Wednesday, 25 October 2017
Nation-building Funds Repeal (National Disability Insurance Scheme Funding) Bill 2017; Second Reading
This is the second occasion on which the government has attempted to abolish the Building Australia Fund. The Building Australia Fund was established in 2008 as part of one of the first pieces of legislation of the Rudd Labor government. It was established in partnership with the establishment of Infrastructure Australia, and it was a key part of our approach when in government to nation building. The plan was pretty simple: to break the nexus between the infrastructure investment cycle, which by definition is long term, and the short-term nature of our political cycle, which in this country varies between three years and four years.
We also consulted extensively in the lead-up to the 2007 election—and we will celebrate the Labor victory in just a short period of time—with stakeholders. They all said, 'You need to break that nexus, and the second thing you need is a pipeline of projects.' So we established Infrastructure Australia, which conducted Australia's first ever audit of national infrastructure needs. Infrastructure Australia identified priority projects based upon the categories of 'projects that were ready to proceed' and 'projects that required more work but showed promise'. It was the first ever serious attempt in this nation to have the long-term planning that is needed if we are truly going to deliver on reducing the infrastructure deficit.
In the 2008 budget, we put initial funding into three funds—the Building Australia Fund, the Education Investment Fund and the Health Infrastructure Fund—to provide that long-term approach to the planning of our hospitals, our tertiary institutions and, through the Building Australia Fund, our roads, public transport, ports and airports. With the Building Australia Fund, it was there in the legislation that you could only have funds expended if Infrastructure Australia had identified the project as a priority project. We need to remove the politics from infrastructure investment, which, for too long, has seen the electoral map rather than business cases and productivity benefit determining where funds go for infrastructure.
The Building Australia Fund made some substantial investments. I note that last night in Senate estimates the new head of the Department of Infrastructure and Regional Development, Steven Kennedy, identified the Gold Coast light rail project as being an example of value capture working in practice there. It's an investment of some $365 million by the Commonwealth government, in partnership with commitments from the Queensland Labor government, then led by Anna Bligh, and the Gold Coast city council working with the private sector to deliver a project that has been an enormous success. It was opposed by the member for Moncrieff and by the state LNP, but it was delivered as a result of our determination.
It has transformed the Gold Coast for residents, who, for the first time, have an efficient public transport network that can move large numbers of people in short periods of time. It's being extended to meet up with the heavy rail line coming down from Brisbane, and should be extended to the south to connect up with the Gold Coast Airport. Potentially, there are also proposals to extend the network into the Tweed. But it's been particularly important for an economy that depends very much on tourism to drive jobs and economic development. And people have literally voted with their feet by walking onto that light rail infrastructure.
We funded, through the Building Australia Fund, the Regional Rail Link, which has transformed the linkages between Melbourne, Geelong, Ballarat, and Bendigo. It's a project that had an allocation of some $3.225 billion by the Commonwealth government—the largest ever investment by any federal government in a public transport project in our history since Federation. Some of the Johnny- and Mary-come-latelies have pretended that this government had something to do with it, but of course at the time they opposed the creation of Infrastructure Australia and the Building Australia Fund. They were happy to go to the openings of these projects, but they opposed them. And today this legislation, seeking to abolish the Building Australia Fund, shows that they haven't changed their attitude towards nation-building infrastructure.
The new stations along that route, at Tarneit and Wyndham Vale, have transformed those outer suburban communities in Melbourne. This is a great example of what is spoken about a lot by anyone with an interest in our cities and urban policy—that is, making sure that the infrastructure is there first, before the population, and that the infrastructure helps make sure that we don't just open up new land areas and then think after the fact about what to do about transport, school infrastructure and health infrastructure. Good planning requires those transport connections so that people can connect with jobs and their economic communities. That is why the approach of this government is wrong. I say to this government: don't just put out media releases attempting to claim support for projects that the government opposed at the time; actually have a think about the long-term needs of this nation.
To the government's credit, they have changed their attitude towards Infrastructure Australia. They have maintained Infrastructure Australia as an organisation. To their discredit, they've sidelined it. Here, in the abolition of the Building Australia Fund that is proposed with this legislation, they are seeking to essentially gut it when it comes to having any active role in prioritising government expenditure and determining where it should go. The Building Australia Fund was absolutely critical in identifying the roads and public transport needs that are required—projects like the M80 outer ring-road in Melbourne. It was delivered by federal Labor and, when they came into office, the government cut the funds of $500 million. To be fair, they put some of those funds back and pretended it was new money, after 2½ years of delay on that M80 project. If you look right around the country at the needs that were identified, through Infrastructure Australia we funded all 15 priority projects that were identified. An example is the Goodwood and Torrens rail project in South Australia, a freight project critical for improving productivity in Adelaide and for South Australia.
You don't actually have to go that far to see the benefit of the approach. Indeed, I suggest to honourable members that, as they pass under the underpass on the way to the airport, when they leave this fine city tomorrow, they have a think about the Majura Parkway, which is there. The Majura Parkway and the Hunter Expressway were both projects that were on the planning agenda for a very long time. The Majura Parkway was funded through a joint, fifty-fifty contribution—the total cost being in the order of $280 million, from memory—by the Commonwealth and by the government of the ACT, at that time led by now Senator Katy Gallagher. It was a project which I think it's fair to say probably didn't change too many votes. It is in Canberra, so, when it comes to Labor and Liberal and where the margins go, it probably didn't change too many votes. The big benefit of the Majura Parkway is that it prevents the need for trucks to go through the middle of Canberra and takes them around the city. It was one of those projects that, frankly, was a no-brainer, but it hadn't happened. Infrastructure Australia's analysis showed a very positive BCR of multiple dollars returned for every dollar that was invested. The creation of the Building Australia Fund meant that that project became a reality.
The Hunter Expressway, similarly, was in planning for a long period of time. I remember having a discussion with someone who said, 'Oh, but that doesn't go through any marginal seats.' 'Why did you fund that?' said a member of the coalition. We funded it because it had an enormous BCR of greater than three to one. It cost more than $1.7 billion, $1.5 billion of which was investment from the Commonwealth. It created thousands of jobs. It reduced the travelling time for tourists visiting the Hunter Valley. It reduced travelling time for farmers and people who live in the New England region travelling up there. It saved lives by taking people off congested roads. It increased productivity by reducing travelling times between Maitland and the Newcastle CBD. It opened up to development the suburbs in between Lake Macquarie and Cessnock along the route, and it made possible the development of new communities and new residents; therefore putting downward pressure on house prices and increasing housing affordability. It created thousands of jobs in construction. Again, this was because of Infrastructure Australia's support and because of the existence of the Building Australia Fund, which this government, through this legislation, is seeking to abolish.
Right around the country there are examples of projects that were done. There was the Noarlunga to Seaford rail line in Adelaide, an extension and electrification of that line that opened up access, through public transport, from those southern suburbs in the electorate so ably represented by the member for Kingston. It opened that up, again taking cars off the road, reducing congestion and having good outcomes in terms of road safety.
That was our approach in government: doubling the roads budget; increasing the rail budget by more than 10 times; investing more in public transport projects than all previous governments combined, from Federation right through to 2007. In just six years, there was more investment than in the previous 107 years when it came to public transport.
And what happened? The Abbott government came to office and immediately removed the funding that had been allocated for any public transport project that wasn't already under construction. So there were projects like the Cross River Rail, identified by Infrastructure Australia in 2012 as its No. 1 priority. It would have been of great benefit to not just the people of Brisbane but the people of the Sunshine Coast and the Gold Coast, by increasing the capacity of the entire rail network by providing that second crossing over the Brisbane River. The $715 million allocated in the 2013 budget was cut by this government.
The Melbourne Metro was approved by Infrastructure Australia and funded in the 2013 budget with $3 billion of investment. It was supported by the business community and residents as a vital project for Melbourne and for Victoria. Again, it was about increasing the capacity of the rail network. We even established a board with the coalition government in Victoria which had representation of the federal department of infrastructure, on a similar model to the board that was established to deliver the Regional Rail Link, which was delivered under budget and under time. And yet that money was taken out of the budget as well. The government took the money that had been allocated to projects—not just public transport projects but road projects like the M80, as well—including $500 million that had been allocated for public transport projects in Perth, and they funded projects that hadn't been through Infrastructure Australia and didn't have a business case. The infamous East West Link in Melbourne had a business case of 0.45, or a 45c return for every dollar invested. I say the offer's still there to members of the coalition from the time they made that decision: if they give me $100 today, I guarantee to give them back $45 down the track, because they reckon that's a good deal. That offer is there if that's what they think is appropriate.
They then of course funded the WestConnex project in Sydney, which is still undertaking its EIS processes. They're still not sure where it's going. They've started building the tunnel; they're just not sure where the tunnel will come up. A project which began with a cost of $10 billion is now up to $17 billion. It began as a project where we provided $25 million to assist with proper planning to make sure of the problem that was identified by Infrastructure New South Wales, which was: how do you get freight from the port through the M5? How do you deal with that No. 1 issue for Sydney and New South Wales that was identified by the committee chaired by former Premier Nick Greiner? And the CEO, of course, was Paul Broad, who's now in charge of Snowy Hydro. It says it all that those two senior people both left. I think it casts their view on the New South Wales government's performance when it came to doing proper planning for its infrastructure.
What we now know with WestConnex is that, because of the current design, all of the federal funding—the whole $1.5 billion—has been expended as advance payments. In the first budget the money was paid in June 2014 for both East West Link and WestConnex. They were advance payments with no milestones being met and no planning. It was just 'here's some money for your bank account', against all of the recommendations. Everything that the government said—that they would only approve projects of any value above $100 million if they had been approved by Infrastructure Australia and they had a positive business case—all that went out the window in their first budget.
Of course, now, because the WestConnex project doesn't actually go to the port, the airport or the city, it is proposing to have another extension for the F6 down into the St George area—but not all the way through, because they can't work out how to do that—at an enormous cost. Certainty it will end up costing more than a billion dollars. They need a gateway project, which is unfunded by anyone at this stage, to actually get from St Peters to the airport and to the port. They're talking about a northern tunnel from the Rozelle interchange and another tunnel across the harbour because, when the cars come up at the Rozelle interchange, they'll hit the Anzac Bridge and have nowhere to go. This is a case in point that will be studied by students and academics for decades to come. It is why planning should be done before the project commences, not during. You don't plan it, you don't make it up, as you're going along, but that is what is happening.
At the same time, of course, we know the existing M4, which the people of Western Sydney had already paid for with tolls, has had a toll put back on it with not one extra metre able to be driven. On the existing road with a couple of new lanes there is a toll that's substantial. And that is causing some real concerns as well for equity, because, depending upon where you live, particularly in Western Sydney, you're bearing the brunt of those decisions.
The third in the trifecta was the Perth Freight Link. This was an interesting one, because I reckon this was done on the back of an envelope, maybe the back of a coaster, who knows, because the project 'freight link' had never been raised prior to the 2013 election with me as transport minister or with my department. No planning had been done, no EIS, nothing from the state government. We found out that it was about a freight link to the port, but it didn't actually go to the port. What's required in Western Australia, and the McGowan government has this vision, for freight is the Outer Harbor. The planning needs to done because, essentially, the Fremantle port is approaching capacity and needs a new facility, and any proper analysis would show that that is the case.
So money was taken away from projects that had been approved by Infrastructure Australia that had a positive business case and given to projects that hadn't been approved by Infrastructure Australia, that didn't have a business case and where the planning hadn't been done. That's why projects which were funded by the former Labor government have been opened, often with great fanfare, by those opposite. The Redcliffe rail line, first promised in 1895, was delivered by the federal Labor government in partnership with the then state Labor government and the Moreton Bay Regional Council. That's why you're seeing projects like that being completed. Regional rail, the Pacific Highway upgrades and a lot of the Bruce Highway upgrades that we funded have been completed now. The stages from Cooroy to Curra around the Gympie region, the Perth City Link project, Gateway Western Australia, the projects on the Midland Highway and the Majura Parkway here all were funded and were the product of Labor's vision in government but were opened by those opposite.
The government doesn't have a pipeline of projects, and that's why infrastructure investment is falling off the cliff. Last year's budget, 2016-17, was $9.2 billion; the actual spend was $7.6 billion, a $1.6 billion underspend in one year. The infrastructure investment in this year's budget declines across the forwards to $4.2 billion. The Parliamentary Budget Office identified that infrastructure investment as a proportion of GDP will fall over the next decade from 0.4 to 0.2 per cent—half. That represents a strategy for less growth and fewer jobs. There are two things you need to do to grow the economy: invest in capital through good infrastructure development and invest in people through education and skills. This government is doing neither. It's reducing both, and that's why it doesn't have a plan for growth and jobs. It just has a slogan of growth and jobs, and that's why it's failing. And this legislation before the House to abolish the Building Australia Fund is consistent with that.
The government tried before to abolish the Building Australia Fund in legislation that was defeated in the Senate. It was defeated because senators understood the importance of the Building Australia Fund. They understood that was the case. Hence, in terms of our approach to nation building, we will defend the funds that were established for transport infrastructure, for education infrastructure and for health infrastructure. We think setting aside funds that can only be used for projects approved by Infrastructure Australia is, frankly, the sort of discipline that this government needs. If it had applied that discipline, it wouldn't have funded projects that never happened.
There was year after year of inactivity on any new infrastructure project in Perth, and yet, if the government had applied proper rigour, that wouldn't have been the circumstance. Perth Freight Link was stopped. All that happened was that, tragically, some wetlands were destroyed, but that was it, three years after an announcement. That is because they haven't got the right approach to nation-building infrastructure, and that is why they should think again before they continue to try to come up with ways to abolish the funds that were established for the right reasons and which, in the government's own rhetoric, they say they support, but their actions undermine that rhetoric.