Mar 12, 2008

Infrastructure Australia Bill 2008 – 2nd Reading

INFRASTRUCTURE AUSTRALIA BILL 2008

Second Reading

Mr HAWKE (Mitchell) (12.46 p.m.)—Coming from an electorate which represents one of the fastest growing areas of Sydney, I know that infrastructure is of great concern to many people. Infrastructure Australia is a proposed statutory authority that will be established to advise all levels of government on matters relating to the provision of infrastructure. Infrastructure is important to many people. It is something that governments do need to act on, particularly for people in Western Sydney and in my electorate. I, like many others, will be supporting the Infrastructure Australia Bill 2008 today in the hope that we can get rid of some of the obstacles to getting good infrastructure that exist at the state level and the local level.

I would like to start, however, by making some general points about this bill. There are some concerns about this new statutory body. Firstly, I think it is very important that this body created by government not become an extra hurdle or burden that vital infrastructure projects have to get over. It must not add any delays or burdens to processes that, because of our federal system, can already be complex and unwieldy. I note in particular that there will be a 12-month review period, and I hope that this period does not become an excuse or justification for inaction on vital infrastructure by a new government.

Secondly, I would like to say that Infrastructure Australia does need to be nonpartisan in its approach. All of its appointments are made by the Minister for Infrastructure, Transport, Regional Development and Local Government and, in view of the gross politicisation of sectors of our Public Service at a state level, our community will be watching the operation of this new government bureaucracy carefully in the hope that it will be genuinely independent and able to add some value, not burden, to infrastructure planning in Australia. There are going to be 12 appointees, some made in agreement with the states, and I would also add a concern that there has been a lot of failed thinking in relation to the provision of infrastructure at a state level. I think it is quite necessary that we do not allow that same sort of thinking to dominate outcomes in relation to infrastructure from a national perspective.

I am going to spend some time today talking about some of the significant failures at the state level because I think Infrastructure Australia will achieve nothing if it is just the same faces and the same thinking. For example, if you look at New South Wales and examine the state public private partnership deals that have been allowed to exist under the current Labor state government, you see state government departments such as the Roads and Traffic Authority allowed to engage in contracts with various companies, essentially to receive a payment direct to their department to close a legion of public roads, forcing people to use the privately funded infrastructure—the infamous Cross City Tunnel. That Cross City Tunnel deal, when it became public, became a scandal that the people of Sydney rejected. The government was forced to break its contract and, of course, the Cross City Tunnel consortium is now bankrupt. These kinds of episodes and experiences give a very bad name to public-private partnerships and this is, we know from experience, a further disincentive for private capital to get involved in public-private partnerships and also another burden. So it will be a good thing if Infrastructure Australia can examine some of the contractual arrangements at state level in particular and determine why there have been such failures.

The north-west of Sydney, my electorate, is one of the fastest-growing areas of Sydney. It is on the urban fringes of Sydney, one of our biggest cities. Infrastructure is desperately needed in Mitchell to meet the massive demands of growth. The north-west of Sydney is earmarked as one of the biggest growth corridors in our country. I guess one of the first performance measures that infrastructure will face is that if infrastructure continues to not be provided in urban fringe areas in the major growth corridors of our cities, then it will not have achieved anything except to add an extra layer of bureaucracy. For example, in the north-west of Sydney you have one of the biggest business parks, with the major national headquarters of 500 companies. There are 20,000 employees there. That will grow to 40,000 in about 10 years. There is no rail line. There is no mass transit system in this sector of Sydney and it is essential that we get one in the near future.

There has been some suggestion that the previous federal government failed somehow in relation to infrastructure, but the only working, functional piece of major infrastructure that has gone into Western Sydney in many decades was the M7. I am going to speak some more about that later. The M7, the orbital motorway that surrounds Sydney, has been a major success. In fact, when you look at some of the other state funded infrastructure and managed projects you get a lot of complaints about tolling and other matters, but I receive no complaints about the M7. It is a working and vital piece of infrastructure that was fully funded by the Howard government.

When you look at the provisions of this bill, there is scope for some positive developments. We do need to consider how best to remove regulatory barriers to getting good infrastructure at different levels, and hopefully this can be achieved. Looking at state and local governments, you can see some systems, levies and charges that really prevent good infrastructure from getting built. For example, infrastructure levies at the state level need to be looked at as well as the rates of infrastructure levies and the rate of return that people get for the amount of money that they are forced to pay in levies, taxes and charges.

In the 2006 National Housing Infrastructure Costs Study that was commissioned by the Residential Development Council it was found that indirect infrastructure charges for housing and home units have increased significantly in Sydney, far outstripping the growth in construction costs. Significantly, it has been the increase in indirect infrastructure charges covering roads and public transport which has been the most dramatic. As a result of these increases in levies, houses in Sydney now incur infrastructure charges of $68,233, of which over $66,000 relate to indirect charges. From 1995 to 2006, total indirect infrastructure charges per lot for new housing developments increased by $55,000; an indexed increase of 171.9 per cent.

By stark comparison, Brisbane homes have seen no increase in indirect infrastructure charges while Melbourne has seen an indexed increase of just over 30 per cent. I will say that again: there has been an indexed increase in Sydney for new housing developments of 171.9 per cent for infrastructure. These significant increases in indirect infrastructure charges in Sydney have had a serious impact on the housing affordability in my electorate of Mitchell. Whilst the residents of Mitchell are paying more and more for infrastructure, they continue to receive some of the most substandard public transport facilities in the country. They are paying an indexed increase of 171.9 per cent, but the state government will not fund a rail line for the north-west of Sydney.

I want to speak about that for a moment. The New South Wales state government has really abandoned one of its core responsibilities here. One of Infrastructure Australia’s first priorities should be to consider the construction of a heavy rail line in the north-west of Sydney. I have written to Minister Albanese requesting an urgent meeting to discuss what the federal government can do to fund vital infrastructure in Western Sydney in a timely fashion. I know that the minister states that he wants a 12-month review—a 12-month delay to give time to discuss or examine that. A 12-month delay when you have been waiting 20 years for a rail line is another unfair imposition on the people in Mitchell. If you look at the record of the New South Wales state Labor government, there is a case for the federal government to intervene.

On 29 November 1998, three months prior to a state election, the New South Wales state government first promised $29 million for the north-west rail link from Epping Station to Castle Hill. Since then, the government has re-announced the north-west rail link five times. On 9 June 2005, Bob Carr announced an $8 billion, 15-year metropolitan rail extension program. This announcement included the north-west rail link, a new passenger line from Cheltenham to Rouse Hill and long-term plans to extend the Vineyard and Richmond lines. On 20 November 2006 the government re-announced the completion of the north-west rail line by 2017—the first stage to be completed by 2015 and the second stage by 2017. The government recently re-announced the line in June 2007 with an extension from Rouse Hill to Vineyard station on the Richmond line. All of this shows that if it were not for the previous federal government, very little would have been done in the last 10 years. The states are failing.

Another important matter that Infrastructure Australia needs to consider—and one of the major disincentives—is the bad reputation infrastructure is getting from tolling. The New South Wales state government have used a system of geographical discrimination based on where people live. They subsidise people for using some tollways but not for using others. They do it on the basis of where a person comes from and how they get to work. For example, people in my electorate pay tolls to get to work. Based on a 48-hour working week, motorists travelling to the city are now paying $16.90 a day—which is $84.50 a week, $330 a month or $4,056 a year—just to go to work. By contrast, a person using the M4 and M5 motorways in the south-west of Sydney pays $1.20 a day—which is $6.00 a week, $24 a month or just $288 annually once the state government rebate is received. That is $4,056 a year versus $288 a year. This is another example of a failure in the system of infrastructure that has been created in Sydney.

Residents of north-western Sydney pay an average of $4,000 in post-tax income on tolls—including the M2, the M7, the Lane Cove tunnel and the harbour tunnel—while residents in western Sydney using the M4 and M5 pay less than $300 a year due to cash-back schemes. For those members not from Sydney, what is the difference between M2 users and M4 and M5 users? I would argue that it is where they live; it is discrimination between a safe seat and a marginal seat; it is a deliberate policy of geographical discrimination put in place by the state government. Infrastructure Australia must take state governments to task for these appalling and discriminatory decisions. The use of subsidies for some areas of Sydney but discrimination against other areas, on no logical basis, must be abandoned. It will be a good thing if Infrastructure Australia can remove these sorts of scandalous arrangements from infrastructure management in Australia.

There are other major infrastructure projects that the New South Wales state government has failed on, and arrangements that must be considered in this review. You could talk about things like the closure of Epping Road—another public-private partnership in which the state government has closed lanes towards the Sydney CBD on a major public road to funnel people into a privately operated tollway. Again, the tollway and the public-private partnership is a good development. It is good to get private capital into infrastructure. It is good for the government to be encouraging it and ensuring that the arrangements can be put into place to manage it. It is manifestly wrong of any government—whether it be a state government or a federal government—to close public roads that have been paid for by people’s taxes over many years in order to funnel motorists into a tollway or motorway so that they have no choice about the roads they use.

In addition we have seen other fiascos in Sydney such as the T-card fiasco. We are one of the few major cities in the world that does not have an integrated transport network. The New South Wales state government has spent 10 years planning for a smartcard system on Sydney’s buses, trains and ferries, yet it has become a total and unmitigated failure. This is another thing that is preventing the construction of integrated and future orientated infrastructure. Major cities around the world—including Hong Kong, London, Singapore, Melbourne, Brisbane and Perth—have successfully introduced smartcard technology for public transport, but not Sydney. We have four separate ticketing systems for trains, ferries, buses and light rail. That is disgraceful in city like Sydney.

I also want to talk about some of the failures in infrastructure planning that have happened in other parts of Sydney. For example, we have had more rail lines cancelled. A Parramatta to Epping railway line has been announced many times before state elections but cancelled after those state elections. My essential point in reinforcing this failure at the state level, particularly on the part of the New South Wales state government, to provide infrastructure is that states do need to be taken to task over these failures. Infrastructure Australia ought to cooperate with the states, but it also needs to be very frank with them. It needs to say to the states: ‘You have failed here. You have given commitments. You haven’t met your commitments. We require a better performance from you.’ You cannot be cosy with the states when they have not provided essential infrastructure. It has to be critical where required, and it has to point to the failures of public-private partnerships whereby state government departments have negotiated their own deals which have resulted in a scandal and the bankruptcy of those private organisations. People in north-west Sydney—

Ms Neal—It’s a private risk.

Mr HAWKE—Risk becomes a big thing—the risk is dealing with the New South Wales state government. I would argue that is one of the biggest risks. Never mind the constant attacks on oil companies. People in north-west Sydney also pay 52c a litre in excise. I think people want to see that 52c going back into their roads. It is not right that governments levy such a substantial amount on each dollar we pay at the petrol bowser and yet our roads in north-western Sydney are still in a shocking state. We need major upgrades.

Another important concern of Sydneysiders in the future will be the F3 motorway. Each day we have 75,000 vehicles travelling on the F3. During peak times 3,000 vehicles an hour vie for lane space. The F3 is well past its capacity and usefulness as Sydney’s northern gateway. Recently we saw the whole motorway closed because of a bushfire, and people were unable to access the northern gateway to Sydney. There was a recent report in the Sunday Telegraph that there were 16 closures on the F3 in at least one direction in the past year due to accidents or bushfires, causing delays of between 30 minutes and several hours.

The recent Pearlman report recommended that the government could begin work immediately on the construction of a link between the F3 freeway and Sydney’s north-west orbital at the M7. I strongly support option (c) of the Pearlman report. I would make another observation about this report. Infrastructure Australia are going to conduct a 12-month review. In this review they ought not to reinvent the wheel and start from scratch. They ought to consider examining very valuable and detailed reports such as the Pearlman report, which has recommended vital infrastructure. If Infrastructure Australia is only directed by the minister to look at the projects that he considers to be important, rather than having a broader look at what good work has already been done at the federal and state levels in recommending vital infrastructure upgrades, that will be a weakness in the new Infrastructure Australia system. The Pearlman report does call for option (c) planning to be commenced, which would see the second crossing of the Hawkesbury River. It would provide greater opportunities for business and better conditions on local roads. It is the option that the majority of local residents in my electorate of Mitchell would support. The state and federal governments do need to get on with the job of progressing option (c) and giving residents in north-western Sydney some reprieve.

There has been a contention in this bill and the events surrounding the formation of this bill that there was no action by the previous government in relation to infrastructure. As I mentioned, people in Western Sydney know that the previous federal government believed in the provision of essential infrastructure, and the M7 orbital project is an example of one of the best motorways in Sydney. Due to the strategic and economic importance of Western Sydney, and the fact that it had become the third-largest producer of GDP behind the Sydney CBD and Melbourne, the Howard government funded the Western Sydney Orbital. Many of my constituents remark that the tolls for the M2 and the state funded access routes to the city are exorbitant and negative. It is widely regarded that the M7 is well priced and useful, something that we can thank the previous government for.

Infrastructure Australia will be of no use to anyone if it is not completely nonpartisan. In the interests of transparency and open government that we hear so much about from the other side these days, the directions from the minister to Infrastructure Australia ought to be tabled before the parliament. I think that would really strengthen the system and the accountability to this place. It is a sensible and proper proposal. It will not work if it does not ensure that there is accountability for the minister’s directions to Infrastructure Australia. I note that at the moment it is proposed that they be in the annual report of the Infrastructure Australia body. If that is the case, then why would there not be a provision for the minister’s directions to be tabled in the House?

Infrastructure Australia could be an important development in infrastructure in Australia. It must not, as I have spoken about, add an extra regulatory burden to infrastructure provision in Australia. It will not succeed if it does not urgently review some of the discriminatory policies that have happened at state level and some of the failures that states have made in the provision of infrastructure in Australia. It must urgently consider major projects in some of the fastest growing corridors of Sydney to recommend and fund the urgent construction of projects such as the north-west rail line and a second crossing of the Hawkesbury River. This minister and this Labor government must ensure that Infrastructure Australia is something that adds value to the process of infrastructure provision in Australia and does not add regulation and unfair burdens to already challenging circumstances.