Dec 18, 2014

Transcript of press conference on East-West Link

Subjects: East-West Link, Infrastructure Australia, Perth Freight Link, public transport, infrastructure, Martin Place siege, gun control, George Christensen 

ALBANESE: Today I’ve written to the Commonwealth Auditor-General to demand that he conduct an inquiry into the farce that has become the funding by the Commonwealth Government of the East-West Link in Victoria.

What we know from documents that have been released this week by the Victorian Government is that this project simply doesn’t stack up. The cost-benefit analysis that was done by the Victorian Government for this toll road project showed a benefit of 0.45. What that means is 45c of benefit for every dollar that’s invested. That is a shocker of a project.

What’s worse is that then the Victorian Government, according to these documents, which are its own, decided to keep that information from Infrastructure Australia because they knew that anyone who has a look at this will say this project doesn’t stack up.

Now in spite of that Tony Abbott and the Federal Coalition promised $3 billion for this project and put it in the Budget in May.

What’s worse is that they made an advance payment of $1.5 billion for this road. $1.5 billion at a time when they say there was a budget emergency, but put forward for a project with a benefit of 45c return in every dollar. Put forward for a project that these documents show would have taken over 50 years to pay back. Put forward for a project which these documents show 9 out of 10 vehicles would have suffered more congestion if this road had have been built than if things stay as they are at the moment – an extraordinary proposition.

They didn’t just commit the $3 billion in the budget. They took it from projects that had been assessed by Infrastructure Australia – the Melbourne Metro rail project where $40 million had been spent making sure there was a proper business case and a proper plan, the M80 road project in the outer suburbs of Melbourne, which is underway and has a positive cost-benefit analysis, and even the Managed Motorways project, including on the Monash Freeway, where you had a cost-benefit analysis of 5.2, or $5.20 return for every dollar invested.

The Victorian Government made a conscious decision not to tell Infrastructure Australia and the Abbott Government made a conscious decision not to ask. So they funded this through this don’t-tell-don’t-ask policy, this dud project, whilst not funding projects that we know stacked up.

Tony Abbott since then has insisted that the Victorian Government should break its promise or it will lose $3 billion in funding, when we actually know they took more than that off existing projects if you add up the Melbourne Metro, the M80 and Managed Motorways projects from the Victorian Government. So he wants to punish Victorian voters for voting Labor at the last election and electing Daniel Andrews as Premier.

This is in spite of the fact that Tony Abbott repeatedly told the House of Representatives and anyone who would listen that this state election was a referendum on the East-West Link. They are his words, not ours, and he needs to accept the outcome that was there.

This also draws attention to Tony Abbott’s approach to infrastructure. He promised that he’d be a builder. We haven’t seen any bulldozers, just bulldust – a series of re-announcements around the country, pretending that projects are new when they’re already under construction.

Even the Majura Parkway project, which every politician passes to and from the airport he pretended was somehow a new project. We’ve seen re-announcements, renaming of existing projects pretending that they’re new, reallocation of funds from public transport where every dollar has been removed,  public transport projects that stacked up to fund road projects to fund road projects that don’t.

It’s as simple as that. When it comes to infrastructure, his credibility has been obliterated by this fiasco around the East-West Link.

QUESTION: Have Victorians dodged a bullet?

ALBANESE: Victorians will have a look at this and say we knew there were problems because they wouldn’t release the business case. It’s not just Victoria where that’s happening. We haven’t seen the full business case for the Perth Freight Link project, for Westconnex, and that’s why you need this transparency.

You need transparency so the public can have confidence that taxpayer dollars are being used effectively. We created Infrastructure Australia to break the nexus between the short term political cycle and the long term infrastructure investment cycle. That’s why we funded all 15 Infrastructure Australia projects that were recommended.

This East-West Link was not recommended by Infrastructure Australia and this is a case study in what not to do. If you want to see what can go wrong – just have a look – academics will be studying this universities around Australia from next year into the future. If you want an example of what not to do with a project, this is it.

QUESTION: What do you expect to get out of the Auditor-General’s report, if in fact he goes ahead?

ALBANESE: It should go ahead. The Auditor-General has a responsibility in my view, to look at the use of taxpayer’s funds. The Auditor-General needs to have a look at what the Government’s policy is. The Government’s stated policy is two things.

One, that projects of value above $100 million need to be assessed by Infrastructure Australia and that there will be a published cost-benefit analysis. That didn’t occur.

Their other policy is that in order to avoid money being shovelled out, milestone payments need to be made upon the achievement of construction targets as a project is constructed.

If that is so, how is it that a billion and a half dollars was forwarded last financial year for a project the Stage 2 of which wasn’t due to commence for many years into the future? That is bad fiscal policy under any circumstances.

Under the circumstances when you’ve got a budget of broken promises, massive cuts to pensions, the ABC, the SBS, cuts to health, cuts to every dollar of public transport, why is it that all this was occurring but a billion and a half dollars could be found as an advance payment without any business case being presented for the East-West Link project?

QUESTION: What do you make of the 30-page summary on the Perth Freight Link and do you think what’s gone on with the East-West Link means it is now beholden on the Government to come forward with the full cost-benefit analysis?

ALBANESE: Absolutely. This is a summary. There’s a lesson here. If you have a look at the documentation from Victoria, what’s extraordinary is the explicit decisions being made to keep information from Infrastructure Australia, to keep information from the former federal government in which I was the minister.

Conscious decisions – minutes being taken saying don’t tell Anthony Albanese or Infrastructure Australia what we’ve found because then it will present issues with regard to funding. So we’ll just release what’s convenient without any of the work around it. What this shows is that the full business case for all projects has to be released.

With regard to Perth Freight Link they can’t even say what the toll will be on the project. So how can you have a cost-benefit analysis without knowing what your revenue stream will be from the toll that is anticipated to be put on that project?

I mean, when we asked about this, when this was funded in the May Budget, the parliamentary secretary in Western Australia said that there wasn’t any case or documentation worthy of any public scrutiny that they were in a position to release.

This came as surprise and this stands in stark contrast to projects like the Gateway WA Project, where proper cost-benefit analysis was done. We know what the benefit will be. It’s employing thousands of people in Perth and providing a real difference to Perth.

The Roe 8 project – this is just another example where they’ve just changed the name – the Roe 8 project has previously been considered by the government and it ended up that they walked away from it. So we need to know why it is that the business case has changed if it has. That’s why all the documentation needs to be released for this project.

QUESTION: inaudible (relating to gun laws and the Martin Place siege)

ALBANESE: At the heart of this is that we need to make sure that politics doesn’t get in the way of federal and state authorities making their investigations as is appropriate at a time like this. I don’t intend making any political points. I intend waiting until the proper investigations and the facts are known and then people can make an assessment and when they make that assessment it is very important that this be an issue that is above partisan politics.

QUESTION: What is your opinion?

ALBANESE: My opinion doesn’t matter. What matters is the opinion of experts. What matters is that people don’t just talk so they get a grab as part of a news bulletin. This is an enormous tragedy. I went and visited Martin Place yesterday as a citizen of Sydney and the outpouring of grief was quite extraordinary and my heart goes out to the two families that have been affected by the tragedy.

QUESTION: What do you make of Senator David Leyonhjelm’s comments about gun control?

ALBANESE:  I think he would have been well kept to take the previous advice I’ve just given. I heard him on radio this morning and why he chose this particular time to intervene so he gets a grab up and gets some publicity… I understand that minority parties need to sort of get themselves out there and get a bit of media coverage. But you know, he should really think about it and think about whether it is appropriate for him to be playing that card to try and get publicity. I am a supporter of gun laws in this country. I think that one of the things that John Howard did that I totally agree with was his response to the Port Arthur gun massacre. Australians know less guns means less victims.

QUESTION: What about George Christensen’s criticism of the hashtag I’ll ride with you?

ALBANESE: Well, George Christensen. You know, seriously. I’ll play at my own level, thanks.