Subjects: Infrastructure Australia audit; urban congestion, the need for Tony Abbott to fund public transport; refugees; polls
ANTHONY ALBANESE: Good morning and thanks for joining us. Today the Government has briefed newspapers on the updated National Audit of Infrastructure done by Infrastructure Australia. It follows the first National Audit of Australia’s Infrastructure that was published in 2008.
What this report does is show a worrying picture for the nation, a worrying picture, particularly for Australia’s cities. Our cities are where 4 out of every 5 Australians live and where 80 per cent of our Gross Domestic Product, our economic activity, is produced. And yet the Federal Government under Tony Abbott sees there no role for the national government or national leadership in cities or urban policy.
That’s why they abolished the Major Cities Unit and that’s why Tony Abbott has made the absurd position clear that there’ll be no investment in urban public transport under a government in which he leads.
This report shows that traffic congestion will cost the economy $53 billion by the year 2031. Demand for public transport will almost double over the next 20 years. And yet Tony Abbott cut the funding for the Cross River Rail project in Brisbane, cut the funding for the Melbourne Metro project in Melbourne cut funding for the Perth Rail Link to the airport and Perth Light Rail, and cut funding for a study for Hobart Light Rail in Tasmania.
Tony Abbott’s position is simply untenable and he should use this report, this evidence, to change his policy so that the Commonwealth engages with the states and territories in addressing urban congestion.
What the report makes clear is that to deal with urban congestion you need investment in rail and investment in road. Not only have you had cuts to public transport, but you’ve had cuts to road projects, including the M80 in Melbourne that was identified by Infrastructure Australia as producing a positive economic return, unlike the East West Link that Mr Abbott seems obsessed by that produces 45 cents return for every taxpayer dollar that is expended on it.
Mr Abbott today is in Tasmania and he got a question about the Midland Highway and his $400 million investment that he claims over ten years. Of course he has not put an additional dollar beyond that which was in the 2013 budget for the Midland Highway. Indeed he’s cut $100 million from the allocation that was made by the former Labor Government in the 2013 budget.
And of course if you go back and look at what Tony Abbott said repeatedly in Tasmania, in the Parliament and beyond he said $400 million is all you need to fully duplicate the Midland Highway.
We know that the real cost was over $1 billion dollars if you wanted to fully duplicate the Midland Highway. Just like his East West Link promise it was done without evidence, without making sure that he could actually deliver an outcome that he said he stood for.
Mr Abbott does not understand infrastructure; no investment in public transport, not dealing with road investment on the basis of proper analysis from Infrastructure Australia and, in the Budget from last week, he flagged a cut to Infrastructure Australia from $15 million per year funding to $8 million per year funding – cutting it essentially in half over the forward estimates so they won’t be able to give the same level of advice.
But what’s worse is that there were $2 billion dollars of cuts to Mr Abbott’s infrastructure budget from his own Budget last year over just a two year period. Cuts to the Heavy Vehicle Safety Program, cuts to the Bridges Renewal Program, cuts to road and rail projects right around the country.
Mr Abbott needs to use this report to change direction on infrastructure and he needs to do it quickly because the clock is ticking on lost productivity and lost time. That means a lot for the national economy but, importantly, it means increasingly working parents will spend more time travelling to and from work than they do at home with their kids. That’s why urban congestion is a social issue, not just an economic issue and that’s why it requires national leadership. Happy to take questions.
REPORTER: One of the projects that at least in Sydney has been suggested as a way of alleviating congestion, Westconnex, that is a project that has received federal funding but that your Party has, in the last state election campaigned against, so how do you explain that?
ALBANESE: No, what we’ve said is they need to get it right. At the moment if you can tell me where Westconnex comes out in the M4 or the M5 I’d be happy to answer a specific question about it. Anyone?
REPORTER: How do you propose to fund all the infrastructure that the country needs?
ALBANESE: Well what we’ve done is take it upon ourselves to invest in terms of public funding but also to promote private funding of infrastructure. We supported very strongly and, indeed I signed along with the NSW Government the agreement on the F3 to M2 that’s been renamed Northconnex, but the agreement was signed. $405 million from each level of government with private sector investment from TransUrban to make sure that that important project for Sydney can go ahead.
That’s a critical project. On Badgerys Creek airport, during the state election that we proposed, myself and Luke Foley promoted a plan, which would have seen value capture in terms of the railway line extension from Leppington up to the main Western Line so you have a rail loop around Sydney. You can capture that value that will occur with the building of an airport, with the jobs and economic activity that occurs there and that’s the sort of move that should happen.
Cross River Rail, the agreement with the Queensland Government had in it a private sector component. We had superannuation funds that were very interested in investing in infrastructure there. So there’s no doubt that it’s not going to be just public sector investment. There’s the need to mobilise private sector investment, in particular superannuation funds to make sure that we get good outcomes and there’s a natural fit between superannuation and investment in infrastructure. What do superannuants look for? They look for a steady rate of return over a long period of time. That is precisely what good investment in infrastructure in the right projects can deliver.
REPORTER: So you’re saying that private investment is the answer?
ALBANESE: No I’m saying that public sector investment is needed but the public sector won’t be able to do the entire job. Private sector investment, where appropriate, such as the F3 to M2 tunnel, that is now underway in New South Wales is a good example of how on a case by case basis, you look at what the problem is and what the solution is as well. And in that case it may well be that the $405 million contribution from Federal and State Governments, respectively, isn’t required to that level. But what that has done is underwrite the risk in the project by having that funding made available and that is a good example of the federal and state governments working constructively along in this case with TransUrban to make sure that a vital infrastructure project for Sydney is built.
The problem with Westconnex is that while we made funding available potentially as well, the design has to be got right. And on Westconnex up to this point it’s unclear in terms of exactly where it will come out, it’s unclear in terms of the fact that the business case has not been published and we need to make sure that we address these issues and get the right infrastructure so that the public can have confidence as well that the taxpayers’ dollars which are finite, go to the right place, because the need as this report shows is great indeed for investment.
REPORTER: You mentioned private sector investment, state funding, and you did say there’s a need for public sector investment from the federal government. Where do you get that money from for this investment?
ALBANESE: Well it’s a matter of priorities and the priorities in the Budget. When it comes to infrastructure, the important thing is here it’s not just a cost; it’s an investment that produces a return to government through higher productivity and higher revenues over a period of time.
That’s why you do the cost benefit analysis through Infrastructure Australia and get it right. That’s why you fund projects like the Hunter Expressway to the north of Sydney that had a cost benefit analysis of above three. Like the Mildura Parkway in the ACT/NSW that had a very strong cost benefit analysis there.
One of the silliest decisions of the Federal Government has been cutting the Managed Motorways program in Melbourne. The Monash Freeway; the Managed Motorways program, an investment allocated in the 2013 budget of, I think from memory it was $69 million or thereabouts in the federal budget, it had a cost benefit analysis of more than give, meaning for that investment every dollar that’s put in, $5 dollars would be returned in public benefit. They cut funding for that project and put money into the East-West Link at a ratio of 0.45.
That’s why in Bill Shorten’s Budget Response on the Thursday night he announced an enhancing of the role of Infrastructure Australia, making sure its decisions are respected. That’s why we funded all 15 projects out of 15 that were on the Infrastructure Australia priority list when we were in Government. You need to break the nexus between the political cycle which is short term and the infrastructure investment cycle which is long term.
REPORTER: In Sydney at least, the state government has committed money to what is looking like it’s going to be the most expensive light rail project in the world, just in the Sydney CBD, it’s also going to shut down the city for about three years. What do you have to say about that and the congestion that’s going to create?
ALBANESE: Well that’s an example of a proposition that I don’t believe has been considered by Infrastructure Australia. You need to make sure that you get the planning right and what should happen, if you have the planning right, then you won’t have politicians expected to comment on issues that are rightly the responsibility of engineers and planners.
And that’s why the Infrastructure Australia model is so important, and why it’s so disappointing that the current government has walked away from that process, has cut the funding of Infrastructure Australia. It didn’t even have a CEO of Infrastructure Australia for more than a year. It is good that today’s National Audit report is being released but let’s put it in perspective.
We were told that this audit report would be released last year before the Budget and it should have fed into this year’s Budget. But I guess there wasn’t a need for the Government to do that given they had not a single new major infrastructure project announced in this Budget.
For the first time in memory, those of you that have gone along to the Budget lockup know that every year there’s an infrastructure department booklet that goes through state by state what projects are being funded. This year they didn’t need to produce a booklet because they haven’t produced any new funding. Just cuts.
REPORTER: Have you seen the report?
ALBANESE: I was sent by Infrastructure Australia the embargoed release but I haven’t been sent the full report.
REPORTER: So where would you start then? Would you start with roads? Would you start with rail?
ALBANESE: You start with where the best productivity return is. It’s the wrong question, with respect. It’s the sort of question that people in Tony Abbott’s cabinet have asked which is why they’ve got it so wrong. It’s as wrong as the question, ‘do you start with moving passengers or moving freight?’
A city works together by moving passengers and moving freight and doing it on rail and road and light rail and with intermodal transport. You don’t have a preference for a particular mode because they all work together. If you have a public transport project that’s effective, it takes cars off the road.
The Regional Rail Link project in Victoria that will open next month – the largest ever Commonwealth investment in urban public transport has led to considerable new development around stations like Tarneit has meant that not just people from Western Melbourne but from Ballarat, Bendigo and Geelong can get into the city quicker by separating out the lines and it has meant less cars on the road. They are interrelated which is why Tony Abbott’s position is so absurd.
Similarly, the building of the Southern Sydney Freight Line here in Sydney meant that the previous circumstance, whereby at the Port of Botany the rail freight from the port, leaving the port to be distributed, often from right around Australia, stopped during the peak periods because you didn’t have a separation of passenger rail from freight rail. That’s one of the things that the Northern Sydney Freight Line is doing at the moment as well. You can’t view a project in isolation. It has to be viewed in terms of getting proper outcomes, and productivity benefits. There’s also a need to examine infrastructure in how it fits with employment, in how it fits with social infrastructure as well.
So Badgerys Creek airport isn’t just an airport; it’s got to be about a jobs growth for Western Sydney, it’s got to be how it fits with planning for Sydney. That’s why for example we supported, when in Government, the Parramatta to Epping Rail Link because it was about growing Parramatta as Sydney’s second CBD is absolutely vital. The light rail in Western Sydney, particularly going along north-south links, not just east-west is very important as well.
Thank you for the question because it’s enabled me to answer that, but I think that’s the problem. It’s the wrong question and any planner, any planner, anyone who has been involved in cities or urban policy will say exactly the same thing. So Tony Abbott’s position, which says essentially this: we should fund roads, but not rail because the state governments run rail. Well the state governments run the road system as well. It’s an absurd proposition that he has got himself into and he’s outlined ideologically in the book Battle Lines where he says to paraphrase, ‘there simply aren’t enough people who want to go from a particular destination to another particular destination at a particular time to warrant anything other than a car, and cars need roads.’ That’s an absurd proposition.
REPORTER: Mr Albanese, can I just ask you about the refugee issue. Do you think that Australia should accept-
ALBANESE: We might deal with infrastructure first, then I’m happy to take others.
REPORTER: We’re facing this dilemma because of our population growth. Do we need to look at population growth as an issue?
ALBANESE: One of the things that we do need to look at is how we take pressure off the capital cities in terms of regional cities and employment there as well. That’s one of the reasons the Major Cities Unit wasn’t a capital cities unit. It was a Major Cities Unit- looking at the growth of regional cities. Of course one of the things about increased population is that it can make dealing with issues of public transport easier. If you have the growth in terms of where densities are along transport corridors than it makes it certainly more and more viable and more and more important so that the public transport corridors to places like the Regional Rail Link or the Moreton Bay Rail Link in the northern suburbs of Brisbane, to Redcliffe, are very important in terms of growth.
What’s important in terms of urban congestion as well is that we have jobs closer to where people live. One of the things that the State of Australian Cities reports that used to be produced and the Government said would be produced last year, indeed they have a tender that shows that it was printed at least at the latest in December 2014, said they’d produce the State of Australian Cities report 2014 – it’s gone missing. We’ll be asking about that in Senate Estimates next week.
But the 2013 report, reported that as employment changes, the nature of it in our cities, you have a growth in the service sector, in the financial sector, legal advice, a growth in jobs in the CBDs of our capital cities. Less growth in jobs in terms of manufacturing that have tended to be around the outer suburbs. So the emergence increasingly of drive-in, drive-out suburbs where people can afford to live in a city like Sydney but there aren’t employment opportunities available.
We need to have a serious discussion about our cities. State governments and local government of course have a pre-eminent role in that. But I believe very strongly that there’s a role for the national government in those issues as well, because if you get it right, there’s no doubt increased population, brings with it increased economic growth and opportunity.
REPORTER: The NSW Roads Minister is probably dancing in the rain today because he says this is proof that he should get on and build Northconnex and Westconnex. Do you agree that that is what this audit states?
ALBANESE: In terms of Northconnex, I signed the agreement with the NSW Roads Minister in June 2013. We sat down – a jointly funded project, with the private sector and since then of course the federal government has renamed the project the F3-M2 ‘Northconnex’, but a new name doesn’t make it a new project. So there’s no doubt in terms of the cost-benefit analysis it stacks up.
There’s no doubt also that there’s a need to do something about the congestion on the M4 and the M5. There’s a need to make sure that they get the planning right to do the business case properly and to make sure it actually achieves the outcomes. The outcomes that were identified originally for that project were to deal with the port and to deal with the airport. At the moment the drafts that I’ve seen, and there have been a number of them, but the last 5 of the routes that I’ve seen don’t go to either the port or the airport.
REPORTER: On the refugee issue, do you want to see the government change its mind and accept some of the Rohingyas into Australia?
ALBANESE: Well, that’s not a decision for me. Those things are a decision for the government. I’d just say this: that Australia has a responsibility as do other countries in terms of our international obligations. There’s a reason why you have institutions such as the international Law of the Sea, which mean that we fulfil those obligations. We spend a lot of money for French sailors who are stranded. We are fulfilling our obligations with tens of millions of dollars being spent searching for the wreckage of the Malaysian plane.
I was disturbed, as were I think most Australians would be disturbed, by the idea that people, the Rohingyas, who have no doubt suffered persecution in Burma as a minority population, would be pushed around the oceans and left to die. That’s actually not what people do. There’s a reason why these international treaties have arisen – because we’ve learnt from history. Because humanity is better than that.
In terms of our obligations, we have no obligation other than to be a good regional citizen and one of the solutions that both this government and the former government say is required in terms of asylum seekers is regional solutions. So we should be prepared to engage with countries in our region and the federal government should certainly do that.
That’s what they’ve said they’re about when they’ve spoken about regional solutions. For people who’ve seen those people in the water, jumping in to get some food, this is a state of desperation.
REPORTER: The Prime Minister is saying that the government doesn’t want to get involved in this issue and bring some of them to Australia is because he believes it could send a wrong signal or the wrong message to people smugglers.
ALBANESE: That’s a decision for the Government. I’m not commenting on where people should go. But there’s a proposal for regional discussions about these issues, about this particular problem. There’s a particular problem there. You can’t pretend that it’s not there. You can’t shut your eyes to that issue. I’m of the view that every kid deserves humanity. Humanity has to come in here. It’s up to others to comment on whether Australia would play a particular role in terms of responsibility but we should at the very least be prepared to engage in the region about regional solutions. What we need is long term solutions that mean that people don’t get on boats. We are all against people smugglers. People smuggling is an evil trade. That doesn’t mean that people should, while the world is watching, die in the middle of a sea. The reason why we supported offshore processing was to stop people dying at sea. That’s my view. We should stop people dying at sea and it’s good that those countries have agreed that that won’t be allowed to happen, but for a few days there, it certainly looked problematic to say the least.
REPORTER: Those countries you’re talking about, Indonesia –
ALBANESE: With due respect, I’m not the Immigration Spokesperson.
REPORTER: But you’re saying what they can’t do –
ALBANESE: I’m not the Immigration Spokesperson and I’m not about to write our immigration policy here.
REPORTER: Can I ask you on another issue; Michael Costa said today that one of the main reasons –
ALBANESE: I’m not terribly interested in Michael Costa’s views. I wasn’t before. I’m not particularly interested now.
REPORTER: How about if I put the proposition to you that –
ALBANESE: What does Andrew Bolt think, or –
REPORTER: No, is Bill Shorten unable to cut through at the moment because he is pandering to Greens voters?
ALBANESE: Absolute nonsense.
REPORTER: So the focus groups talking about Bill Shorten and how he wasn’t cutting through, are they nonsense too?
ALBANESE: Well, you have a look at what the issues are and how they’ve been raised. Did Bill Shorten cut through about health cuts and changes to Medicare? I reckon he did. Did Bill Shorten cut through about the need to not have $100,000 degrees? I think he did. Did Bill Shorten cut through about the indexation of pensions being changed so that there was a real cut in pensions over a period of time? I think he did. Is Bill Shorten cutting through about the need for investment in public transport and taking the Infrastructure Australia process seriously? I think he is. Is Bill Shorten cutting through on the need for a national government to show leadership on cities? I think he is.
REPORTER: So we’re not going to see a Labor Party led by Anthony Albanese?
ALBANESE: We have a Leader. That Leader is Bill Shorten. Bill Shorten has held the Government to account to the point whereby if you look at the Government’s narrative it has changed from now to earlier this year, to last year’s Budget. It’s all over the shop. No wonder that Australians are confused about the economic message. And I’ll say this about leadership instability. Earlier this year there was a vote in the Liberal Party room between Tony Abbott and a chair not unlike this one here. An empty chair. 39 people voted for the empty chair rather than Tony Abbott.
Thanks very much.