Aug 20, 2014

Speech to the Future of Infrastructure Conference – Infrastructure can shape the future

Melbourne

Thanks for the invitation to speak to you today.

I’m pleased that the infrastructure community is taking this opportunity to reflect on the past, but, more importantly, to also imagine a better future.

That’s because imagining the future sits at the heart of infrastructure planning.

Every person in this room wants a prosperous future – for themselves and those who follow us.

While many factors that influence prosperity and happiness are well beyond the control of governments, one of the things we can control is whether our infrastructure development keeps up with growth.

If we do not invest in infrastructure today, we will bequeath future generations an infrastructure deficit.

And they will have less capacity to deal with that deficit, because growth will be slower because of our failure to keep up with infrastructure needs.

At the very least, today’s leaders must see it as their responsibility to ensure that the world we hand our children comes with infrastructure that is fit for purpose.

If we are on the ball, we can do a lot more.

The real challenge of contemporary infrastructure policy is not just to meet existing and projected needs, but to use effective planning to shape a better future.

For an example that is close to my heart, consider public transport in cities.

Governments of today face a choice.

They can do nothing on public transport and watch worsening traffic congestion erode amenity and productivity.

Or they can act now and invest in public transport solutions that will not only deal with today’s transport challenges, but also help guide future development.

By being proactive, governments can actually make communities more liveable, sustainable and more productive.

Productivity is critical, because without it, we won’t create jobs for the future.

That’s what I would like to focus on today.

 

THE FUTURE IS THE RECENT PAST

The theme of your conference is the Future of Infrastructure.

As Albert Einstein once said, the only source of knowledge is experience.

My experience as Minister for Infrastructure between 2007 and 2013 convinced me that some of the key principles that should underlie infrastructure provision in the future can in fact be found in the recent past.

I’m talking about proper processes.

If we want to make the right decisions about roads, railways and ports of the future, we need a proper, evidence-based process to help guide decision-making.

Without evidence-based decision-making, politicians in charge of huge infrastructure budgets will always be tempted to spend them in their own electorates, or in the electorates held by their parties.

That has happened in Australia in the past.

The most-famous pork-barrelling allegation I ever heard comes from Queensland in 1980s.

Former Queensland Roads Minister Russ Hinze had his department design a new highway with an off-ramp that would efficiently take traffic into the drive-in bottle department of a pub he owned near the Gold Coast.

While such blatant events are hopefully rare today, you don’t have to look far to find pork-barrelling.

It is not that long since the so-called regional rorts scandal of the latter part of the Howard era.

And right now the current Abbott Government is directing billions of public dollars to road projects around the nation that have not been the subject of cost-benefit analysis.

That’s a direct breach of its election promises.

It’s a throwback to an unfortunate and wasteful past.

Whatever disagreements different political parties have on infrastructure policy, surely we can at least agree on a system that directs scarce public dollars into the projects that can do the best for our nation.

When Labor took office in 2007, we took our lead from former US President Bill Clinton, who said in a radio appearance in 2000 it was “time to turn off the pork barrel spigot and deliver for our children’s future’’.

We believed that the best way to turn off the pork barrel was to craft a better process for deciding how to invest.

  • A process that made it easier for politicians to resist the temptation to make decisions based on political considerations.
  • A process based on hard evidence, not the electoral map;
  • A process that could drive gains in economic productivity gains for the national benefit.

So we created Infrastructure Australia and staffed it with experts to carefully examine proposals for major projects and rank them in terms of their potential to contribute to growth in national economic productivity.

While we reserved the absolute right of elected representatives to make decisions, we asked the experts to strip the politics from the issue.

Our aim was to entrench Infrastructure Australia so both sides of politics would embrace its advice, creating a pipeline of projects which would be the subject of bi-partisan agreement.

This is the single most-important reform in the history of infrastructure policy since Gough Whitlam created the Department of Urban and Regional Development in 1972.

It ended a system which had been too open to pork barrelling and political games.

And it provided the opportunity for a more proactive approach to infrastructure delivery – one that would not just solve the problems of the day, but would also shape a better future.

Infrastructure Australia has since made a valuable contribution to advancing the infrastructure debate.

It created the nation’s first national ports strategy, national land freight strategy and urban transport strategy.

It also produced an Infrastructure Priority list – a pipeline of projects that, in the opinion of independent experts, would deliver the projects with the most capacity to boost national productivity.

In office, Labor funded all 15 of Infrastructure Australia’s priority projects.

When Labor took government we inherited an infrastructure deficit which we addressed by boosting investment on roads, ports, railways and other infrastructure.

We doubled the roads Budget, building or upgrading 7500km of roads.

We built or rebuilt 4200 km of railway track.

We allocated more investment to urban public transport than all previous Commonwealth governments since Federation put together.

When Labor took office Australia was 20th among OECD nations in terms of infrastructure investment as a proportion of GDP.

When we left we were ranked 1st.

PROTECTING THE PROCESS

There are big differences between the approach of Labor and the Coalition on infrastructure.

They go to the heart of the ability of government to be proactive, rather than reactive.

The immediate problem after the election of the Abbott Government was its attack on Infrastructure Australia’s independence.

One of the Government’s first pieces of legislation was the Infrastructure Australia Amendment Bill.

This transformed the Infrastructure Australia advisory council to a board and renamed the Infrastructure Co-ordinator the CEO.

These procedural changes caused me no great concern.

But, I was shocked to see that the Bill also proposed reducing Infrastructure Australia’s independence.

The changes would have allowed the Minister for Infrastructure to issue orders to IA about what it could and could not investigate.

The Minister would have also had the power to prohibit the publication of IA’s research.

I am pleased to report that Labor, with the backing of groups including Infrastructure Partnership Australia, the Business Council of Australia and the Urban Development Institute of Australia, successfully resisted these changes.

Last month the Government agreed to amendments to retain IA’s independence and transparency surrounding its advice.

It also agreed to codify its election promise to subject all infrastructure proposals worth more than $100 million to cost-benefit analysis ticked off by Infrastructure Australia.

The future of infrastructure provision in this country requires the maintenance of the Infrastructure Australia model.

Whereas the Government agreed to the amended Bill on Infrastructure Australia, they have been intransigent on their proposed Asset Recycling Fund.

While at one level, the fund presents as a plausible means to encourage greater infrastructure investment from state governments, I make the point that a true Nation Building government actually invests in infrastructure.

There was not a single extra dollar in this proposed fund, just money recycled from the existing Building Australia Fund and the Education Investment Fund.

Both of these had proper accountability measures and rigour over the purposes to which money was invested.

Last month in the Senate, Labor won support for amendments to the legislation to ensure accountability.

However, Treasurer Joe Hockey rejected the amendments when they came back to the House of Representatives.

He said he would instead create the fund by use of an appropriation bill which could not be amended by the Senate.

Unfortunately for Mr Hockey, Labor obtained advice last week from the Parliamentary Library, backed up by the Clerk of the Senate, to the effect that Mr Hockey’s plan would fail.

It’s one thing to be enthusiastic about building new roads, but there is nothing to be gained by rushing at projects like at a bull at a gate without subjecting proposals to proper checks.

Process matters.

Mr Hockey is trying to avoid scrutiny.

My fear is that Mr Hockey’s reason for creating the asset recycling is his desire to take funds out of the BAF and the EIF and to place it in a new funding pot without proper accountability requirements.

I’m also convinced Infrastructure Australia must work hard to retain its independence.

Recently Infrastructure Australia produced a report arguing that Australian governments were too quick to build roads.

The report said they should think harder about whether they were achieving value for money.

When The Melbourne Age got its hands on a leaked draft of the report, the Acting Infrastructure Co-ordinator released a statement disowning the report.

But the full report is clearly labelled as an Infrastructure Australia document.

The Acting Infrastructure Co-ordinator seemed to be shying away from a debate about the value of investing in roads in contrast to the value in investing in urban rail.

Tony Abbott has placed the construction of new roads at the centre of his infrastructure narrative and ruled out funding for urban rail.

But Infrastructure Australia must not be cowered from engaging in a debate that questions the roads-only approach.

MOVING AHEAD

Creativity in infrastructure policy is becoming more important with each passing year.

Our nation is in a state of demographic transition that is placing real stress on our cities and towns and the roads, railways and other infrastructure that serve them.

One of our big problems at present is the mismatch between the locations of jobs growth and population growth.

Research from the 2013 State of the Cities report highlighted how most major Australian cities were experiencing good growth in employment in knowledge-heavy industries setting up close to central business districts.

But the research also shows that property prices and other factors mean the areas of population growth are on the urban fringes.

So clearly we have a complex problem – one that involves the quality of roads and public transport, housing affordability, urban planning and a range of other policy areas.

We need to take a multi-faceted approach to address such issues, rather than kidding ourselves that the market has all the answers.

The current Government’s answer is solely to build more roads.

But the changes heading our way are too complex to be solved simply by building a new toll road.

If we are really smart, we can implement policy that turns the demographic changes our cities are experiencing into virtues that can be harnessed to drive future economic growth.

Here’s how.

For a start, we need to encourage greater urban density closer to city centres, particularly along existing public transport corridors.

Second, we need to improve public transport, which requires working with state governments.

If we improve the quality of our train, bus and light rail services, then moving closer to the city will become an attractive proposition to current commuters.

Third, we need to think about ways to stimulate jobs growth in the outer suburbs.

Putting all this together, I’m really talking about governments utilising a range of policies responses to deal with society’s infrastructure challenges.

I use the term governments on purpose here.

Central to the future of infrastructure delivery in this country is a realisation that all levels of government need to work together to meet our infrastructure challenges.

And in doing so, they must employ a wide range of policy responses – not all of them involving concrete and steel.

Infrastructure policy needs to be completely integrated with other areas of government policy that bear upon it – like town planning, housing affordability, urban design and reduction of carbon emissions.

Infrastructure must also be smart infrastructure, so we get more value out of assets.

The NBN, for example, has the potential to transform the way our economy functions and reduce pressure on infrastructure by reducing travel demands.

The Abbott Government, like other conservative governments in our nation’s history, can’t seem to get over a silo approach to delivery of infrastructure.

It refuses to invest in urban rail, insisting that this is up to state governments.

That won’t work.

Australia is one of the most urbanised nations in the world.

Any Commonwealth Government which refuses to show policy leadership in urban infrastructure is ignoring the needs of up to 80 per cent of the population.

The urban infrastructure challenge is only one part of the broad infrastructure scene.

But the example I just gave you about the mismatch between where people live and work is a signpost to where infrastructure provision in our nation is headed.

It is moving toward greater integration of different strands of policy that affect demand for infrastructure, as distinct from reactive policies that deliver on infrastructure problems that are already apparent.

SNEAK PEAK

I’ve made clear today that my concern about the future of infrastructure policy is to ensure we retain the accountability processes of the past.

But I’ve been using my time in Opposition to think about new policies and fresh approaches should I be privileged enough to have a second chance to serve as Minister for Infrastructure.

Let me give you sneak peek into my priority areas.

Firstly and unsurprisingly, a returned Labor Government invest in urban rail to ensure that our cities have better public transport.

This will improve amenity and drive productivity gains that will benefit the entire economy.

Since taking office Mr Abbott has scrapped billions of dollars of investment in urban rail projects including the Melbourne Metro and Brisbane’s Cross-River Rail project.

His preference for roads is also causing states to think less about rail.

If the Commonwealth is offering grants for roads but not rail, there’s a direct incentive to take the money for roads.

Premiers with the good sense to want to invest in rail will get no help from Canberra.

Labor believes in investing in roads and rail.

We need an integrated system that serves our community and our economy, not a poll-driven approach that serves the electoral interests of the government of the day.

Once again, an integrated approach requires co-operation between all levels of government.

Secondly, I’m more convinced than ever that the Commonwealth must provide leadership to the other levels of government in urban policy.

Cities are under pressure now but the pressure will increase in coming years due to inter-related technological, demographic and workplace changes.

These changes will affect where people live, where they work, how they get to work and where businesses choose to site their workplaces.

If our cities are to become more productive, more sustainable and more liveable despite these changes, all levels of government need to get involved.

We need to look at planning, housing affordability, population density, utilities, social mobility, public housing, recreation and a range of other issues that bear upon the health of our cities.

We need the full resources of all levels of government and we need commonwealth involvement to drive the policy process and ensure that all parties are running in the same direction.

On the issue of co-ordination, our governments need to involve stakeholders in the process of infrastructure planning to harness all available intellectual capacity.

Regrettably, the Abbott Government sees consultation as talking to big business only.

Big businessmen have useful contributions to make about infrastructure, but in many cases they also have financial stakes in the outcome of deliberations.

Labor also wants input from experts in planning and design, financing and other areas.

We are particularly interested in the views of people who have no financial stake in the outcome of planning decisions.

We will provide opportunities for such input.

Finally, Australian governments need to do more to build communities.

Part of that bears upon the choices we make about infrastructure.

Human beings are naturally interested in the spaces around them and the people around them.

People are born with a desire to be part of something bigger than themselves.

That’s why we barrack for our local sporting teams, attend community events and check up on our elderly neighbours.

Of course, governments are not social convenors.

But when delivering infrastructure we need to think more about the way that our built environment supports communities.

In particular, we need to consider how changes bearing down upon us, including the effects of an ageing population, will affect the way our communities work.

For instance, we have to guard against social isolation of the elderly.

We need to ensure our changing communities have public space and recreational areas; safe and effective links for pedestrians and cyclists and mixed-use precincts that include a range of uses that contribute to the way people experience their lives.

CONCLUSION

Those are a few basic ideas about where I’m headed in a policy sense in addition to retaining proper the processes of accountability and value-for-money that I outlined earlier.

You should expect to hear me talking more about public transport, urban policy and community engagement in coming months.

Above all, expect Labor to frame infrastructure policy that does more than simply respond to the issues of today.

We are activists. Nation builders.

We seek to utilise policy to create a better future.

Expect us to be thinking ahead and building for the future; developing new ways to carefully apply the limited resources of government in ways that leave our children with the future they deserve.

Once again, I want to thank you again for inviting me to speak today.

I’ve enjoyed the opportunity to address you and I wish you well with your conference.

 

 

Contact Anthony

(02) 9564 3588 Electorate Office

Email: A.Albanese.MP@aph.gov.au

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