Feb 25, 2015

Adjournment – Infrastructure Australia: No Business Case for Westconnex

Mr ALBANESE (Grayndler) (19:50): I was surprised last December when in a media release from the Minister for Infrastructure and Regional Development, Warren Truss, and his assistant, Mr Briggs, they stated, along with their magical infrastructure reannouncement tour trying to claim a range of projects that were funded by the former Labor government, that Infrastructure Australia had appointed a new CEO. I was surprised by that because no announcement had previously been made of who that was, and in fact that was not the case. Michael Deegan, the infrastructure coordinator, left Infrastructure Australia on 7 February 2014. More than a year later there has been no-one in charge of Infrastructure Australia. There have been three acting CEOs or coordinators, but no-one in charge. It is no wonder that the infrastructure process has been abandoned that was established and supported by the business community and by all who are concerned with infrastructure development in this country.

Indeed, we have seen in two examples the consequences of a lack of proper process from this government. One of those is now subject to an Australian National Audit Office inquiry into the approval and administration of the Commonwealth grant funding for the East West Link project in Victoria. We now know this has a cost-benefit analysis of 0.45, or 45c of benefit for every dollar that would be invested—and not just $3 billion allocated by the government, but $1.5 billion paid in the last financial year. This was for a project that was not due to commence for some period of time, in contravention of the government’s policies that it would make milestone payments—upon actual construction. And, secondly, there would be an Infrastructure Australia assessment and a cost-benefit analysis published for all projects above $100 million. Both of those have been breached.

In New South Wales, the WestConnex project has had $2 billion made available through a loan concession to New South Wales. During the last financial year—for a project, again, where a hole has not been dug—$500 million has been paid into the bank account of New South Wales. And that is before the proper process has happened. Indeed, the New South Wales Auditor-General said this in his report, WestConnex assurance to the Government, released at the end of last year:

The preliminary business case … had many deficiencies and fell well short of the standard required for such a document.

That was on page 3. And:

… we have seen no evidence of an independent, arm’s length review of the traffic analysis used for the final business case, by someone technically qualified to do so, before the business case was presented to the Government.

We did not find peer review outputs for land use, urban planning or transport planning.

That was on page 26 of the New South Wales Auditor-General’s report. That is of great concern for those who want to ensure that there is proper value for taxpayers’ money and that infrastructure of projects achieve their objectives. In this case the objective is allowing access to the city for people who live in Western Sydney and allowing freight to get to the port for the important freight task that will grow at Port Botany. Those are the objectives and it needs to be outlined how they will occur.

The minister himself on last night’s Channel 7 News was interviewed by Lee Jeloscek, and he was asked this: ‘How many at the moment use the M4 and the M5?’ His answer was: ‘Um, sorry, I haven’t got those numbers with me.’ The next question was: ‘So, how many tunnel stacks will there be for stages 1, 2 and 3 of the WestConnex?’ Mr Gay’s answer was: ‘Look, I couldn’t tell you the exact number.’ Another question was: ‘How many drivers a day are expected to use the WestConnex when it’s operational?’ Duncan Gay: silence, laughs.

But it is no joke. Infrastructure development must be done properly—not just rhetoric and handing over money for projects that are not ready to commence, that have not been through proper processes, that do not achieve the outcomes they were intended to reach. This government needs to get its act together on infrastructure development, and these projects show exactly why.