May 17, 2013

Address to National Urban Policy Conference, Australian Housing and Urban Research Institute

I’ll begin by acknowledging the traditional owners of this country and pay my respect to their elders past and present. The second thing I’ll do is thank my hardworking staff for the very excellent speech that they’ve written for me. You can read it on the website.

I’m going to take the handbrake off and roll us down the hill because it is four months until Australia has a very serious decision to make. We can be polite, we can fiddle around at the outskirts. We can have an academic debate as if this is an intellectual exercise, or we can acknowledge that this election will be about two very different visions for this country.

And one of the key elements of the difference and the choice that is before Australians, and particularly people at a conference such as this who recognise the importance of our cities as the drivers of our national economy, is the different approaches in Canberra to our cities.

Now you can be polite about it, you can discuss it with each other, or you can go out there and discuss it in communities and generate real debate about these issues but I’m here to not be polite. I’m here to say if the academics and the people who understand what the difference is continue to discuss it just with each other, then you will have Scott Morrison’s vision as the vision for this country, not mine. And it’s up to people in this room and right around the country to determine it.

We are the most urbanised country on the planet and yet we have an alternative national government that says that the national government should play no role in our cities. We have, not because I say it but because Tony Abbott says it, an alternative government that says that there is no role for the national government in urban public transport.

We know that that would consign our cities to gridlock. We know that that would cost the national economy $20 billion by 2020. And yet in the commentary I’ve read today about the alternative Prime Minister’s Budget Reply speech last night, I didn’t see any mention of that.

We have embarked on a seriously different way of delivering infrastructure and approaching cities policy since 2007. It’s one which says you get your process and analysis and your structures right, you have evidence based policy, and then you implement it. It’s one that recognises, through the creation of Infrastructure Australia, that you need independent advice to government and it’s advice that should be taken seriously on the basis of cost benefit analysis.

Infrastructure Australia has been doing that work. It’s produced its reports in a transparent way and it’s made recommendations to the government. And you’ve seen it in the Nation Building 2 program, which we launched on Tuesday night. It is the product of two years of hard work, consultation, and policy development, not just by the respective departments and respective ministers. But it also had outside input through the Infrastructure Australia process, whether it be through the council or the Infrastructure Finance Working Group, it came up with very clear recommendations.

And we have implemented that. We’ve implemented it in a way that isn’t political, that doesn’t look at electoral maps, that looks at productivity in the national interest. And that’s why we came up with in consultation with states and territories, a series of proposals. A year ago in the Budget, we outlined what the themes would be in National Building Two. They were moving freight, connecting people, innovation and use of smart infrastructure, safety and improving productivity, sustainability, and liveability of our cities.

We asked state governments to put forward projects. There’s been to and fro through the Infrastructure Australia process and there’s been an outcome which I believe is absolutely outstanding. In the current fiscal circumstances, to come up with a new $24 billion nation building plan was an outstanding result and shows that this government is committed to jobs, growth and future productivity. We’re committed to ensuring that we have a stronger nation.

Roads are important, hence we came up with funding for important road projects, but we have to acknowledge that one loaded passenger train can carry the capacity of a ten lane highway and that unless we address the issue of investment in urban public transport, then we’re not serious.

I’ve had some criticism from the Greens Political Party – unfortunately Scott’s not the spokesperson from the Greens political party, Lee Rhiannon is. So we had criticism from the Greens political party that didn’t acknowledge the fact that this was the largest single ever investment by any government on any budget night since Federation in urban public transport.

We provided NSW with funding and they refused to spend it on the Parramatta to Epping Rail Line. Refused to spend it.

We can’t intervene to make states do the right thing by the constituencies that elect them, but we can work with states on good outcomes and the fact that we worked with Queensland and Victoria over a two year period to progress what they both said were their number one priorities – Cross-River rail in Brisbane, which will deliver capacity of 17,000 additional passengers during those peak times, and the Melbourne Metro Project, both of which are essential to avoid gridlock.

If you do not do both of those projects, Brisbane will grind to a halt in four or five years and Melbourne is almost there right now. And you can’t do any of the other projects. You can’t do the Melbourne airport link, you can’t extend the line to Doncaster, you can’t do anything unless you build the Melbourne Metro Project. That’s why it’s essential. And we can, through innovative ways, including mobilising private capital. Something the business community has been calling for.

You know you hear them out there. You know who they are. People who for years have been saying that we need some private capital mobilised into these big kinds of projects. Well, they’ve been pretty damn quiet in the last three days when the state governments have walked away from commitments that they gave.

I’ve come from a press conference in Brisbane about the Cross-River rail line. I don’t normally release correspondence between ministers.

We have been working with the state government to deal with this project, you have an exchange of letters. That’s how you come to agreements. We had an agreement about the funding, $715 million from each level of government; about the timelines of when that funding would be allocated; about the availability payment model going forward; about the structure of the company; about who would pay for the project going forward. Complete agreement. Indeed, on 30 April I was written to asking could we get the concessional treatment that applies to GST – the way that it works in terms of the Commonwealth Grants Commission allocation on that project. What occurred was that we did agree, and grant the same concessional treatment as occurs for funding on the Bruce Highway or other parts of the National Road Network.

So they got the best deal, they got everything that they asked for, and as late as the weekend we were planning a joint press conference today to launch that project between the Commonwealth Government and the state government but, come Budget night, they walked away from it. Just like Terry Mulder in Victoria, on the record saying that the Melbourne Metro project was the Number One transport priority for Victoria. Last Friday he agreed, in terms of the funding proposals that had been put forward and worked out, and yet they walked away from those proposals.

If we are going to get serious about delivering infrastructure, it cannot be dependent upon the electoral cycle. Governments must honour processes, that are worked through to ensure that funding occurs into the future. And this occurs under circumstances in which the Coalition has made it very clear that it will refuse to put funding into any urban public transport projects. In Perth, we’ve put $500 million on the table subject to a business plan by the Barnett Government for either rail or light rail. Already, we’ve funded some light rail planning work in Perth.

If you look at, and I note Alannah MacTiernan is here – if you want to look at the way that rail can transform a community, have a look at what happened under her leadership in Western Australia. Well, we’ve gone out of our way to ensure that that funding is available, but we do want to see, of course, business plans before we simply commit funding to projects on the basis of things worked out between a couple of Tories on the back of an envelope.

I mean, the East West project in Melbourne may well have merit. I don’t know, because a business case has not been submitted to the Federal Government. We haven’t said no to funding. We’ve said show us the business plan. We have a rigorous process established that we are not going to walk away from. Absolutely critical. And it is a process for projects that are already underway – the Moreton Bay Rail Link and the Regional Rail Link in Victoria.

I find it astonishing that the alternative Prime Minister of this country could give an interview in Melbourne and say he wasn’t aware of any Commonwealth funding for any public transport project in Victoria, when down the road from the studio he was in at Southern Cross Station is where the Regional Rail Link begins, that’s currently employing 2500 Australians building a rail line that will benefit not just Melbourne but Geelong, Ballarat and Bendigo, and transform the links along that way.

So I think that is absolutely critical. On roads, we’ve done that as well. Let’s look at the F3 to M2 agreement. I’d contrast the action of some of my other ministerial colleagues, with the actions of Duncan Gay in New South Wales, who actually sat down and worked through the F3 to M2. We have an agreement – $400 million each, to make sure that the missing link gets built. Absolutely vital infrastructure – you will be familiar with it. You get off the F3 now and you just end up on Pennant Hills Road. It’s absolutely vital for freight, vital for passengers, vital for people on the Central Coast to Newcastle, and a central link that’s needed to be done.

We’ve come up with a way to do it – three innovative private financing models, together with the Commonwealth commitment, transforming Sydney, Melbourne and Brisbane. The Sydney Motorways project, we’ve said we have money on the table and in the Budget for it, but we want it to achieve its outcomes, not just transfer where the gridlock occurs from Strathfield to Taverners Hill. We want to make sure that it actually achieves those outcomes. And if you’re going to move freight to Port Botany, funnily enough, you’ve probably got to go somewhere near Port Botany, not the other side of the airport, which is where it was envisaged when it was released.

So we’ve put money in to get the planning right. We’ve put other significant funding into the M80 in Melbourne, the South Road project in Adelaide, Tonkin Highway in Perth where, of course, the Gateway project is underway at the moment, the largest ever Commonwealth investment in a project in Western Australia. Darra to Rocklea, the next section of the Ipswich Motorway in Brisbane, Gateway North in Brisbane, the Midland Highway in Tasmania, the Brooker Highway in Tasmania.

All of these are absolutely essential, and where have these ideas come from? They’ve come from getting the process right. The establishment of Infrastructure Australia and the recent work we did through the leadership of Brian Howe. He came in to assist us in the process of ensuring that capital cities had plans in place so we didn’t just continue to see capital city planning where you build houses somewhere, then you think about where the jobs and transport links are. We’ve done that through establishing the Major Cities Unit, through the National Urban Policy Forum, which had regular oversight of the processes across government to make sure that we can deliver on those issues. My reappointment as Regional Development Minister is about recognising that it’s not cities versus regions, as the Nats say.

What has happened in Queensland, essentially, is that the Deputy Premier doesn’t want to spend any money in Brisbane or in South East Queensland, because that’s seen to be taking money from the regions. He doesn’t understand that you’ve got to actually do both. Got to look after our cities – one way to look after our cities is indeed to have proper regional development, to make sure that we don’t continue to have growth in our cities at the expense of our regions. That’s what the National Broadband Network is about. That’s why it is so important in overcoming the tyranny of distance. So we’ve done all of those policy things right. I think we’ve got the framework right and it hasn’t happened by accident.

I see some commentary over the last couple of days talking about how we decided our funding based upon the seats. I mean this is the thing that, frankly, makes you somewhat frustrated about being involved in politics. I mean if people say that the Melbourne Metro Line is about the Electorate of Melbourne because I guess, it’s in the title, as opposed to freeing up the entire Melbourne city system. The Cross River Rail Line is about not just about Brisbane, but frees up the trains from Sunshine Coast and Gold Coast as well.

We’re funding projects as well in regional Australia like the Warrego Highway, I mean, you know, we could actually give you the names of the people along the entire length of the Warrego Highway that vote Labor.

But we’ve put more money in Tuesday’s Budget into the Warrego Highway than the Tories ever did. We’ve done it because it’s the right thing to do. It’s the right thing to do in terms of productivity.

I’ll conclude with one more issue, which is the Local Government referendum coming up on 14 September as well. I think it is very important in terms of the agenda of the people in this room. I know a couple of State Governments have had a sort of knee-jerk reaction. These are the same State Governments that ask for projects, ask for funding profiles, negotiate them all out and then say, you know, where did that come from? They’re now walking away from these issues.

If the Federal Government can’t continue to fund projects like Roads to Recovery, community infrastructure in our cities and in our regions (we fund, through Local Government now, service delivery such as child care, a whole range of services) then there will be a major issue. It is unfinished business. We have a Constitution that sets out the way that we are governed but it ignores the government that is closest to the people, Local Government.

You’ll see the sort of lunatics from the IPA raising people, you know, who have done something wrong in council or something. This doesn’t change the right of states to sack councils, to change boundaries, to do any of that. It makes it clear that Local Government are created by the states. Barnaby Joyce supports it because I think he recognises that it’s particularly important for regional Local Government communities.

It’s been put twice to the Australian people. If it’s put a third time and loses, and there follows a political challenge to the right of the Commonwealth to provide funding to Local Government, then I’m not sure what those State Governments are going to do. You can imagine them sitting round going, that probably wasn’t a great idea to say no because that’s just what we do. It will be a real problem. So I think it is a part of a positive agenda saying yes on 14 September.

So I conclude by saying this: when it comes to all of the debates, and I as Leader of the House – fairly difficult job in this Parliament, to start at 70 and have to get to 75 on every single bit of legislation. When I think of the full spectrum of issues, there are a range of issues in which there are just really stark differences, really stark differences. But there is no starker difference than between the two approaches – Warren Truss my shadow minister, is on the record about all of these issues – and the approach of the current government which operates in a tradition of Brian Howe and acknowledges the important role the cities play and the important role that urban development plays in the country.

But people do have a choice, people can read the polls, people know what the political context is of that choice. So they’ve got to engage in it, and they’ve got to, I think – I think there is an opportunity as people actually focus on not whether they like Julia Gillard, or Tony Abbott or Anthony Albanese for that matter or whoever – who cares?

What is important is what governments will do for the nation. And at a national urban policy conference – Economic Productivity and the City, we have an agenda. This Federal Government has had an agenda not just that we’ve talked about but it’s an agenda that we’ve put into action. And I think it would be a tragedy if that agenda was stopped in its tracks. And if in the first two weeks of an alternative government the National Urban Policy Forum was abolished and funding for urban rail projects was withdrawn for any contracts that haven’t already been drawn up. I’ve said that very clearly it would be a tragedy if the regional rorts program was brought back instead of having proper funding of community infrastructure.

They’re the choices before you. Not just as voters, but as people who care about these issues and care about the community. You might think I’m wrong. That’s fine too, get out there and engage. But at the moment we have such a superficial debate about the future of this nation. And, you know, it’s not up to just politicians to change it. Unless the community engages in that debate in the next four months, then you might all have a superficial outcome, that people wonder, what happened? What happened?

Well, the choice is clear. Our position is stronger, smarter, fairer.  It is a position we have put in place not just in this Budget, but since 2007. I thank you for your listening.

[Applause]

COMPERE:  Thank you very much Minister. The Minister’s agreed to take some questions from the floor. I’m sure people are keen to take that opportunity, although you may have intimidated some of them. No you haven’t, all of them. That’s three, thank you very much.

QUESTION: Thank you, Sue Holliday. You know people tend to think infrastructure equals roads, I’m saying the general mass out there. What are the chances of you putting a word for cities into your title?

ANTHONY ALBANESE: If you want a superficial debate, that’s one. I know that some people in the community want it, but the truth is I’m the Cities Minister as well as the Regional Development Minister. It’s not like we haven’t engaged. We could come up with a new, sort of title and stuff. We had that opportunity and thought about it.

What is more important I think is what we’re doing. And I think one of the things that I am not, I am not anti-roads. I’m pro-infrastructure. And I’m pro infrastructure regardless of modes. I don’t have an ideological blinker on it.

The Leader of the Opposition made such a clear and unequivocal comment about not funding public transport and I thought, what is this? There was a very prominent conservative leader in Britain, who Tony Abbott looks up to, who made quote along these lines at one stage: if you’re still travelling on public transport when you’re 26 your life is a failure. And I think there is some sort of ideological mind-set that the car reflects the status of the individual driving it. And public transport is somehow, you know, less. Less. I can’t explain it any other way.

How could you say you’re going to take Infrastructure Australia seriously which certainly isn’t anti-road, and say you’re going to have a process. Across the spectrum the people engaged in the sector of infrastructure certainly aren’t anti-road. They don’t have this view. Nick Greiner, I read, spoke at this conference I think yesterday. You know, he doesn’t have that view. You do it based upon what’s best in terms of modes.

But you know, I say, I say, I shouldn’t undermine my position here, but I will. Why not? I say one of the things I’m most proud of is that we’ve invested more in urban public transport since 2007 than any other Government since Federation. I’ll give you the tip: it wasn’t that hard.

QUESTION: Anyone else want to join in the conversation?

[Indistinct]

QUESTION: Hi Anthony, great presentation. Good to see you’ve got a policy.

ANTHONY ALBANESE:  I didn’t just make it up today.

QUESTION: No I know.

QUESTION:  But Anthony in this conference, there’s been a number of different models that have been proposed as to the way that infrastructure could be, could be funded. All of which would involve engagement with the Federal Government, whether it’s the city deal model from Manchester, or an urban fund, an urban infrastructure fund proposed by the Property Council, and a range of others. Is there any thought of new models that we may be able to use to get the infrastructure spend up, notwithstanding your great contribution?

ANTHONY ALBANESE: Well there is, and some of them have been implemented. To be clear about Cross River Rail, for example, $715 million from both levels of government, and then the availability payment over decade, which go through the creation of a corporation. Similar sort of model with Melbourne Metro which was $1 billion from each level of government in NB2, Nation Building 2 – the program begins in the next financial year 14/15 – and $2 billion from each level of government in Nation Building 3.

The creation of the vehicle that would, with $3 billion from each level of government over that period, ensure the rest of the funding would come from the availability payment model. So that’s a model that essentially reconciles the fact that the capital cost might be over ten years, but the value of the asset is realised over 30 years or more. We will extend the time in which you pay off the asset.

And obviously the prime movers for that would be superannuation funds and we’ve been in discussion with them. In particular they would be attracted towards that model, because they get a certain rate of return. There is a possibility that they can borrow at pretty low interest rates at the moment, due to what’s happening in the capital markets. And what you could do, very much, is to use that sort of model to create a financing vehicle, pool the funds that could be used for urban infrastructure – or regional infrastructure for that matter. It would produce a return.

So the Infrastructure Finance Working Group did a lot of work on that. Quite frankly, given that we decided not try to be too bold, given some of the difficult circumstances we have with conservative governments in the eastern states and in the west in terms of potentially playing politics, crude as that. We try and just state specifics under those circumstances and use that as a model to show what you could do in terms of attracting private capital.

There are other models as well. The F3 to M2 missing link is a different one. It’s essentially a model that uses the fact that there is a company, I can’t go in all of the details but it’s all been worked out, that one’s commercial in confidence. But you know, it’s an agreement between the national Government, New South Wales Government and Transurban to get a road that wouldn’t be built otherwise because of the limited fiscal position that the Federal and State Governments are in.

I mean the whole debt debate, of course, in this country is absurd. When our net debt’s around 11 or 12 per cent of GDP it is the envy of the world. Yet you heard it last night in the Budget Reply speech that it is an emergency financial position. I mean for goodness sake. The level of debate is pretty immature in this country. So, discussion about these models needs a greater maturity of debate. And it’s not just on the right, you know, it could be on the left as well. When I came out and said I supported this sort of thing, again not Scott [Ludlum], but someone else in his party said I was privatising public transport. I mean, it is just silly stuff. We need to, have a mature debate about those issues. I’m not sure that’s capable in the next four months, frankly.

The work that IA have done is enormous. The Cross River Rail submission to IA is 2000 pages, and then there’s the attachments Steven [Alchin] has reminded me. It is an extraordinarily sophisticated way of recognising that, ok, this is a great project, everyone knows it, but how do we get money for it? And I think we’ve come up with a way that’ll do that.

COMPERE:  Thank you very much, we do need to draw things to a close, the rent on this place – particularly after 2:30 – is enormous, so please join me in thanking the minister.