Subjects: Budget 2017; infrastructure, Western Sydney Airport 

ANTHONY ALBANESE:  Thanks for joining me. It is becoming increasingly clear that in spite of the Government discovering that infrastructure investment can contribute to economic growth and can contribute to job creation, next week’s Budget potentially sees a decline rather than an increase in infrastructure investment. The nonsense this morning of having a centre piece in the Budget of establishing an Infrastructure Financing Unit in the Department of Prime Minister and Cabinet and telling the states and local government that they can borrow for infrastructure upon the recommendation of this unit for projects is quite frankly a withdrawal of the Commonwealth from its responsibility to nation build. Nation building requires a pipeline of infrastructure projects. It requires a government to have a forward vision plan, not to be picking off project by project.
It is very clear now that this Government has been in office for four years that we’ve seen four years of neglect and that frankly they have no idea when it comes to how to build the railways, the roads and the ports that Australia needs for our future economic growth.
There is not a shortage of available capital in his country. State and local government can borrow themselves at a rate that is only slightly higher in some cases than the Federal Government rate. So this is frankly an excuse to not do what is necessary. It also is very clear that on a range of projects that have been approved by Infrastructure Australia, that are ready to go, such as Brisbane’s Cross River Rail, Melbourne Metro, Western Sydney Rail, AdeLINK light rail in Adelaide and Perth METRONET, this Government continues to just find excuses. Take Brisbane’s Cross River Rail, approved by Infrastructure Australia in 2012 and then funded by the Labor Government after consultation with the Queensland Government of Campbell Newman in 2013 and they are still going through this nonsense about there being a need for further planning and pretending that value capture is somehow a new idea.
Now the journalists in the gallery who write these stories mightn’t pay attention, but they should go back and have a look at the Budget papers from 2013 that showed that projects like Cross River Rail in Brisbane and the Melbourne Metro had value capture as part of the projects. There is nothing new in any of this. This Government comes up with platitudes and spin. It’s not coming up with investment and that is what is required.
At the moment the Reserve Bank, economists, the business community are all despairing at this Government’s lack of vision. Malcolm Turnbull thinks he is the smartest person in the room, which is why he is out there establishing a unit in his own department, sidelining Infrastructure Australia, sidelining the Infrastructure Department. Infrastructure Australia faces a 25 percent cut in its funding on July 1. If the Government is to be taken at all seriously those cuts need to be reversed.
Secondly I will make some comments about Sydney Airport’s decision to not take up its notice of intention with regard to its first right of refusal to build the Western Sydney Airport. This is a decision that Sydney Airport have made and I thank Sydney Airport for the courtesy of informing me in advance of the statement that they would be putting out this morning. Western Sydney Airport is an essential piece of infrastructure.
The Government of course can look at models that are already in place such as the model that we established for the Moorebank Intermodal Terminal to construct the airport and then to sell the lease of the airport. That will enable it to get on with the business of the earthworks that are required, to get on with the business of making sure that Sydney Airport isn’t just a terminal and a runway but is a catalyst for job creation in Western Sydney. We are already seeing substantial investment off the back of the Western
Sydney Airport - the science park to the north of the airport for example will create some 12,000 jobs, 4500 residences, a K-12 STEM school -science, technology, engineering and maths, - the first in Australia. There’s an MOU signed with the Catholic Education Office to make sure that can proceed.
So this is an exciting opportunity for jobs and economic development in Western Sydney. But it needs to be got right and that’s why the funds need to be brought forward for the creation of the vehicle which is going to construct the Western Sydney Airport and the funding needs to be there also for the Western Sydney Rail access through that airport on a north-south corridor. This is important not just for the airport but for the employment lands, for making sure that north-west Sydney is connected up with the western line near St Marys; is connected up through Badgerys Creek Airport to Leppington, the south-west line through to Bankstown and also through to the Macarthur Line at Campbelltown.
That’s essential - that rail be up and running from day one of the airport. This is an opportunity. The Government needs to get it right. Labor hasn’t played politics with these issues. It’s about time though that the Government got its act together on infrastructure development. A start would be next Tuesday’s Budget.
It’s good enough for Malcolm Turnbull to ride on trains, to ride on trams and take selfies when he does so. But what Australians really want is for him to fund trains and trams for our capital cities that are suffering from urban congestion and that needs to happen in next Tuesday’s Budget.
REPORTER: Regarding the second Sydney airport, is the Commonwealth capable of building a project of this magnitude, with all the risk that's attached to it?

ALBANESE: Of course the Commonwealth is. The Commonwealth, of course, has built major projects; the Snowy Mountains Scheme, the Trans-Continental Railway. The Commonwealth, indeed, built just about all of the existing airports. Certainly all of the capital city airports around Australia were built by the Commonwealth Government. So the Commonwealth, of course, is in a position to do so.
When we're talking about the Western Sydney Airport, we're talking about a population of some 2.2 million people right now. That will grow to four million. There are enormous opportunities around this airport. There's no doubt that private finance will be very interested and will be falling over each other to gain the lease of this airport when that's done. But the Commonwealth is in a position to do so and frankly the planning work is done.
The planning work, a lot of it, was done in the 1980s for this airport. So there is no reason at all why we can't see bulldozers and tractors on the ground clearing the land, which is a major part of the works that are required - the land that the Commonwealth purchased way back in the 1980s with the airport in mind.
REPORTER: When was the last time the Commonwealth directly ran and funded and built (inaudible)?

ALBANESE: Moorebank Intermodal, right now. The Australian Rail Track Corporation right now. There's a range of infrastructure projects that the Commonwealth runs and operates. We operate basically most of the freight rail system around Australia is run through the Australian Rail Track Corporation. The National Broadband Network is a much more complex exercise of the rolling out of fibre, is what it should be; 21st century technology. Under Malcolm Turnbull, of course, we have a bit of 21st century technology, a bit of 20th century technology with HFC cables thrown in and a bit of 19th century technology with copper for good measure.
But the fact is that that is a corporation that is rolling out this project. I should imagine that the Commonwealth will establish a body with a board and a corporate structure to do this. And of course the Commonwealth; just like a private sector corporation, Commonwealth corporate structures can do infrastructure projects such as this.
REPORTER: Can it be sold for a profit, or must it be sold for a profit?

ALBANESE: There's no doubt that airports, if you have a look at Sydney Airport, Melbourne Airport, Brisbane Airport, Gold Coast; they are all operating with substantial returns to investors. That's why superannuation funds in particular have been keen to invest in airports and I have no doubt that there will be a range of (inaudible) investors, both domestic and international who will be very keen to participate.
REPORTER: What other risks are involved in building the airport?

ALBANESE: That's a matter for entities to judge. But it's very clear that if you have a market of 2.2 million people to start with, right now, and growing, then that's a pretty substantial base. It's more than the entire population of Perth, Adelaide and Hobart combined. I just flew in from Adelaide this morning. It's a very good airport; it's a very efficient airport. It's been modernised in recent years. It's not the shed it used to be where you landed and walked along the tarmac. It's now a major city airport with international flights. This morning there were flights going to China from the terminal, which, of course, is a joint domestic/international terminal. It's very clear that Western Sydney has a lot more people than Adelaide. It also has an economy that is bigger than Adelaide's economy. There's no doubt that this will be a massive opportunity for growth, for Western Sydney and that's why, for too long, people have seen this as Sydney's second airport. This has to be seen very much as Western Sydney's first airport. This is the third largest economy in Australia; 2.2 million people and growing up to four million. That is certainly an economic entity that deserves to have transport infrastructure. And what we know is that if you want to stimulate an area the two things that you can do is a university or an airport. They are the two pieces of infrastructure that produce a massive multiplier effect in terms of investment from the private sector and we are seeing that already.
REPORTER: So in a nutshell, today's events are a good outcome then?

ALBANESE: It's an outcome that's a decision for Sydney Airport. I wouldn't have, and I think if you go back and have a look at Hansard you'll see when the Sydney Airport was leased, only in 2002 by the way - it's not like Governments being involved in airports is this thing that has never happened. For all of the last century airports were run and owned by governments and indeed many airports around Australia are still run by their local government authorities. So when the decision was made, which wasn't in the original submission to Cabinet, did not give Sydney Airport the right of first refusal, and there's no reason, I believe, why that should have ever been included in the legislation. And the people who were involved in that perhaps are in the best position to explain exactly why they did that. Common sense tells you that some competition between Sydney Airport and Western Sydney Airport, just like there is competition and separate ownership structures between Brisbane and the Gold Coast for example. Two airports, about the same distance, roughly, as Sydney and Western Sydney Airport, operating successfully. Gold Coast Airport has done very well to open itself up to international traffic. They have budget airlines. They also have freight. They also have, of course, the major domestic airlines of Qantas and Virgin operating out of the Gold Coast as well.
I have no doubt that Western Sydney Airport over a period of time will be a full service airport servicing the people of Western Sydney, servicing those economies and making sure that it provides a basis for economic growth in Sydney.
REPORTER: So Labor does support the Government building a second airport?

ALBANESE: I think I've made it very clear...
REPORTER: I missed the beginning sorry.

ALBANESE: You're right. Labor supports the Government getting on with the business of building the Western Sydney Airport. This has been proposed for many decades. The planning mechanisms were put in place by the Hawke Government in the 1980s. This will provide jobs and an economic catalyst for Western Sydney and I believe that there's no reason at all why we shouldn't see activity there in the coming months. I note that the current Minister has said that early works would start next year. I see no reason why early works can't start this year.
REPORTER: Should the Government commit at the same time to a train line to Badgerys Creek?

ALBANESE: A train line is essential that it be opened from day one. Everyone knows that that is the case. Everyone knows also the problems that you have retrofitting a train line to Melbourne Airport, for example, the problems that were there in retrofitting a train line to Sydney Airport. Let’s get the infrastructure in place. Good infrastructure development happens before there’s population increases and before there is other development. You get your transport infrastructure in there on the corridor. Most of the land is owned by either the State Government or the Commonwealth Government. It doesn’t require tunnelling. It will require an underground station at Western Sydney Airport. But let’s get on with the job. If we had a bit of foresight then you will get better outcomes and that is why a rail line is essential infrastructure, not just for the airport, but for the science park, for the tourism infrastructure, where we are seeing investments with new hotels to the north of Badgerys Creek, so that the people of Western Sydney can have access through a north-south corridor from St Marys up to Rouse Hill, down to Badgerys Creek, on to Campbelltown. The K-12 school for science, technology engineering and maths, that is being built as part of the science park to the north of the airport needs to be accessible to the students and young people of Western Sydney. That is an enormous opportunity. It will be a first-class facility that will be the first of its kind in Australia. And we want young people from Campbelltown and St Marys to have access to that directly. That’s why you need a rail line.
REPORTER: What conversations has Labor had with the Government on this – the Western Sydney Airport?

ALBANESE: Well we’ve had discussions over a period of time. I haven’t had a discussion with the Government today but that’s a decision for them. I did get a heads-up from Sydney Airport – Kerrie Mather rang and we have had contact with each other and with other people at Sydney Airport this morning and I thank Sydney Airport for their courtesy.