Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The Infrastructure Australia Bill 2008 creates Infrastructure Australia, a statutory authority within the infrastructure, transport, regional development and local government portfolio, with members drawn from the various levels of government and industry. It will have functions that include auditing Australia’s national infrastructure and considering current and future infrastructure requirements. This new body was promised by Labor during the election campaign on the pretext that it will improve the national infrastructure planning process and advise government and private stakeholders on infrastructure issues.

Good infrastructure is the veins through which the lifeblood of the economy flows. Good road, rail, shipping, telecommunications and other infrastructure is essential to keep our country strong. Infrastructure is vital to exports, to imports, to industry and to commerce; but it also is critical for our day-to-day activities and the enjoyment of our environment. Traditionally most infrastructure has been a state responsibility, and that has led to its own series of issues—different rail gauges, different traffic rules, different priorities and standards, and certainly different outcomes. Over recent years the federal government has sought to take a leadership role to help try and standardise the laws and deliver better cooperation between the states. Some issues, like the rail gauge, will be very difficult to resolve, but some progress has been made and some barriers which made it difficult to do business when industry crosses borders have been broken down.

In addition, the federal government now provides significant funding for the first time for infrastructure projects—for example, rail funding, particularly through the establishment of the ARTC, which has done an excellent job in helping to develop a national rail network for the first time in this country. The previous federal government developed and funded AusLink, which provides—for the first time again—a significant financial contribution from the federal government towards the national road system. But the previous government also worked at a local level, through very successful programs like Roads to Recovery, to help ensure that local roads and streets are also improved and become part of a national infrastructure plan. The federal government made strategic contributions at a national level to important projects which, although not on the national highway or the national railway, are nonetheless vital to ensure the progress of commerce and industry in a particular region.

And there is no doubt at all that the Australian government’s involvement over the years now has made a difference. There have been significant advances. On the other hand, it has been disappointing to note that the more money the Australian government has put into infrastructure development, it seems, the less the states have chosen to provide. States have pulled back on expenditure, when in fact they should have been encouraged by the Commonwealth investment to do more. Instead, when they see a project of importance, the states tend to demand that the federal government pay, rather than recognising that their revenue flows are sufficient to cover many of the vital infrastructure projects that are particularly a state responsibility. Many of them have sought to avoid their share when a project has had a shared responsibility. They have cut back also on their support for local government, which has meant that local roads have not had the full benefit of the Roads to Recovery program because, in the end, local government has had to raise additional funds to cover for the state Labor governments withdrawing financial assistance to them. It is disappointing that the states have, almost without exception, responded to the generosity of the federal government over the last decade or more by cutting back their own contributions. So the real benefit of some of this federal investment has not been seen at the local level.

In addition, project management by the states of the infrastructure funded by the federal government has been poor—in some cases, frankly, disgraceful. The states have so run down their capacity to manage projects that rarely is any new infrastructure scheme completed on time or on budget. Indeed, it is not uncommon for federal funding to sit in state treasuries for years, eroding away while the states get around to finally drawing up the plans and getting on with the project. Almost always, after a project is announced, there is a massive build-up in the costs between the time of the announcement and when the project actually begins. As a result of that, particularly under programs like AusLink, projects have had to be deferred to fund the cost overruns on the ones that have already been announced. Projects are being deferred because the cost has gone up, and the cost has gone up because the state simply has not got on with the job of building the road. There are many disgraceful examples of projects—to deal with traffic congestion or with flooded roads, for example—for which the federal government has actually already provided the funding but the project has not yet begun. That demonstrates a disappointing decline in the capabilities of state governments around Australia to deliver projects.

I know that, in a strong and robust economy such as Australia has enjoyed now for some time, quality people, quality managers, are in demand in the private sector. Many are attracted to the mining industries and to infrastructure projects funded and developed by the private sector. That has meant that the states have lost a lot of their talent. In many cases there has also been fundamental incompetence at a political level in the state governments. There is an inability to make decisions, there is corruption in some states and the decision-making processes inevitably take years and years.

In the 2005 budget, for example, the federal coalition government provided grants to the states for a wide range of road projects. Those projects could only be funded because the states gave an assurance that they were ready to start. The funds were provided immediately in that financial year. Money was paid in lump sums to the states—an issue that the Auditor-General commented about subsequently. But, sadly, some of that money is still sitting in state treasuries today, even though the states promised that these projects were ready to go and could be funded under the rules that applied to Commonwealth-state funding. The projects simply have not been built. There are people waiting at flood crossings in North Queensland that should have been fixed by now. The money is sitting in a state treasury, eroding away. There are so many stories of this order, about projects that should have been funded and still to this day are not built.

There have also been clear examples of poor or no planning at state level. The Pacific Highway was a classic case of there being not only no funding provided to build this vital piece of road but no corridor identified for the new road network. So when some money becomes available you have to go back to the very basics and try to identify a suitable route for the road. In my own electorate, the Cooroy to Curra bypass is an essential piece of infrastructure and yet no corridor has been developed to this day. At this stage that road should be under construction.

There has been a failure of planning at the local level by the various state governments. When the planning starts, it is often inept, the community consultation process is flawed and it inevitably takes forever and there is no genuine listening when it comes to identifying new transport corridors. We all know that these issues are always contentious. No-one wants a four-lane highway going past their property. They all want the four-lane highway because they want to get somewhere else, but they do not want it in their own yard. So it is always going to be difficult and trying for governments and others associated with identifying a suitable corridor and then putting the planning into place. That simply has not been happening strongly enough at state level over the years.

The final point I want to make in relation to the role of the state governments in developing and providing road infrastructure is about the poor quality of workmanship that is often delivered, particularly by state owned road construction authorities. I have been appalled to see many road projects fail within months of construction—projects that have never been quality jobs right from the beginning and have failed again and again. Many of the states under the funding arrangements actually have an incentive not to do the job properly. They are expected to contribute towards maintenance but, if the whole road packs it in, they expect the Commonwealth to go in and fund the reconstruction. As a result of this, there has been no incentive for the states, which have a responsibility for managing a lot of the national infrastructure, to do the job properly. States have certainly not done their job when it comes to planning, constructing and funding the road system of our nation.

The states have also failed in relation to rail. It is a national disgrace that rail continues to lose market share. Freight shifts on to road all the time. In many cases states have given up on their rail system. Queensland Rail owns more trucks than trains. If you take freight to your local train depot, it is almost certainly going to be carried by truck to its destination. If the state governments who own this rail system have given up on its competitiveness and effectiveness, why would anybody else have any confidence in using trains? The reality is that our national transport task is going to double by 2025. If rail does not do much, much better, we will have so many extra trucks on the road that the road system will simply not cope. Even if train doubles its contribution to the transport task, we will still have twice as many trucks on the road, and that is unacceptable. Trains and the rail system must do much, much better.

I am concerned that the states have lost confidence in their rail system. They are allowing the branch networks to deteriorate and are not prepared to put in the investment that is necessary to ensure that we have quality rail around the country. Even in states where the rail system is underpinned by large-scale commodity movements, a failure to invest has meant that that infrastructure has deteriorated over the last decade or two. The classic case has been the disappointing performance of Australia’s coal exports over the last couple of years. At a time when the world wants our coal, prices are at record levels and there is enormous capacity to sell Australian coal around the world, our trains and ports have been unable to deliver. That has been a national disgrace and an embarrassment. We have to say to people that they cannot get the coal that they want because we cannot deliver it. We have all seen the television pictures of 30, 40, 50 or 60 ships lined up at a port unable to come in and take on cargo, because the port facilities are inadequate and the rail facilities to get it there are inadequate. Infrastructure failures have damaged our growth and our quality of life over the years. We have not achieved maximum value for the enormous investment that the previous federal government put into infrastructure development because of the difficulty of engaging the states in delivering the projects more effectively.

Part of Labor’s answer to this problem is to establish Infrastructure Australia. However, this particular body is unlikely to be able to make much impact on delivering infrastructure services in an efficient and effective way. Currently Labor is worried about the inflationary effect of bottlenecks in our infrastructure, and dealing with that is one of the points in its five-point plan to address inflation. Of course, fixing infrastructure is important, and I have just, I think very strongly, made the case for undertaking infrastructure investment. But spending more money on infrastructure is not going to make any positive contribution to inflation for a decade or more. It takes a long time to build the roads, fix up the ports and get the shipping systems working properly. And, in the short term, spending more money on infrastructure is actually likely to be inflationary rather than to reduce inflation. We do need to spend the money on infrastructure, but to suggest that this is a relevant part of a five-point plan to address inflation just demonstrates how economically illiterate the government is.

Labor is complaining about the policy challenges of handling success—an economy that is booming and providing historically high opportunities for young Australians to participate in the workforce. This economy is, of course, the result of the competent economic management of the previous government. The five-point plan will do nothing to improve the pressures of inflation in Australia. While some of the ideas are worth while and need to be done, they are not part of a plan that will ease the pressure of inflation on Australian working families today, next month, next year or even in five years time. For that reason, Labor needs to develop a genuine capacity to manage the economy if it is to earn any confidence from Australian business and the Australian community for its economic management.

By 2012-13, the export value of Australia’s commodities will have grown by 34 per cent. Similarly, the export earnings from Australia’s energy commodities are forecast to increase by 51 per cent. Farm commodity exports are expected to rise from $26.7 billion in 2007-08 to $31 billion in 2008-09, an increase of 18 per cent. So we do need to continue the investment in infrastructure.

Labor is wrong to say that there was no national planning framework for infrastructure under the previous government. AusLink was established by the former coalition government in 2004 and represented the most significant change since Federation in the way we tackled the national transport task. AusLink was a comprehensive planning arrangement that covered both road and rail and involved both the Commonwealth and the states. Under AusLink, jurisdictions were able to develop long-term strategies for key major transport corridors, to rate projects according to merit and to give ample lead time to the private sector. Industry knew the program years ahead and was therefore able to plan for it. The reality is that AusLink did develop a national planning framework for road and rail. The state governments, which are all Labor, were involved in that planning process and in the choice of projects.

Labor should also be aware of the entity called the Council of Australian Governments. We have heard a lot about it since the election of the Rudd government. They should also therefore know that in June 2005 COAG agreed that each state and territory should prepare an infrastructure report every five years and that the first of those reports was to be completed by January this year. Presumably they are sitting on the minister’s desk, so he already has an audit of each state’s infrastructure needs. He has a report on their progress in meeting those challenges. So what is Infrastructure Australia going to do that is not already being done under the current AusLink process? It is not the first national planning framework. We already had that in place for some years and it involved federal and state governments with an overview from COAG. Bureaucrat Prime Minister Rudd is now building a new $20 million bureaucracy to do a similar task.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member will refer to the Prime Minister by his appropriate title.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The planning process exists and Infrastructure Australia runs the risk of being just another bureaucratic creation completing a task that is already done. I return to a number of the other Labor comments about the previous government and our infrastructure investment. Under the first AusLink program, 2004-05 to 2008-09, the coalition government provided $15.8 billion in funding for land transport infrastructure. Under AusLink 2, the previous government were to invest $22.3 billion in the Australian land transport system. We actually went further than that during the election campaign, putting another $3 billion to $5 billion towards our commitments for roads. That would have been the largest investment in land transport infrastructure ever made by an Australian government. The reality is that Australia has been spending significantly on its infrastructure. It is not as good as we would like and it will require constant investment year in year out, but we have been able to provide infrastructure that has underpinned a world-class economic performance.

A second point of importance is that the previous government had an infrastructure planning framework. Claims by Labor that we did not are wrong. Labor also claim that the former coalition government did not take infrastructure challenges seriously. That is also wrong. The records show that the former coalition government under AusLink had spent more than any other government on infrastructure programs. Indeed, it is interesting to note that, in spite of the fact that the government say that infrastructure expenditure is a part of their five-point plan to tackle inflation, they actually plan to spend less on roads and rail and infrastructure than the previous coalition government spent. They are cutting the funding, not increasing it, which further undermines the credibility of their claims. As an example, we have already seen Labor scrap the F3 to Branxton link road. Many of you will recall the comments of the federal transport minister in this place that this critically important road to remove bottlenecks around the Newcastle and Hunter Valley area did not add up. This statement was astonishing given that the member for Hunter, who is now the Minister for Defence, had promised before the election that a Rudd Labor government would absolutely match the coalition’s commitment of $780 million for the link road. This broken promise is a devastating blow to the people of the Hunter and makes a mockery of Labor’s claims that it is determined to fix infrastructure bottlenecks as part of its anti-infla-tionary strategy.

The Rudd Labor government has also delayed funding of $65 million for critical rail maintenance in regional Australia. You may recall the misleading statement made in this place by the federal transport minister that pushing the funding back to 2009-10 related only to the inland rail proposal. That was wrong. Treasury papers show that $65 million of this money was to be used by the Australian Rail Track Corporation for maintenance and upgrading of a number of existing rail lines that could contribute to a future inland rail corridor. They have also taken $500 million off the promised funding of the Cooroy to Curra section of the Bruce Highway—the worst accident stretch in the state and lowest ranked road in the whole of Queensland. Under Labor’s timetable for the upgrading of this accident stretch, which has already had 34 fatal accidents in the last five years and another two or three in recent days, it will be 2070 before the four laning of this high-priority section is completed.

The Labor government are slashing funding for road and rail lines which are already operating and allowing products to be moved up and down the eastern states. I also observe the failure of federal Labor to prod their state counterparts into completing the projects for which funding has already been provided. These bottlenecks mean that funds already offered are simply not being spent and therefore the cost blow-outs will eventually be met by federal taxpayers. As always, when Labor say something you have really got to look at their deeds, not their words. If they were truly determined to remove infrastructure bottlenecks as part of a strategy for fighting inflation, they would not be making these kinds of decisions to cut projects and to slash road expenditure; they would in fact be increasing it.

In relation to Infrastructure Australia, there are a number of issues which I think need to be addressed. Federal Labor are on record as saying, and I refer to the member for Batman’s comments on 18 July last year at the Australian Rail Summit 2007 in Sydney, that they are absolutely committed to the retention of all AusLink programs. So Labor are committed to supporting the $15.8 billion to be spent on inland transport infrastructure over the five years to 2008-09 under AusLink1 and the $22.3 billion worth of land transport investments under AusLink2 from 2009 to 2013-14. Labor have also said that all of their election promises will be honoured. But they spent the whole of that $22.3 billion during the election campaign on their promises, so I ask: what is Infrastructure Australia going to do between now and 2014 while we are waiting for new funding to be made available? Infrastructure Australia is not going to be allowed to reassess Labor’s election promises, so in fact there will be no money available for new projects and new investments in infrastructure until 2014. So why are we setting up a $20 million bureaucratic body when it will have no money to spend and no projects to prioritise? Is it going to work between now and then just on developing the next list of AusLink3 projects for funding or is it going to fill some other kind of bureaucratic process which delays projects rather than advances them?

We already have the infrastructure reports. They should be on the minister’s table and therefore he should know now what projects need to be funded and what the priorities are. Infrastructure Australia’s first task, we are told, is going to be a 12-month review. I hope that review is not just a vehicle for Labor, both at the federal and state levels, to simply duck the hard decisions and provide a convenient excuse to delay expenditure on very important infrastructure projects. I also hope that the function of Infrastructure Australia to evaluate proposals for investment in nationally significant infrastructure does not become a bureaucratic hurdle for the private sector to overcome when it is proposing projects, which already have to go through a very complex and involved approval process.

The opposition will move some amendments to this bill to try to improve its operation. I note that the bill as it is currently drafted stipulates that Infrastructure Australia may only evaluate infrastructure proposals on advice from the minister. Therefore it is unable, as I said earlier, to independently consider, for example, the ALP’s infrastructure election promises. If this is to be an independent body to assess where the money needs to be spent on the highest priority projects, why can’t it look at what Labor has already promised—particularly since Labor has spent every cent that will be available between now and 2014? It is a rather restrictive component of the legislation that significantly constrains the capacity of Infrastructure Australia to engage in reviews of its own volition. I for one would welcome an independent analysis of the rigour and appropriateness of Labor’s election promises, and I am disappointed that Infrastructure Australia will not be able to undertake this task.

I also note that the minister may give directions to Infrastructure Australia without reference to parliament. I think that, in the interests of transparency, directions by the minister to Infrastructure Australia should be tabled in each house rather than be buried, as currently proposed, in the annual report of Infrastructure Australia. I also think that the minister, when making appointments to Infrastructure Australia, particularly the appointment of infrastructure coordinator, should be compelled at the very least to consult the members of Infrastructure Australia before making such appointments. The last thing we want to see is Labor using Infrastructure Australia as a vehicle for handing out jobs to its mates. They have already announced that Sir Rod Eddington is to be the chair of this new body, so we have got the chair announced before we have even got in parliament the legislation to set the organisation up. That is hardly a logical process. I know they owe Sir Rod quite a deal. They humiliated him before the previous election by appointing him to a business consultancy role and then making all the decisions without even speaking to him, so this is obviously some kind of an apology get-square by the government for Sir Rod. It is an embarrassment to Sir Rod that he was treated so badly by Labor, and I am surprised that he has accepted this kind of post from a government that obviously values his advice so poorly.

I will be moving some technical amendments to rectify many of these weaknesses in the bill. We will not be opposing the establishment of Infrastructure Australia but we do want it to work better and we want to place on record our firm rebuttal of Labor’s attempt to rewrite history in relation to the provision of infrastructure over recent years. The previous government has a proud record of investment in Australian infrastructure needs. We do need to have a strong planning framework and there was one in place. I presume that will continue with AusLink but there will be a second planning process. There will be a bureaucratic creation that will make the rollout of national infrastructure, I suspect, harder rather than easier. So while we wonder whether this bureaucratic entity will in fact provide significant advantages for Australia, we do believe it is important to have a clear process for planning and investment in the nation’s infrastructure. This bill will be useless unless the Australian government adds the funding that will be necessary to upgrade the roads, the rail and the ports that are so essential to keep the Australian economy strong in the years ahead. (Time expired)

Debate (on motion by Ms Kate Ellis) adjourned.