Asset Recycling Fund and infrastructure - speech in Parliament

Mr GILES (Scullin) (13:14): In rising to make a contribution to debate on the Asset Recycling Fund Bill 2014 and the Asset Recycling Fund (Consequential Amendments) Bill 2014, I will start by reflecting on two aspects of the contribution of the previous speaker, the member for Hume. He referred to the position of the experts, in terms of this government's approach to infrastructure provisions, as being 'clear'. I agree with him in so far as that, but the conclusion he seeks to draw is simply not tenable. What the experts want out of a Commonwealth government's approach to infrastructure provision is transparency and adherence to a strong evidence base which meets the productivity challenge of Australia. That is little in evidence under this government, as I and other Labor speakers have said on many occasions since the election when we have debated infrastructure in this chamber.


I also note that the member for Hume did effectively set out, I believe, the scale of the infrastructure backlog we confront in Australia today and its relationship to the productivity crisis and challenge we must confront head-on if we are to preserve our standard of living. Insofar as he made those remarks in setting out the challenge, I am entirely in agreement with the member for Hume. But, in agreeing with him in that regard, I see a very different path forward for the role of the Commonwealth with respect to infrastructure.

I have spoken regularly in this place about Commonwealth spending in infrastructure. This is partly because I represent an outer suburban electorate, an electorate that requires considerable investment in infrastructure across all asset classes. I am very pleased to say that under Labor it received its fair share. I have also spoken about Commonwealth spending in infrastructure because I believe the Commonwealth government has a vital role, a key role, in investing in the infrastructure of our cities—a role this government appears to be in denial about, even though it goes to the very heart of the productivity challenge that we face, as well as to pressing concerns about liveability, sustainability and of course equity.

More generally, I am concerned to see Australia, through the Commonwealth, secure our infrastructure future in real rather than rhetorical terms, and delivering, not passing the buck to other tiers of government. In addressing these bills—I should make clear that I am also in support of both amendments foreshadowed by the member for Grayndler—I believe it is important to place them in their proper context: how our self-described infrastructure Prime Minister is going about meeting this great productivity challenge Australia faces.

I now turn to the provisions of the bills before us in turn. I note that the purpose of the Asset Recycling Fund Bill is to establish the Asset Recycling Fund as a dedicated investment vehicle with a focus on providing financial assistance and incentives to states and territories to create new productive infrastructure. The purpose of its companion bill is to make the consequential amendments required to other statutes to enable the effective operation of the fund. In short, these bills provide an incentive to privatise state or territory owned assets and to recycle the proceeds into new productive infrastructure.

While it has been said that this is the only recycling members of this government are inclined to support, I should point out that this clearly is not so. They are more than happy, as the member for Grayndler has set out, to recycle and rebrand Labor infrastructure and investment as their own work. Of course, to talk of recycling in this context is another example of this government's recourse to Orwellian language. When we talk about recycling, we are of course talking about privatisation.

The Commonwealth contribution is to provide the state or territory with an additional 15 per cent of the reinvested sale proceeds of the cost of infrastructure projects. These bills are the vehicle for putting into effect the National Partnership Agreement on Asset Recycling, which was signed by all state and territory leaders in May this year.

Under the main bill the fund will receive an initial contribution of $5.9 billion at commencement, comprising uncommitted funds from the Building Australia Fund and the Education Investment Fund. Both these funds were formed by the former Labor government to fund land transport and education infrastructure projects respectively. So the money in this fund is of course Labor money. Under both of these Labor funds, projects to be funded by the portfolio minister were subject to recommendations by an advisory board as to their merit, and crucially this requirement is not duplicated in the legislation before us now. This is a major omission and a major concern.

Privatisation is, to me, far from a self-evident good, although I should point out that Labor is not opposed in all circumstances to the privatisation of certain public assets, and we will consider and have considered proposals on a case-by-case basis. We will support privatisation only where it is in the public interest to do so following proper independent scrutiny of this process. A case in point is Victorian Labor's proposed leasehold privatisation of the Port of Melbourne in order to fund vital transport infrastructure to replace one-third of Melbourne's level crossings with underpasses or overpasses to increase safety. I am personally very comfortable in supporting this decision. As alluded to earlier, clearly Labor governments of South Australia and the ACT have signed the Asset Recycling Initiative.

As far as Commonwealth spending on infrastructure goes, in government Labor clearly leads the way, as of course it should. We saw this in the funding of nation-building infrastructure projects, including setting governance standards that allow decisions to be made in the national interest, not on the whims of the National Party or indeed narrow electoral concerns more broadly. Labor lifted infrastructure spending at the Commonwealth to record levels and, under the previous government, saw Australia rise from 20th in the OECD in terms of spending on infrastructure as a proportion of GDP to first. We did so without privatisation funding this and without passing the buck to other levels of government. On a per capita basis, I note we were talking about an increase in funding from $132 per Australian to $225.

This is not a debate about privatisation or spending on infrastructure. At issue here are questions of process, oversight and governance. All of these factors are essential in ensuring that the infrastructure that Australia needs gets built and that Australian taxpayers now and in the future get good value for money in contributing to a more productive economy and enhanced liveability.

Labor's mechanism for achieving these goals was the creation of Infrastructure Australia, the purpose of which has been to research and rank proposed infrastructure projects based on their potential to add to our economic productivity. This was the implementation of an election commitment, of course. The current governance arrangements are for the Infrastructure Australia Council, the remit of which is set out in the Infrastructure Australia Act, to provide advice to the minister. Additionally, the Infrastructure Coordinator was established to assist the council in the performance of its functions. The previous minister made decisions based on advice of this independent panel. The point of this process was to depoliticise infrastructure spending and importantly also to decouple the infrastructure cycle from the all too short political cycle—the long term and the short term—and to establish a framework, an integrated policy approach for the provision of infrastructure in a strategic manner. This is what I believe nation building should look like. It is Labor's approach.

One major piece of infrastructure that Labor committed to and budgeted for was the Melbourne Metro rail link. This was part of an overall investment in urban rail that represented more investment in urban rail infrastructure than that of all of Labor's federal predecessors combined since Federation—over $13½ billion. Stage 1 of this project was identified by Infrastructure Australia as ready to proceed. Infrastructure Australia describes the project as:

… a project that is expected to shape Melbourne’s future transport network and land use patterns. The preferred option presented could achieve up to 30 per cent capacity increase in the urban passenger rail network however the project cost is approximately equal to the benefits.

It is not just Infrastructure Australia and federal and state Labor who are in favour of the Melbourne Metro proceeding. Tourism & Transport Forum Chief Executive Ken Morrison has said that the Melbourne Metro project needed to be funded more swiftly, stating:

We urge the government to look at ways to fund the project so it can commence as soon as possible.

Committee for Melbourne Chief Executive Officer Kate Roffey has also backed Melbourne Metro and urged its urgent funding, saying:

… we believe waiting until the end of the decade is too long.

This is about ensuring that taxpayers get value for money and making sure the projects that are the most necessary go ahead. It would be a tragedy for Melbourne if the Melbourne Metro is replaced by a half-baked option, which appears likely to be the case should the people of Victoria not get the government they deserve at the end of this year and not get support from a Commonwealth government that is prepared to invest in our cities and especially urban passenger rail.

In Melbourne we are seeing what happens when this process is turned around, with the what can only be described as bizarre announcement by the Prime Minister of funding for the East West Link, or perhaps the east-east tollway, as it should be described. The Prime Minister has not seen, and as far as I am aware no Victorians have seen, a business case for this proposal. The decision to fund roads like the east-east tollway breaches another one of the Prime Minister's so-called fundamental election promises—too many broken to count by now. This promise was to subject any infrastructure project worth more than $100 million to cost-benefit analysis. For this project, the Prime Minister will give the Victorian government advance payments of $1.5 billion by the end of this month, despite having produced no business case and despite the fact that $1 billion of this money is for stage 2, construction of which will not begin until 2015-16 and for which we do not even have a map. This breaches another commitment to refuse to hand out money for states unless milestones on planning and construction have been met. This is an absurdity that Labor's amendments would prevent.

A secret report prepared by the construction firm Veitch Lister for the Linking Melbourne Authority in June 2003 obtained by The Age found that East West Link will trigger huge increases in traffic on key sections of Melbourne's road network with parts of Hoddle Street, already a disaster, amongst the worst hit. The modelling reveals hundreds of thousands of motorists face more rather than less congestion as a direct result of this $6-8 billion project. Melbourne University planning expert Alan March was quoted as saying the money being spent on the road would be better invested in public transport, health or education. Dr March warned that international evidence suggested that such projects tended to add to traffic problems over the long term. He said:

All of the evidence all over the world suggests these sorts of projects are unlikely to fix things in the longer term … It is as if the government is determined to press ahead with a truck-based transport system at all costs irrespective of the impact on the rest of the city in the longer term.

I could not agree more. Why cannot money from the fund established by these bills go towards urban rail? Perhaps this is yet another reason that oversight of infrastructure spending has been reduced and politicisation increased. I remember the Prime Minister wrote in his book Battlelines of 'kings in their cars', and so presumably the rest of us are peasants on public transport to our Prime Minister. The then Leader of the Opposition and now Prime Minister made some strange remarks before the election in asserting that 'the Commonwealth had no history of funding urban rail' and that 'it is important that we stick to our knitting—and the Commonwealth is knitting when it comes to funding infrastructure such as roads.' This sums up this government's approach to this debate. It is just a triumph of the 'I reckon' school of public policy making, with the two coalition parties working hand in hand—the ideologically blinkered, who cannot abide public transport, and their friends in the National Party, the party that brought us regional rorts. We saw that under Howard and we will see it again. The Australasian Railways Association Chief Executive Officer Brian Nye described Mr Abbott as demonstrating that he 'simply doesn't understand public transport.'

Mr McCormack interjecting—

Mr GILES: Clearly, the Prime Minister is not alone amongst members opposite. Mr Nye also said that this refusal to fund urban rail 'should send shivers down the spine of commuters everywhere'—as it does, in Scullin and I am sure right across Australia's cities and towns. Mr Nye pointed out that public transport use has almost doubled in Australian cities in the past decade and that more investment is needed to keep our cities from grinding to a standstill over the next 20 years. Grinding to a standstill—what would that mean for the productivity challenge the member for Hume spoke so eloquently about only a few minutes ago? Mr Nye asked:

Clearly not everyone can afford an inner city car parking space, so how does Mr Abbott propose our growing population will get to work each day if he refuses to fund public transport?

Mr McCormack interjecting—

Mr GILES: That is a good question, and it is very disappointing that the parliamentary secretary has no interest in the circumstances of four out of five Australians and more than 84 per cent of our economic activity. This is a very good question. In particular, it is a good question for the constituents of Scullin, Lalor, Makin, Newcastle, Wills and Chisholm—particularly outer suburban constituents who have little option other than to drive, because jobs are increasingly located near the CBD at the moment, despite the tight financial constraints many of them live under. I note recent work has highlighted the cost-of-living impact. The cost-of-living impact of effectively requiring outer suburban residents to drive is something that the members opposite were very keen to talk about in opposition but they have little to say about it in government.

In conclusion, it is vital that both amendments proposed by the opposition are supported. This would go some way to bridging the massive chasm between the rhetoric of the government's position on infrastructure and the dismal reality that is condemning Australia's cities and Australia's productivity more generally to a second-best future.

The DEPUTY SPEAKER ( Hon. BC Scott ): It being almost 1:30pm, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.

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