Prime Minister Malcolm Turnbull today refused to respond to serious concerns about the efficacy of his plan to build a train line from the Melbourne CBD to the city’s airport without actually spending any money.
Prior to the delivery of Budget 2018, Mr Turnbull attracted widespread media attention by vowing he would invest $5 billion in the Melbourne Airport Rail project.
But the Budget included no funding for construction, with Mr Turnbull claiming the rail line could be delivered off-budget via an equity injection.
It is a basic principle of budgeting that for projects to be taken off-budget, they must be able to produce a return to the Budget to cover both the cost of their construction and their operating costs.
While equity funding can deliver some projects, it does not work for public transport. While public transport boosts economic productivity, passenger trains do not produce commercial returns.
This is why a range of experts have questioned Mr Turnbull’s approach. For example, the Grattan Institute has warned: “If infrastructure projects are never going to make a commercial return, the government should stop pretending they will.”
Today in Question Time I asked Mr Turnbull to respond to these concerns.
He defended the equity funding proposal.
The Coalition has been cutting infrastructure investment in Australia for nearly five years while pretending otherwise.
But Mr Turnbull’s funny money plan for the Melbourne Rail Link sets a new benchmark in public policy fantasy.
The Prime Minister must explain how he intends to fund his $5 billion Melbourne Rail investment.
If he continues to maintain his sham funding proposal, Australians are entitled to conclude the rail line to the airport will never be built.