Subjects: Infrastructure Australia, public transport, Budget 2017
TIM SHAW: I’m pleased to say Anthony Albanese’s on the line. Anthony, good morning.
ANTHONY ALBANESE: Good morning Tim.
SHAW: Why has it taken them three years to wake up to the fact that infrastructure investment is good for the economy?
ALBANESE: Well, I think they’re a victim of their own rhetoric. They carried on and on and on about the so-called debt issues without looking at where it had come from and without recognising the importance of investing in nation-building infrastructure. They came to office and cut funds for important projects that have been recommended by Infrastructure Australia like the Melbourne Metro and Brisbane’s Cross River Rail project.
They funded some projects that didn’t stack up, that haven’t gone ahead like Perth Freight Link road project and Melbourne’s East-West project and that meant that you’ve had this drop off. You had a 20 per cent decline in public sector infrastructure investment in their first two years. for every single quarter that they’ve been in government, public sector infrastructure investment according to the Australian Bureau of Statistics investment has been lower than all 21 quarters when Labor was in office after our first Budget.
So it is better late than never. There is a distinction to be drawn between productivity boosting infrastructure that boosts, of course future revenue to the government because it boosts economic growth. It creates jobs in the short term and boosts growth in the long term.
SHAW: So ultimately Labor is welcoming Scott Morrison’s comments on infrastructure investment.
ALBANESE: He’s got half of it. That’s the first half. The second half though, and what’s of real concern is you need to invest in the right projects and that’s what the Reserve Bank Governor and economists have said.
To do that, we established Infrastructure Australia. Now the government has supported its continuing, but they’re not listening to it. They’re not following its recommendations. If it’s just for pork-barreling exercises then it doesn’t work.
It doesn’t produce those returns to government and of real concern is that in the lead up to the Budget, they’re establishing an infrastructure financing unit, but not within Infrastructure Australia. So they’re not getting that independent advice, that objective analysis of what a particular project’s impact would be on the economy, getting the advice about financing of projects from Infrastructure Australia.
They’re in fact cutting Infrastructure Australia’s budget and at the same time establishing this little unit in the Department of Prime Minister and Cabinet. So they’re sidelining not just Infrastructure Australia but their own Department from getting that proper advice about projects going forward.
So the test for the government is; are they going to fund the Cross River Rail project in Brisbane? It was recommended by Infrastructure Australia in 2012 and funded in 2013 and then cut in 2014. Are they going to fund the Melbourne Metro project? Are they going to fund Metronet in Perth, the expansion of the rail network?
The great benefit of Infrastructure Australia can be in Canberra with a project like the Majura Parkway. The Majura Parkway which was $144 million from each level of government, from the ACT Government under Katy Gallagher, and the Federal Labor Government. That had been around for a while. It had a benefit-cost ratio above 3, so more than $3 return for every $1 invested.
But frankly there weren’t a lot of votes in it because it didn’t go through a marginal seat. It was about freight, taking it out of the Canberra city area. But it wasn’t a sexy project, if you like. So it hadn’t been funded. But Infrastructure Australia recommended it. It was therefore then funded, because we funded all 15 of the priority projects that Infrastructure Australia identified.
So the key for the government, and the test in the Budget, is are they funding those projects that previously they’ve cut, so that the funding goes towards boosting economic productivity rather than being determined by politics, essentially?
SHAW: Wouldn’t you love a lovely set of numbers that Gladys Berejiklian’s got in New South Wales? You’re a federal member in New South Wales. Their Budget looks a hell of a lot healthier than Scott Morrison’s. They’re investing in major infrastructure. What’s your message to Scott Morrison today? Does he need to look closely at the great example in New South Wales and adopt it federally?
ALBANESE: He needs to put Infrastructure Australia, an independent body that was established under the former government but kept by this government, front and centre and not sideline it. Here’s a saving for him; don’t set up a separate unit in PM&C to do exactly what Infrastructure Australia is supposed to do. Take the money that’s been set aside – one would assume – for this unit, give it to Infrastructure Australia, beef it up, so that the public can have confidence that the right projects are being funded.
SHAW: Always a pleasure, thank you for your time this morning.
ALBANESE: Great to talk to you, Tim.
SHAW: Thank you, Anthony Albanese. Shadow Minister for Infrastructure, Transport, Cities, Regional Development and Tourism.
Leader of the Australian Labor Party, MP for Grayndler, Rabbitohs Life Member. Authorised by Anthony Albanese, ALP, Canberra.