Aug 25, 2017

Speech to Queensland ALP Business Forum – Building Queensland’s Future – Brisbane Exhibition and Convention Centre

Good government is about planning and building for the future.

Indeed, in the highly competitive, globalised world of the 21st Century, the prices consumers pay, the profits businesses make, the quality of life people enjoy and the export income that’s generated will more than ever depend on the adequacy and quality of a nation’s roads, railways, sea and air ports, electricity grids, and telecommunication networks.

Simply put, infrastructure matters.

And that truism is even more apt if you are wanting to exploit the economic potential and connect the communities of a vast, decentralised and fast-growing state like Queensland.

But those very characteristics of this state make infrastructure provision particularly challenging for any Queensland government.

As we all know, Queensland is a big place – bigger than the UK, Germany, France and Italy combined.  And unlike the other states in the Commonwealth, its population is far more dispersed, with more than half of Queenslanders living outside of metropolitan Brisbane.

On top of that the state’s population will continue to grow at a faster rate than Australia overall.  In the ten years to 2016 Queensland’s population grew by 21 per cent to 4.85 million people.  By the early 2030s, 6.5 million people – or more than one in five Australians – will be calling Queensland home.

The bottom line is this: while it is of course the responsibility of the State Government to take the lead when it comes to identifying Queensland’s long-term infrastructure needs, it is also the case that modernising the state’s infrastructure is ultimately a task too big for them alone to achieve.

It will require a partnership between the state and the private sector.

And it will require a national government that’s prepared to play its part.


Unfortunately, in recent years Federal infrastructure investment has been in decline.

In 2016-17 alone, the Turnbull Government slashed the Federal infrastructure budget by $1.6 billion, with almost a quarter of that cut falling on the state of Queensland.

They cut funding for major road projects, including the Bruce Highway Upgrade.

They cut funding for fixing dangerous blackspots on local roads.

And they even cut funding for building new roadside facilities such as rest stops for truck drivers.

And despite all their spin in the lead up to this year’s budget about “good” debt versus “bad” debt, that downward trend is set to continue.

Over the next four years, Federal infrastructure grant funding – the money that goes to the states, territories and local government to deliver major road and rail projects – will fall from $8 billion this financial year to $4.2 billion in 2020-21.

In the words of the peak industry body, Infrastructure Partnerships Australia:

“…the Budget confirms the cut to ‘real’ budgeted capital funding to its lowest level in more than a decade – using a mix of underspend, re-profiling and narrative to cover this substantial drop in real capital expenditure.”

The fact is Federal grant funding is vital – and less of it will mean less infrastructure.

But it gets worse.

According the independent Parliamentary Budget Office, Federal investment in the nation’s transport infrastructure, expressed as a proportion of GDP, will drop from 0.4 per cent to 0.2 per cent over the coming decade.

That’s a 50 per cent cut.

At a time when the investment phase of the mining boom is winding down, the current government should be building national capacity.  Instead, they are cutting investment in the infrastructure that would do precisely that.


However, the Prime Minister thinks he has found the silver bullet that will more than make up for the cuts he is making to the traditional sources of Federal infrastructure funding – namely, the creation of the Infrastructure Financing Unit within his own Department.

According to the Department’s website:

“The new agency will work with Commonwealth Agencies, the private sector, states and territories on funding and financing opportunities such as public private partnerships, concessional loans, equity injections and value capture.”

But this new bureaucracy is a solution to a problem that does not exist.

Firstly, it duplicates what already exists at a Federal level. Infrastructure Australia already has the legislative mandate to advise government on how projects can best be financed.

Secondly, public private partnerships, value capture and equity injections are not new. The fact is state governments, together with the private sector, have long been pioneers in the development and implementation of these types of so-called “innovative” financing arrangements.

What’s more, the former Federal Labor Government also made use of such arrangements to deliver major projects such as Northconnex and the Moorebank Intermodal Terminal in Sydney, as well as Legacy Way here in Brisbane and the Gold Coast Light Rail.

And under the agreement I struck with the former Queensland LNP Government back in 2013, a combination of innovative financing arrangements – together with traditional grant funding – was to be used to deliver the Melbourne Metro and Cross River Rail.

For the reasons I have just outlined, the next Federal Labor Government will abolish the IFU and redirect the resulting savings into Infrastructure Australia.  This will in part be used to re-establish the Major Cities Unit to drive policies that will improve the productivity, sustainability and liveability of our nation’s urban communities.

Another concern I have about this Government’s decision to withdraw public investment and make the private sector do more of the heavy lifting when it comes to infrastructure provision is the effect it will have upon what gets built in this country.

If whether or not a commercial return can be realised is the sole or even the primary criterion by which the merits of proposed projects are judged, than we will inevitably see a distortion in the infrastructure market away for urban passenger rail and towards toll roads.

The fact is public transport does not produce an immediate commercial return.

That’s why, when governments are weighing up roads against rail, they need to consider the full range of benefits rail delivers including those benefits that are not relevant to private investors such as its economic, social and environmental spin-offs.

For example, rail helps tackle traffic congestion which in turn lifts national productivity.  And as well as reducing carbon emissions, putting freight on the back of trains makes our roads safer by take trucks off them.

So yes, the private sector does have an important role to play in closing the infrastructure funding gap.

But governments cannot avoid the fact that they will have to invest directly if they want projects, particularly urban passenger rail projects, to happen.


And that brings me back to Cross River Rail.

In Federal Labor’s last Budget in 2013 we announced that we had reached an agreement with the then Queensland LNP Government to deliver the project in partnership with the private sector.

The deal was done – a fact publicly confirmed by former Premier Campbell Newman earlier this year.

This of course followed Infrastructure Australia’s approval of it in 2012 as a ‘ready to go’, nationally significant project and significant planning work by the Bligh Labor Government.

Cross River Rail was then and remains today a no brainer.

As well as creating almost 8000 jobs during its construction, this new piece of rail infrastructure will:

  • Ease traffic congestion by taking up to 18,500 cars a day off the major arterial roads;
  • Increase network reliability;
  • Improve access to the CBD;
  • Allow for more frequent services on all suburban lines, including to and from the Gold Coast and Sunshine Coast; and
  • Ensure South East Queenslanders can get to and from work quicker.

Without transformative projects like Cross River Rail, the economic cost of traffic congestion here in Brisbane and across the South East Corner will increase almost five-fold to $9.2 billion a year by 2031.

Yet four years after withdrawing every dollar of Federal funding from the project and redirecting that money to new toll roads in Sydney and Melbourne, the current Federal Coalition Government continues to make excuses as to why they won’t contribute anything toward it.

And earlier today I exposed yet another one these excuses as the dishonest distraction it always was.

For more than two years Malcolm Turnbull and his ministers have repeatedly claimed that the Queensland Government’s business case was deficient because it did not adequately detail if and how innovative financing arrangements such as value capture could be used to deliver the project.

However, Infrastructure Australia has never needed this information.

And we know this because Infrastructure Australia has told us so.

In response to a question posed by a Labor Senator during the most recent Senate Estimates hearings about the need for business cases to fully consider value capture opportunities, Infrastructure Australia responded:

Infrastructure Australia does not take account of funding sources, including value capture, in its economic evaluation of project business cases.

They could not have been clearer.

The reality is, while Malcolm Turnbull likes taking selfies on trains, tram and buses, his policy towards Federal funding of public transport projects remains exactly the same as his predecessor’s.

By contrast the Palaszczuk Labor Government is providing the leadership Queenslanders want when it comes to public transport infrastructure.

In particular, I welcome their decision to simply get on with the job of building this new rail line – and to go it alone if necessary.


Another area of infrastructure where the Palaszczuk Labor Government is filling the void created by a complete lack of leadership from the Turnbull Government is energy.

I am pleased to report that despite the dysfunctionality and policy inertia that currently characterises the nation’s capital – a combination that has directly led to escalating energy prices – the entrepreneurial spirit is alive and well here in Queensland.

Earlier this week I had the opportunity to see that spirit firsthand and meet some of the people building this nation’s energy future with strong encouragement from and the active support of Premier Palaszczuk and her ministers.

Firstly, I visited Genex’s Kidston Solar Project located 280 kilometres north west of Townsville on the site of the now abandoned Kidston Gold Mine.

Stage 1, which involves the installation of 537,000 photovoltaic cells mounted on a tracking system that follows the sun across the sky, is already under construction.

Once commissioned early next year, this facility will generate 50 MW, enough electricity to power more than 26,000 homes.

The second stage will involve the construction of a 250 MW pumped storage hydro project and an additional solar project with a generation capacity of 270 MW, which will make it the largest solar farm in Australia. More important, this integration of solar and pumped storage will provide stability to the grid and a pathway to the 24/7 supply of renewables.

The second place I visited will soon become the site of the Kennedy Energy Park. Located outside of Hughenden, this ground-breaking project will combine solar, wind and battery storage to create renewable energy on a scale comparable to the State’s large coal-fired plants like Tarong and Stanwell – that’s is enough electricity to power up to 1 million homes.

Without a doubt, it is a site of some of the world’s best wind and solar resources.

While both projects have been strongly backed by the Palaszczuk Labor Government, it is also worth noting that both might have withered on the vine if not for the financial support of the Clean Energy Corporation (CFC) and the Australian Renewable Energy Agency (ARENA).  Established by the former Federal Labor Government, these are two national institutions which the current Federal Government has repeatedly tried to abolish.


Lastly, for those wondering what to expect on infrastructure from the next Federal Labor Government, I would simply point them to our record between 2007 and 2013.

During that period we restored national leadership through the appointment of Australia’s first ever Federal Infrastructure Minister and the creation of a Federal Infrastructure Department.  We ended the Commonwealth’s self-imposed exile from our cities and re-engaged with state, territories and local government on urban policy.

We established Infrastructure Australia to break the link between the three or four year electoral cycle and the investment cycle, and bring a strategic, objective, and evidence-based approach to the assessment of projects and the nation’s longer-term infrastructure needs.

And when we return to government we will restore its independence and will listen to its advice.

When it came to actual investment, the former Labor Government doubled the roads budget, increased investment in rail ten-fold and committed more to urban public transport than all our predecessors since Federation combined.

Here in Queensland we more than doubled annual spending from $143 to $314 per Queenslander.

In South East Queensland alone, we committed $6.3 billion to major infrastructure projects – more than what the Howard Government had spent across the whole of the State.

As part of this unprecedented capital works program we upgraded the major roads connecting Brisbane to Ipswich in the west – a $2.5 billion investment in the Ipswich Motorway; Brisbane to the Gold Coast in the south – a $455 million investment in the Pacific Motorway; and Brisbane to the Sunshine Coast in the north – a $195 million investment in the Bruce Highway.

In particular, you may be interested to know that the upgrade of the Ipswich Motorway remains South East Queensland’s largest ever Federally-funded road project.

We also cooperated with the Queensland Government to fix congested sections of the Gateway Motorway, and construct a new interchange at the intersection between Mains and Kessels Roads.

And as I mentioned earlier, we partnered with the private sector and Brisbane City Council to deliver the $1.5 billion Legacy Way.

Beyond Brisbane and the South East Corner, we made an unprecedented $5.7 billion investment in upgrading the State’s most important regional road: the Bruce Highway. That was four times what our predecessors invested over 12 long years of neglect.

In fact, two-thirds of the infrastructure investment we made in Queensland went into the State’s rural and regional communities.


In short, the next Federal Labor Government – like the last one – will follow the example set by our great nation building predecessors – visionaries such as Andrew Fisher who gave us the transcontinental railway; Ben Chifley who turned the Snowy Hydro dream into a reality; and Gough Whitlam who transformed the outer suburbs of our cities.

Labor will plan and build for our nation’s future.

That’s what Labor Governments do.