May 29, 2012

Nation Building – Our Road to Prosperity – Property Council of Australia: Inaugural Nation Building Oration

It is a privilege to stand here tonight to deliver the inaugural Property Council of Australia’s Nation Building Oration.

Like the Prime Minister whose message we have just heard, I congratulate you on your decision to place nation building at the centre of the national conversation.

It’s an important subject and as even a cursory glance at the history books reveals, no nation can prosper without paying serious attention to nation building.

With half Italian blood flowing through my veins, I have something of a passing interest in the efforts the Romans.

It is an extraordinary fact that at the height of their empire, their roads spanned a remarkable 400,000 kilometres.

And these weren’t just dirt tracks.

Almost one fifth of these roads were paved – they used broken stones mixed with sand and cement, with curved stones along the centre for drainage and tightly packed paving stones on top.

Some of those roads still exist today.

As the official register of roads recorded around the time of the death of Julius Caesar:

“There is hardly a district to which we might expect a Roman official to be sent, on service either civil or military, where we do not find roads. They reach the Wall in Britain, run along the Rhine, the Danube and the Euphrates, and cover, as with a network, the interior provinces of the empire.”

The Romans built these roads for a very good reason: they saw them as the key to progress and prosperity.

Of course there was also the minor matter of world hegemony!

Here in Australia in the 21st century, the Government’s objectives are more modest.

We are, however, on a mission to build the nation.

To provide the critical infrastructure and transport links that allow us to advance and grow.

Prior to 2007, of course, there had never been a Federal Infrastructure Minister.

Its creation reflects the importance that Federal Labor places on nation building.

On September 12th this year, it will be precisely a century since the Labor Government of Andrew Fisher began work on the transcontinental railway.

 “This great nation work,” as he called it, was “an urgent necessity for reasons of economy, transport and effective defence.”

 Since then we’ve seen the Snowy Mountains Scheme, the ABC, the Sydney Opera House, and now the National Broadband Network.

 Labor has a tradition of governing for the long-term.

 This is the key to nation building.

 Of breaking the nexus between the election cycle and the infrastructure investment cycle.

 Since 2007, we have engaged in a dynamic and significant reform agenda.

When we came to office, there’s no doubt we faced a big challenge.

Chronic underinvestment in infrastructure had left a serious deficit.

The OECD ranked us 20 out of 25 member nations when it came to our investment in public infrastructure as a proportion of national income.

Public investment in the nation’s infrastructure had fallen by close to 20 per cent.

This had cut almost one percentage point off annual growth.

More than $2 billion was slashed from the Federal roads budget when the Coalition came to office.

Rail investment was virtually zero.

Federal investment in urban public infrastructure was actually zero.

The IT and Innovation Foundation ranked Australia 27th out of 30 countries on average download speed.

And the shape of our cities barely rated a mention in the national political conversation.

Importantly, there was a great lack of Commonwealth engagement with private finance to fund Australia’s pressing infrastructure needs.

 

URBAN POLICY

 I’d like to both commend and encourage the Property Council’s current campaign – Make Our Cities Work – which was launched by Peter in March.

He spoke about ‘more jobs near homes’, ‘sensitive in-fill’, ‘making our neighbourhoods hum’, ‘more money for the right infrastructure’ and ‘putting our cities at the centre of the national agenda’.

It was an approach consistent with our National Urban Policy, launched before a breakfast hosted by the Property Council in Sydney a year ago.

The launch of that policy signalled an important change in our national approach to cities.

Despite the efforts of urban advocates such as Whitlam, Uren, Hawke and Keating, federal involvement in cities was discontinued.

We knew this had to change.

Our cities are too important to ignore with three out of every four of us living in a major city.

It is our cities that are the powerhouses of our economy, generating 80 percent of our national wealth.

Last October we launched the second edition of The State of Australian Cities Report.

If ever anyone needed evidence that there is a hunger for knowledge about the well-being of our cities, this publication is it.

Collectively, the 2010 and 2011 editions have now been fully-downloaded more than 1.2 million times – sadly, with no cover price or royalty rights – or we’d have a financial blockbuster on our hands.

The 2012 edition of that report is now being prepared and has the benefit of the latest census data.

It will also contain several new categories, such as crime levels, community safety perceptions and rising city temperatures.

Late last year we also launched an urban design protocol, a practical guide to encouraging the finest design and architecture throughout our cities.

It is also something of a success story with its adoption so far across 40 different public and private sector organisations.

A couple of months ago, Peter joined with 20 or so other experts in the cities field for the first meeting of the Urban Policy Forum.

The role of the forum is to advise the Government on the implementation of our urban policy – in short, to make sure we get it right.

The forum is working directly on two important pieces of work.

Firstly, in the formulation of our active transport policy, in other words, improving opportunities for pedestrians and cyclists.

And secondly, helping craft a set of common indicators that cities can use to set targets to improve productivity, sustainability and liveability.

Recently, we announced successful projects in our Liveable Cities program, and we will shortly name the successful recipients of the Suburban Jobs program.

Both these programs have been massively oversubscribed, an indication of the interest in improving our cities, and the lives of the millions of Australians who live in them.

The COAG Reform Council’s review of strategic planning systems points to a clear and continuing role for the Commonwealth, which we will be pursuing through Ministerial Council.

The Property Council rightly concluded that in this work lay the foundation for much-needed change in the way cities are planned and managed.

 

NATION BUILDING

 Let me turn now directly to the Government’s nation building agenda.

Right now we are in the midst of a $36 billion nation building program, with planning well underway for the next phase which will begin in 2014-15.

It is worth reminding you that this $36 billion national investment in our roads, rail and ports is the largest in Australian history.

A few key points –

  • We’re rebuilding one-third of the interstate freight network – to give you an idea what this means, the work on the Brisbane to Melbourne freight line is shaving eleven hours off the trip making it possible for companies such as Woolworths to consider returning some of their sizeable freight load from road to rail.
  • Our national roads budget is twice that of our predecessors – at $28 billion over six years.
  • We’ve nearly finished the duplication of the Hume and in the recent Budget set aside our share of the funds needed to complete the long overdue duplication of the Pacific Highway by 2016.
  • Here’s one I am particularly proud of, we’ve committed more to public transport since 2007 than all previous federal governments combined since Federation in 1901.
  • And, we’re conducting a detailed feasibility study to test the viability of high-speed rail for Australia’s east coast.

Beyond the transport infrastructure budget, we’re also building the largest nation building project in our history – the National Broadband Network.

This will change the way Australians work and do business.

It will overcome the tyranny of distance between each other and the world.

The NBN will allow us to get more out of our existing transport networks with the use of Smart Technology, which can reduce congestion and increase traffic speeds by up to 15 percent.

 

LONG TERM VISION

 The game-changer in our approach to nation building was the creation in 2008 of Infrastructure Australia.

For the first time, a body independent of Government, assesses and prioritises our national infrastructure needs.

IA has created a national infrastructure pipeline which is regularly updated.

The observant among you may have noticed that despite the hard work to return the nation’s ledger sheet to surplus, we did not defer or step away from Infrastructure Australia’s priority list.

As a result of decisions taken in this year’s Federal Budget, we have now committed funding to every nationally-significant, ‘ready-to-proceed’ project listed on Infrastructure Australia’s original 2009 Priority List.

We understand how critical investment is for future productivity and how important it is to maintain investment certainty.

IA has also created two national plans to better connect factories, farms and mines to our cities and ports.

They are the National Ports Strategy and the National Land Freight Strategy.

The strategies and the work of IA herald a far more sophisticated, nuanced and networked approach to freight and passenger movement around Australia.

It’s no longer about favouring road over rail, or vice versa, it is about using the best of both in a truly integrated way.

A good example of this is our plan for the Moorebank Intermodal, one of several intermodal hubs either planned or under construction across the country.

Moorebank delivers what many have been demanding: that the Commonwealth use its extensive landholdings and programs to unlock opportunity for private financing of the big transformative projects that will shape our economies and our cities.

We see private sector participation as crucial if we are to have any hope of properly addressing Australia’s large infrastructure deficit which Infrastructure Australia estimates conservatively at $300 billion.

We are relocating the existing Moorebank defence facility to free up 220 hectares for a port shuttle and an interstate terminal.

We are establishing a Government Business Enterprise to oversee the tender process for the private sector to design, build and operate the terminal facilities.

The productivity gains will be considerable with thousands of jobs during construction and then ongoing.

Importantly, it will remove 3,300 trucks each day off the road, reducing congestion and improving air quality for the people of Sydney.

Moorebank will be a case study in how the private sector can be facilitated by Government to deliver productivity, employment and environmental benefits.

 

PRIVATE INVESTMENT

 We recently set aside $25 million for a new model of bringing private finance into the funding of public infrastructure.

We will be testing this ‘special purpose vehicle’ on two construction projects in Sydney – the missing link connecting the M2 with the F3, and to expand the capacity of the M5 East.

The M5 East is arguably Sydney’s most important economic transport route, yet too often it is at choke point.

Both these projects are complex from an engineering point of view.

If the ‘special purpose vehicle’ works as planned, it may signal a new way of fast-tracking urgently-needed big ticket projects.

The ‘vehicle’ will undertake the preparatory work needed to take the project to the marketplace so the private sector can step up to make the projects happen.

It follows a new tax treatment announced in last year’s Budget for nationally-significant infrastructure projects.

The change allows early stage losses to be uplifted over time and grants exemptions from tax rules which prevent tax losses being used when there is a change of ownership.

At Budget time last year, we also announced a working group of industry leaders to advise on better ways to attract private finance to public infrastructure.

And, earlier this month, we published a single national schedule of every infrastructure project valued over $50 million from every State and Territory and every level of Government.

As I said a moment ago, Governments alone can’t fund everything.

But we can at least remove the mystery and the hurdles that have deterred private investment til now.

Governments must work with markets not against them if we are to address the congestion that is dragging like an anchor on our productivity.

 

CONCLUSION

 In conclusion, just like the Romans, this Government knows that Australia’s future depends on the strength of its nation building.

That’s why we have underway the biggest nation building program in our history.

We have done this through tough economic times and have not shied away from tough decisions.

Our nation building program goes beyond the political, beyond the electoral cycle, because we know quite simply, our economic future depends on it.

A strong economy brings opportunities and jobs which in turn creates a more productive, fairer and inclusive Australia.

There is still much to be done and I look forward to doing it with you.