Dec 10, 2013

Infrastructure Australia Amendment Bill 2013 – Second Reading

Mr ALBANESE (Grayndler) (17:19): Building the right infrastructure in the right location at the right time is critical to national economic development and productivity. To secure the productivity gains that drive jobs growth you have to invest in roads, ports, railway lines and airports. Most importantly, you need to ignore the electoral map. If you make the right strategic investments the resulting productivity gains benefit every Australian—not just the communities in which you have delivered the infrastructure. It is my experience that many elected representatives dealing with infrastructure struggle with the need to take a long-term, non-partisan view. Some representatives make decisions that are based on their political interests rather than the national interest. Others, like former Prime Minister John Howard, simply ignore infrastructure spending and blame the states when anyone complains about infrastructure bottlenecks. That approach, of course, helps no-one.

Labor took a very different approach when we were elected in 2007. In line with our proud heritage we focused on nation-building. I argued in the lead-up to that election that the challenge for infrastructure was to delink the infrastructure investments cycle—which was, by definition, long-term—from the electoral cycle, which is much more short term. Infrastructure Australia was specifically designed as a vehicle to do just that.

I am here today to oppose the Infrastructure Australia Amendment Bill because it is a blatant coalition attempt to re-establish the old link between the political process and the delivery of infrastructure. This bill gives the Minister for Infrastructure the right to interfere with Infrastructure Australia’s considerations by nominating pet projects for assessment. It would also allow the minister to ignore entire classes of infrastructure investment, such as public transport.

I note that Minister Truss, in his contribution to this debate, claimed that the legislation was designed to increase Infrastructure Australia’s independence. Having opposed the very creation of Infrastructure Australia, in recent times the coalition have argued that they would increase its independence and strengthen it. The fact is that this legislation does exactly the opposite. It reopens the door to pork-barrelling and the short-sighted approach of the past. It can only have two outcomes: lowering growth of economic productivity and, as a consequence, reducing growth in employment.

I, of course, have seen this approach before. Minister Truss hails from the National Party—the party of the pork-barrel; the party that has always been preoccupied with supporting funding for its own electorates rather than having a broader view of the national interest. When the coalition were last in government, they had no infrastructure policy. I was the first ever infrastructure minister to represent this nation. They simply refused to invest in anything other than regional roads—except for pet projects such as regional road programs that funded Campbell Parade at Bondi Beach in the member for Wentworth’s electorate. There was no coordination of infrastructure provision. They made it up as they went along.

In fact, the Howard government’s idea of regional infrastructure provision was the Regional Partnerships scheme, found by auditors to have been rorted by the government. Who could forget the $600,000 grant to keep struggling Queensland company Beaudesert Rail afloat, against the advice of corporate administrators. There was the $426,962 given under the dairy assistance program to the Indigo Cheese factory in the electorate of Indi, which, of course, did not produce any output. Indeed, the company shut down in March 2007. Three months later, the government paid the company a further $22,135 instalment on its grant because its standards of oversight were so poor that grant recipients did not have to produce anything to continue to qualify for money. No wonder the Australian National Audit Office investigation into Regional Partnerships found that it had fallen short of an acceptable standard of public administration. That is why I was very cynical about the coalition’s rhetoric, and, unfortunately, that cynicism has come to fruition in the form of this bill.

Labor came to office determined to create a system whereby infrastructure needs would be independently assessed and where elected representatives could make decisions based on evidence about a project’s potential to lift productivity, not on the basis of their electoral strategy. When we created Infrastructure Australia in 2008, we asked it to conduct the first ever national audit of infrastructure needs in Australia’s history. We also asked it to advise on approaches to infrastructure policy. It did that at arm’s length from government and that national audit provided the basis for funding.

One of its key early findings was the development of a formula for an integrated policy approach to provision of infrastructure. It identified seven priority themes which it recommended needed to be addressed as a whole, in preference to the piecemeal approach of the past. These principles were prioritised. The first of the principles was, indeed, the development of a more extensive, accessible and globally competitive National Broadband Network. Infrastructure Australia described the importance of better broadband as ‘almost impossible to overstate’. The second principle was the consolidation of a national energy market. The third was competitive international gateways like ports and airports, including the creation of a national ports’ strategy. The fourth was the development of a national freight network. The fifth was transforming cities with effective roads and public transport. The sixth was the provision of essential infrastructure for Indigenous communities. And the seventh was adaptable and secure water supplies.

Members opposite should take note of this list. It reminds us that infrastructure comes in many forms, many of which are interdependent. That is why you need to have an integrated approach without Infrastructure Australia being directed to look just at a specific project or to not look at other projects. Take the National Broadband Network. It is not just a communications infrastructure vehicle; it also has an impact on the way that cities function. It has an impact on transport. If people can telework from home, it reduces urban congestion. That is why you need to have this integrated plan, not the cherry-picking approach that would result if this legislation is carried.

Infrastructure Australia argued that, if you wanted to improve the functioning of our nation, you needed to cover every angle, not just building roads or clearing port bottlenecks. To get maximum productivity growth, you need to adopt a holistic approach, including the functioning of our cities and regional communities, and you need to address every element critical to the infrastructure equation. Let me quote from Infrastructure Australia’s December 2008 report to the Council of Australian Governments:

In delivering this new national approach, Infrastructure Australia has not sought to predetermine any particular infrastructure outcome or solution. Rather, it has created a broad framework that was used for assessing any investment or actions.

This advice sums up the point that I am making—that adequate infrastructure provision requires a flexible approach that does not pick favourite modes of infrastructure but simply uses objective evidence to choose the best outcomes.

Labor did not give itself the ability to interfere in Infrastructure Australia. It also did not give itself the power to even direct Infrastructure Australia about what projects it could or could not consider. We asked only for evidence so that we could make evidence based decisions. As at the 2013 election, the former Labor government had allocated funding for all of the 15 Infrastructure Australia priority projects—every single one. In the same Infrastructure Australia report to COAG that I mentioned a moment ago, its chairman, Sir Rod Eddington, wrote that his organisation’s formation represented a new level of leadership on infrastructure:

It introduces a bold new approach to identifying, planning, funding and implementing infrastructure of national significance across Australia. It also introduces rigorous and robust economic analysis of infrastructure investments prior to government decision-making.

And yet Sir Rod Eddington was not even consulted about this legislation before it was introduced into the parliament. That is a fact.

This brings me to the proposed changes in the bill. Under the bill before us, Minister Truss wants to give himself very specific powers: to set time frames and the scope of audits and evaluations; to direct which matters can and cannot be considered; to order Infrastructure Australia to evaluate particular projects nominated by him; to confer tax loss concessions upon projects without reference to Infrastructure Australia; to sack members of the council of Infrastructure Australia for the ill-defined crime of misbehaviour; and to rethink the representation of state and territory governments that are currently represented on the Infrastructure Australia Council.

All of these changes are retrograde steps. Governments which give themselves poorly defined rights to sack people are in fact giving themselves the power to dispose of advisers whose advice does not suit their political line. I am deeply concerned about the bill’s provision allowing the Minister for Infrastructure and Regional Development to order Infrastructure Australia not to consider classes of infrastructure when it assesses the relative merits of infrastructure projects.

This provision goes to the very heart of the design of Infrastructure Australia. It will dismantle IA’s ability to give governments advice on the full range of infrastructure investment which is required to drive productivity gains and create jobs for future generations. I fear the motivation for this move is rooted in the coalition’s inexplicable and, frankly, irresponsible refusal to invest any Commonwealth funds in urban passenger rail. Our cities are congested. The Australasian Railway Association estimates that traffic congestion is costing our nation $15 billion a year and says the costs will increase unless governments take real action now to unclog our cities. An essential element of the solution to congestion is greater use of public transport. That is why in government Labor allocated money for a range of projects recommended by Infrastructure Australia, including Brisbane’s Cross River Rail project and the Melbourne Metro. In this year’s budget, $715 million was allocated for the Cross River Rail project and $3 billion for the Melbourne Metro.

Our view is that the Commonwealth needs to help states invest in urban public transport and that this investment will ease congestion and lift urban productivity. We consulted with both the Queensland and the Victorian governments on those assessments. They were found by Infrastructure Australia to be nationally significant projects. Indeed, funding for planning money for both of those projects was previously allocated, the planning was done, the projects stacked up, and yet the coalition have a view that the Commonwealth should just fund urban and regional roads and that there should be no funding for urban public transport.

The problem there is the definition of ‘nationally significant’ projects, which is why the assistant minister could not answer the question that he was asked today in parliament. The fact is that, during the term of the former Howard government, as he would be aware, the coalition government shied away from funding urban roads as well as urban rail. The Howard government funded a total of $300 million in Sydney infrastructure over 12 years. It completely vacated the field. The problem with the approach of the Prime Minister, who says, ‘The Commonwealth should stick to its knitting and invest in roads,’ is that it ignores the fact that, historically, the National Party, while they have held the transport portfolios, have also not invested in urban roads, either. They have not invested in our cities. And, as the most urbanised country on the planet, the fact is that there is a direct link between investing in our cities and growth in our regions. We need to do both and we need to have a national approach to it—something that those opposite do not seem to understand. Labor in fact doubled the roads budget, compared with the Howard government’s record.

The current government’s roads-only policy is an affront to everything we know about effective provision of infrastructure. As I mentioned earlier, when outlining Infrastructure Australia’s seven themes, you cannot drive productivity without taking an integrated approach and you cannot take an integrated approach unless you have Commonwealth leadership. A piecemeal approach, with projects as determined by the minister, without looking at alternative options, which this bill will allow, will reintroduce the very problem that Infrastructure Australia was created to overcome. This bill is proof that the coalition simply does not understand nation building.

It will take us back to the bad old days when infrastructure provision was not an integrated process but a recipe for pork-barrelling. When it comes to policy, the proof of the pudding is in the eating. If you are already making a good pudding it makes no sense to change the ingredients.

Thanks to the recommendations of Infrastructure Australia, here are some of the projects that the previous Labor government delivered: the Hunter Expressway, which will be opened in coming months; major upgrading of the Pacific Highway, worth $7.9 billion, through works including the Bulahdelah Bypass, the Kempsey Bypass and the Ballina Bypass, all opened by Labor; and the Bruce Highway, with funding of $5.7 billion, including work on what the now transport minister describes as the worst road in Australia, the Cooroy to Curra section of the Bruce Highway. Minister Truss would know that because it is in his electorate. He just did not fix it during the 12 years in which he was part of the government. It took a Labor government to deliver this project. We delivered Victoria’s Regional Rail Link, again, something that the now Prime Minister seemed to be totally ignorant of, when he said in his interview where he declared that no funding for public transport would be forthcoming from a government he led: ‘We don’t do public transport projects; we don’t do them.’ There he was sitting in a studio in Melbourne, the site of the largest ever Commonwealth investment in an urban public transport project, the Regional Rail Link, a project in which today there are 3½ thousand Victorians in work, and which will benefit Melbourne, Geelong, Bendigo, Ballarat but, most importantly, the national economy by improving productivity.

South Australia’s Noarlunga to Seaford Rail Extension project has been opened. The Gold Coast Rapid Transit project is significantly increasing the productivity of the Gold Coast. Infrastructure Australia operated in conjunction with the Major Cities Unit, and that has already been abolished by the new government as one of their first acts coming in—’No, we don’t want to be involved in cities.’ It recommended projects like the Perth Citylink project. The new member for Perth, the former member for Perth and I went to the opening just prior to the election. It is an exciting project that has transformed Perth as a major international city by uniting the city’s CBD with the Northbridge precinct. It is an exciting project boosting productivity, boosting sustainability and boosting livability in Perth. Brisbane’s Moreton Bay rail line was first promised in the Queensland parliament in 1895; delivered, though, by the former Labor government and set to be opened next year. Both projects are exciting projects and important projects.

In line with the principles for effective delivery of infrastructure, IA also produced major reports for COAG which led to important microeconomic reform, a national port strategy adopted for the first time, a national land freight strategy and a strategy to improve delivery of infrastructure to Indigenous communities. An integrated approach to infrastructure delivery also requires consultation with industry—a hallmark of Infrastructure Australia’s approach and something that industry welcomed. This was acknowledged by Ports Australia chief, David Anderson, in 2011 when he said the government was to be complimented for making a serious endeavour to develop a nationally based approach to port planning and regulation. Mr Anderson said:

The National Ports Strategy is based on the simple but effective premise that our ports will develop long term plans that will be out there for all stakeholders to view and own and that this approach will drive processes to ensure that port land and its associated freight precincts and road and rail corridors are appropriately developed and protected.

Governments that close their ears to impartial expert advice are letting down the nation. Infrastructure Australia also played a role in advising about the national transport regulators. That microeconomic reform will benefit the national economy by $30 billion over 20 years, and yet, under the approach envisaged in this legislation before the House, that will end.

Let me come to transparency. I note that the minister has said that this bill is about greater transparency, but it makes the minister the gatekeeper for publication of information via his powers to direct IA’s activities. Under existing arrangements, IA routinely published the outcomes of its considerations, providing important information to inform the public debate and sending clear signals to the investment community. If the coalition had paid any attention at all they would know that rhetoric such as ‘We’ll produce an annual report to the parliament’ already happens. There is already an annual report to the parliament and to the Council of Australian Governments. It is published on its website. Because we do not direct Infrastructure Australia on what they can look at, there are recommendations that, frankly, I do not support as the former minister. There is a recommendation, for example, about putting a toll on the Pacific Highway. I do not support that. I do not think that is viable. But it is appropriate that where you have an independent, at arm’s-length body making recommendations, from time to time there will be disagreements and governments will take different positions. That is what the Infrastructure Australia process is all about: challenging governments at the national level and at the state level to lift their game and to do better when it comes to infrastructure provision and delivery.

The changes proposed in this bill, giving the minister the ability to block the publication of project evaluations, make a mockery of transparency. On what possible basis is that acceptable from those who, in opposition, spoke about transparency? There is a provision in this legislation to block the publication of project evaluations. That is something that simply does not exist at the moment.

The minister made clear in his contribution to this debate that he wants IA to conduct more of its own research on the economic benefit of infrastructure proposals rather than rely upon work originating from state governments. Infrastructure Australia now makes assessments of the work that state governments have done. Those opposite were talking earlier in their rhetoric across the chamber about the East-West Link in Victoria, for example. The only published BCR on the East-West Link found a benefit-cost ratio of 0.5.

Mr Briggs: So you’re against it.

Mr ALBANESE: That is what the Eddington study found—0.5—and yet they will not publish any of it. You get the childish statement across the chamber from the assistant minister, saying, ‘So you’re against it.’ That is not what I said. What I said very clearly was: publish the economics of this project; let it be seen transparently—

Mr Briggs: In the middle of a tender process.

Mr ALBANESE: Those opposite say, ‘In the middle of the tender process.’ That is the whole point. You find out if it is viable before you go to tender and before you provide funding for it. The assistant minister across the chamber has a lot to learn.

I note the minister does not propose, however, to lift Infrastructure Australia’s funding at all—there is no suggestion of that—and yet they are going to replace the existing IA council with an IA board and bring it under the auspices of the Commonwealth Authorities and Companies Act 1997. Bodies that exist under this act cost more to run. It places obligations on reporting and compliance that are currently done by the department. He does not actually understand that is the process. IA in terms of its financial operations operates with the department for reporting and compliance requirements. That reduces the cost. Yet Infrastructure Australia will be asked to do more with fewer resources.

On top of this, the minister in this legislation proposes sacking the entire Infrastructure Australia council and creating a new board structure to which new people will be appointed, one would assume political appointees. One would assume that that is why that is occurring. It is just like the creation of the new CEO position as opposed to the Infrastructure Australia Coordinator. One assumes it is an attempt to create a system whereby the minister will be able, in the time-honoured fashion of the coalition, to appoint political cronies.

Mr Briggs: It is appointed by the board.

Mr ALBANESE: Yes, but you appoint the board. The fact is that the only person with any political background on the Infrastructure Australia council is Mark Birrell, a former minister in the Kennett government who was appointed by the former Labor government cabinet on merit. That is why we did not have a situation whereby we engaged in the sort of interference that will occur under this system. We have seen these motives before.

As I explained earlier, the Prime Minister refuses to invest in urban passenger rail, preferring to invest exclusively in roads. But even his proposed investment in roads ignores the Infrastructure Australia process. He said that the East-West project had been through a recommendation by Infrastructure Australia. That is not the case. He said it repeatedly and it is simply not true that it was recommended and on the Infrastructure Australia priority list. The WestConnex project in Sydney also has potential but it is yet to have finalisation of its route and finalisation of any costings being done. That needs to be done before federal government money is confirmed. You need to have those processes. With regard to Adelaide’s Darlington Interchange project, which was raised today, the coalition say they have got $500 million for that project. Well, where is the other $800-900 million that the project will cost coming from? With regard to the South Road upgrade, the Torrens to Torrens section has been recommended by Infrastructure Australia as the priority, an area in which preconstruction work has already commenced but will not be able to continue without federal government funding if it is withdrawn.

The fact is that this legislation is contemptuous of the evidence based approach of Infrastructure Australia. It is far more attuned to the electoral map than the national interest. If you are a nation builder, the only map you look at when thinking about infrastructure is the national map. The member for Gippsland would know full well that I as a minister dealt well with him. He was a good representative of his local community, and his claims were dealt with on their merits. If you have a look at where our road funding went, at the end of our government something like three-quarters of the funding that had been allocated had actually gone to coalition seats; three dollars in every four as the most conservative assessment that you could make. We made assessments based on the national interest. That has always been Labor’s way, with the transnational railway, the Snowy Mountains Scheme, the NBN and national strategies for ports, shipping and aviation. You need to have an integrated approach, one that is blind to modes of infrastructure, one that puts efficiency first, one whose aim is productivity and jobs. The coalition has never understood this concept in the past, and this bill shows that nothing has changed. This bill is short-sighted and it will take this nation backwards. It would be more honest if they just abolished Infrastructure Australia and the whole process.