to the consequences.

We have seen the forecasts and estimates for asset sales and infrastructure projects. Again, they seem to be very overly optimistic. We will get an opportunity in the Senate to hold this government to account on their forecasts. Let us not hear from those on the other side that, 'We didn't quite get that right. Our methodology was flawed. We missed some opportunity.' In this instance they own these figures. An article in the Oxford Review of Economic Policy found that 50 per cent of traffic forecasts in infrastructure projects were wrong by at least 20 per cent. If we further reduce the quality of data and research, those estimates are going to get more and more difficult. We need to consider the facts of asset sales and not some ideological driven crusade by those opposite—although they do seem to like Don Quixote.

The Australian Competition and Consumer Commission is warning the government that it needs to be wary of asset sales. Speaking to the Committee for Economic Development of Australia conference, Rod Sims, the chair of the ACCC, warns about privatisation and the perverse incentives present for the state governments. He said:

Short-term gains of maximising the up-front price received by the government is short-term gain increased and encouraged by the federal government and will have long-term costs in reduced competition and higher costs to consumers and damage to Australian businesses.

I think the quote from Mr Sims says it all:

The ACCC is becoming aware of an increasing level of concern among businesses that are most directly affected by the sale of upstream monopoly assets to downstream competitors. The trade-off here is short-sighted and the costs in terms of productivity and investment are likely to be significant

He also said:

Privatising in ways that limit competition in order to maximise the sale proceeds is the wrong way.

The government's rush to sell off assets without examining the long-term consequences means that we pay a high price for this asset fire sale, and businesses and ordinary consumers footing the bill will suffer. Instead of investing in infrastructure with a strong business case, the states and federal government are investing in public relations. You do not have to look far to find a good example: the Queensland government has spent $6 million on an advertising campaign instead of investing in the analysis necessary for the business case for asset recycling. Instead of showing the business case for asset sales, they are being offered websites, TV ads and glib one-liners to support why they should sell assets. This shows utter contempt for Queenslanders. If there is a business case, which includes the long-term impacts of asset sales, show it to the people, be transparent about it, demonstrate why it is necessary rather than a one-word slogan.

Labor is seeking, as I indicated earlier, two amendments to improve this bill and increase the transparency and openness of the process of approving infrastructure projects. The first of our amendments allows for the tabling of a disallowable instrument for each privatisation reinvestment transaction so that, if the government is not going to cast light on their projects, then the Senate can have a look at the projects. They can be properly scrutinised by parliament.

Second, our amendments would require projects to be assessed by Infrastructure Australia and be deemed productivity enhancing. That is what infrastructure, building for the future, is all about: making sure we have got assets that will increase our productivity now and into the future. Projects, including an estimate of the productivity gain from the project, should also be published.

This cost-benefit analysis must include the true cost of these sales. What are the lost revenues to government? What is the effect on competition? What is the effect on consumers? What is the effect on jobs? What is the effect for rural communities? Is the sale just short-term political expediency or is it in the nation's interest?

You have to ask: why is the federal government afraid of these questions? They want to hide scrutiny. They don't want these questions answered, and it leaves a huge question mark about the motives of this government when it turns to asset sales.

The threat to assets is most grave in Queensland. The debt and deficit falsehood set by Canberra has spread to governments like the Newman government but sometimes it gets lost in translation. The Newman government has been witless enough to take up the Abbott government's debt rhetoric at face value. They have promised that asset sales will be used to reduce debts and not to recycle assets. The combined ineptness of the Abbott and Newman governments means Queenslanders will suffer twice. Queenslanders will be paying their taxes to provide a bounty, effectively, to the ideologically driven sale of other state assets while Queensland stock of infrastructure will deteriorate and not be replaced.

The Toowoomba Second Range Crossing Project I have taken a very special interest in—there are many in Queensland, who live on the other side of the range, who also follow this with a passion. I hope that some of the light I have attempted to shine on this project will mean an end to the waste and prevarication from the Abbott government on this project. I am concerned that this three-year project as detailed in their own documents has been pushed out to five years. Every year's delay costs $100 million, but don't take my word for it; take Mr Truss's own figures. These accounting tricks, costs pushed out beyond the budget forward estimates, have real costs for ordinary Australians.

This is infrastructure on the never-never by a government that is using all the tricks in the book to try to achieve a smoke and mirrors on infrastructure.