Subjects: Budget 2017; infrastructure investment; Infrastructure Australia; Glendale Interchange; City Deals.
ALBANESE: Happy pre-Budget day. Tomorrow though, won’t be a happy day for all those concerned with infrastructure and nation building. What we are seeing is the centrepiece of this Government’s infrastructure strategy is a flawed solution. They are trying to find a solution to a problem that doesn’t exist in order to fiddle the Budget figures.
The establishment of the so-called Infrastructure Financing Unit, or Infrastructure Financing Facility, whatever they call it, in the Department of Prime Minister and Cabinet, is looking for a solution for a problem that doesn’t exist. The problem in this country isn’t an availability of capital. We have almost $2 trillion of funds in superannuation. For projects that stack up financing is available. That’s why the Government, repeating its flawed strategy over the North Australia Infrastructure Fund and other funds where they established this loan facility and then nothing actually happened because if a project stacks up, private financing is available.
There is a contradiction at the heart of the Government’s rhetoric. On the one hand they say that they will establish this facility and funding for projects that can’t attract private financing, but at the same time they say that it will be for projects that will be off-Budget because they will produce a return to the Government. If projects will produce a return, then financing is available right now. So that is why the business community, Infrastructure Partnerships Australia and other serious organisations about infrastructure have criticised the Government.
But there’s something sinister as well because what they are doing is sidelining Infrastructure Australia with a 25 per cent cut that was contained in last year’s Budget that will kick in on July 1 – a cut of 25 per cent or one in every four dollars – sidelining Infrastructure Australia even though part of Infrastructure Australia’s core task was to recommend, not just to create a priority list of infrastructure projects, but to recommend a strategic approach; to recommend financing options to the Government as well. So establishing this is sidelining Infrastructure Australia. It’s sidelining the Government’s own Infrastructure Department and indeed the Infrastructure Department has been asked to find the savings to fund the unit in the Prime Minister’s own department. It shows again Malcolm Turnbull’s instincts are all centralist. He doesn’t understand infrastructure.
What he is doing after having four years of an infrastructure re-announcement tour is that we are having projects funded essentially shifting around money. It’s a good thing that the Government is adopting our policy for example of funding Perth METRONET rather than the Perth Freight Link. But that represents four wasted years; money they cut from the 2014 Budget that was there for public transport in Western Australia; four years of prevarication, studies and conflict; four years of planning to destroy the Beeliar Wetlands for the Perth Freight Link project, a project that never ever went to the port. It’s a good thing, but all of that could have been solved if they hadn’t have cut the 2014 Budget public transport funding and if they had gone done that road. And Malcolm Turnbull will only be taken seriously if there is funding in this Budget –real funding for the Cross River Rail Project, the Melbourne Metro, for AdeLINK light rail project and for Western Sydney Rail on the north-south corridor through Badgerys Creek. Unless he does that he can’t be taken seriously; if it’s just about establishing this finance facility that won’t actually contribute to an expansion of infrastructure that is required. That is something that the Reserve Bank Governors, present and past, and all economists are calling for in this Budget
REPORTER: Isn’t picking winners something that most governments have done in the past?
ALBANESE: Well what we did was we funded every single one of the 15 Infrastructure Australia priority projects. That included projects like Majura Parkway and Hunter Expressway – projects that had been on the agenda for many years but because of politics had got in the way. The fact is there is a range of projects that can be funded in the Budget, like the Glendale Interchange in the Hunter Valley. We funded the first stage of it with $13 million. There is more money required. It has a benefit-cost ratio of 98 – $98 of benefit for every dollar invested. It would produce billions of dollars of activity in the Hunter Valley that is required.
They could reverse the cut that was made when they came to office to the completion of the Port Botany Rail duplication. At the moment the duplication went all the way to Mascot but that last couple of kilometres in between Mascot and the port means that if a train is going out of the port another train can’t go in because there is a single line for what is a two-way transport corridor which is required. For a small amount of money being put back that they cut, they could fix that with just over $100 million. For $200 million in total they could do that project and do the loop line near Liverpool, near the Moorebank Intermodal. That’s also required. That would produce a massive productivity benefit.
But instead from this Government, what we’ve seen is a failure to understand that you need that pipeline of projects, that you need an entire strategy to boost productivity and nation building across the country. And having one or two projects with equity injections for projects like Inland Rail and projects like the construction of the airport at Western Sydney, whilst they are good projects, that doesn’t stop the fact that there is infrastructure investment required right around the nation.
In Cross River Rail’s case, a project that was approved in 2012, which the Government has been prevaricating over since it cut the funding when they came to office, just like they cut the funding for the Melbourne Metro. Victoria is receiving 7.7 per cent at the moment of national infrastructure funding. They deserve better in tomorrow night’s Budget, which is why they should also be funding the Regional Rail package, which has been put forward by the Victorian Government under the Asset Recycling Scheme, that they themselves established and they themselves said would be available for projects. Of course those asset recycling funds were created by taking money from the Building Australia Fund that was established under the former Labor Government.
REPORTER: Mr Albanese, on another matter, Troy Bramston has just tweeted that Bill Shorten’s latest TV ad appeals to nativism and xenophobia, is disgusting, degrading and shows appalling judgement and Bill Shorten has conceded himself that it was a bad oversight and says that it won’t happen again. What’s your view on the ad?
ALBANESE: Well I think the ad is a shocker. And it should never have been produced and it should never be shown.
REPORTER: Is it embarrassing for the Labor Party?
ALBANESE: It’s a shocker of an ad. It is not the sort of ad that I want my party to be promoting.
REPORTER: What’s wrong with it? What in particular?
ALBANESE: I think anyone who sees it will know exactly what’s wrong with it.
REPORTER: What is the approval process for such ads? Does the Leader sign off on it?
ALBANESE: I have no idea. I know because of Channel Nine’s exclusive. Clearly it was dropped to Channel Nine to be shown last night. I don’t know what the process is. I’m a member of the ALP National Executive; I assure you that I hadn’t seen it.
REPORTER: Is it particularly embarrassing for Bill Shorten given that he personally appears in it alongside the people (inaudible)?
ALBANESE: Look Bill Shorten has said quite rightly that the ad is inappropriate and it will be withdrawn and he has made those comments. That is the right thing to do.
REPORTER: Just back on infrastructure, it’s reported that the Government will be expanding its City Deal plan. What do you think of City Deals and what cities?
ALBANESE: Well it’s an expansion from zip. Where are they? The so-called City Deals was; he went to Townsville and he matched a commitment that we made for the Townsville Stadium; he went to Tasmania and he matched a commitment that we’d already made in terms of the Tasmanian University. There’s some vague commitment in Western Sydney I think in the order of $50 million or $60 million in total, in total. And then they have the hide to say that our $400 million for Western Sydney Rail in that region through the airport isn’t enough money.
Well if $400 million isn’t enough, then $50 million is pretty small. City Deals – they’ve been talking about it for some time. It sounds nice. It’s a bit like value capture. It captures people’s imagination and some people who haven’t heard it before think it’s new. The London Underground was built with value capture. This is not new. Projects like Regional Rail Link in Victoria under us had value capture attached to it. Noarlunga to Seaford line had value capture. The Cross River Rail project that they cut had value capture as part of the project.
So we’ll wait and see. City Deals is a UK idea that has to be bottom up, that involves local government, that involves essentially capturing the value in increased revenue that goes to the Commonwealth as a result of increased economic activity from an infrastructure project and bringing forward that money on that basis – that it will be returned. So that’s what City Deals are. There isn’t a single one being put forward by Malcolm Turnbull.
You know Malcolm Turnbull likes riding on trains and riding on trams and he takes selfies on them every time he does. What Australians want is for him to fund trains and trams, not just take selfies on them. And he can start with Cross River Rail, Melbourne Metro, AdeLINK as well as of course Western Sydney Rail and the METRONET project.
REPORTER: Just on another issue. You’re a local member as well as a Shadow Minister. Have you been overwhelmed by comments about the Government’s school funding plan? Or has it been fairly quiet?
ALBANESE: I’ve had a busy weekend as a local member. I was in Adelaide, Brisbane and Melbourne last week and yesterday I hosted José Ramos-Horta on the inaugural Tom Uren Lecture at Balmain Town Hall. There were issues raised there about East Timor and about a whole range of issues. That wasn’t one of them but certainly in terms of education funding I’ve had contact from the Catholic Education Office in my electorate. I have spoken to Dan White who I’ve known for a very long time. The Catholic Education Office is actually based in my electorate in Leichhardt and they have expressed real concern about the impact of the Government’s proposal. Thank very much.