Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I rise to make a contribution in the Infrastructure Australia Amendment Bill 2013 second reading debate. By way of starting, I followed the Infrastructure Australia debate through the Senate estimates process over a couple of years and noted with particular interest how much attention Infrastructure Australia received. In particular, its CEO, Mr Deegan, received a great deal of attention. I can concur with Senator Macdonald on at least one issue, and that is that Infrastructure Australia was well represented by Mr Deegan. He attended Senate estimates without a platoon or squadron of advisers and, in my view, was very forthcoming and forthright in his answers. So, for me, a rare moment of agreement with Senator Macdonald.

I think it is worthwhile to go over the history of infrastructure and in particular Labor's history of infrastructure. I think that it was around 2005 that the Australian Labor Party announced it would establish Infrastructure Australia if elected. On 2 August 2007 the then leader of the opposition, Kevin Rudd, detailed his plans for Infrastructure Australia, stating that it would have three divisions: one division to deal with policy and regulatory issues and drive reform on legal, tax planning and infrastructure finance matters; a division to audit the adequacy of the nation’s infrastructure, identify weaknesses and prioritise projects; and another division to evaluate the business cases of projects, project financing options, including private public partnerships, and to manage the probity process. So a reasonable person would conclude that that is not particularly skewed in any way; it seems like basic common sense. When you look at the Prime Minister's avowed intention to be the infrastructure PM, you would probably think that it was not a bad starting point, even though it was said by Kevin Rudd or set up by the then opposition. The average taxpayer and voter would expect there to be a business case, probity, an evaluation of projects and financing options.

In Australia the responsibility for infrastructure is spread across the three tiers of government and the private sector, and so the burden of both funding and physical provision of infrastructure lies overwhelmingly with the states. The Commonwealth provides grants to the states and local government to fund infrastructure, but the states and local government are responsible for the physical provision. Now we have the private sector becoming increasingly involved in financing construction and operations. In that environment, surely you would start with a sound, logical and well-thought-out base—probity, evaluation, business case and those sorts of things.

We know that Infrastructure Australia did an audit of all of Australia's infrastructure needs; that it did business cases and identified projects as ready to go. That would seem to be an eminently reasonable use of taxpayers' money and the use of good intelligence, good planning, good skills, good input from all sectors. I would have thought that was a reasonable basis for any government to go forward. But look at the coalition's policy of 5 September, where they claimed that only the coalition would deliver the infrastructure of the future. They deliver their claim:

If you vote for the Coalition, you know what we will deliver. We deliver infrastructure projects across Australia, including:

Some of those projects may have gone through the Infrastructure Australia process with no problem at all and some may well be among those projects earmarked ready to go.

There was a very clear, precise, well-thought-out base in Infrastructure Australia from which any government, whether we continued or the incoming Liberal government, could have simply gone forward using taxpayers' money in an eminently reasonable way by getting a business case up, getting the approval through, doing the necessary arrangements with state, local and private partnerships, if they were part of the equation. But we did not get that. During estimates I detected a great degree of antipathy for Infrastructure Australia, particularly from those senators from the National Party. I did not really understand at the time why they were asking about the view from the boardroom or how much the boardroom cost or how much was spent on lunch. All of these questions were designed to impugn or disparage the way Infrastructure Australia was conducting itself. If we delved into it a bit deeper, we may well come to the conclusion that politicians being what they are—and I am one as well—would like the authority to spend money where they wanted them to. What Infrastructure Australia did was to put in some discipline: there had to be a business case, key performance indicators and it had to stack up in the national interest. The project had to be to something very productive.

One of the most productive outcomes for Infrastructure Australia is the Western Ring Road in Melbourne. The Keating government put about $550 million into it. It transformed the ease of access in Melbourne by freeing up congestion and helping people get around easier, but, more importantly, it put up the business case for someone in West Melbourne in an old site which constrained their efficiency being able to move when the ring road was in place. The value of the land in West Melbourne compared with the land around the Western Ring Road meant they could move for no cost. So they became more efficient, but they still could get to the port and their customers, and they had new premises. That is real productivity. Mr Abbott says in this document:

I want Australians to spend less time in traffic gridlock on our roads and more time with their families.

That is fine; everybody wants that. These infrastructure projects cannot be assessed on the basis of traffic gridlock. They have to be assessed on the genuine economic prosperity they bring or open up. Very clearly, infrastructure projects like the Western Ring Road have demonstrably done that. That project took a long time to get off the ground and it is the subject of massive funding now—something like $2 billion is being spent on upgrading it. The ring road was built on a proper economic footing

That is what this debate really should be about in this space—it should not be about pork-barrelling, or about allowing the Nationals to have more say on infrastructure. Why have we changed the way that Infrastructure Australia has operated? Has anybody been able to point to any startling failing in the way that it has completed its business? In the report by the Standing Committee for Rural and Regional Affairs and Transport Legislation Committee, the comments of Senator Sterle in his dissenting report are very pertinent:

In a short period, Infrastructure Australia has overhauled and driven lasting improvements to the way Australia plans, assesses, finances, builds and uses the infrastructure it needs to compete in the 21st century. To date its achievements include:

(a) completed the first ever infrastructure audit;

(b) put in place a National Priority List to guide investment into nationally significant projects which offer the highest economic—

most importantly—

and social returns – and the former government committed funding to all 15 projects identified as ‘ready-to-proceed’;

(c) developed national Public Private Partnership (PPP) guidelines to make it easier and cheaper for private investors to partner with governments to build new infrastructure;

(d) finalised long term blueprints for a truly national, integrated and multimodal transport system capable of moving goods around as well as into and out of Australia quickly, reliably and efficiently: the National Port Strategy, the National Freight Strategy and more recently the Urban Transport Strategy; and

(e) conducted pilot work on improving governance and developing rigour around evidence-based road funding.

So here we had an Infrastructure Australia that was doing a good job, and along came a new government and a new minister and—according to our Prime Minister, Hon. Tony Abbott—a prime minister who wanted to become known as the Infrastructure Prime Minister—and the first thing he did was set aside, ironically, all of the infrastructure that was set up to deliver what he wanted, which is true economic and social outcomes worthy of this great nation in which we live.

The reality is that we have probably got down to a bit of pork-barrelling. Basically—and it is unfortunate—this decision seems to herald a return to decisions being made on the basis of politics rather than on the basis of true value for money for the taxpayer in Australia, or the true national interest. This might be dismissed as an idle concern, but I do not believe it is. Minister Truss was a minister in the former Howard government's Regional Partnerships Programme. That program was heavily criticised by the Audit Office—not by me and not by people on this side so much, but it was heavily criticised by the Audit Office and, clearly, it poorly prioritised road funding decisions. However, the projects involved here are much larger, and this minister will have new power to nominate projects for evaluation—perhaps not now that we have had some consideration of the Labor-inspired amendments. But will there be a less independent, less transparent Infrastructure Australia? I think that is clear. The model that was there was clear and transparent, and it was supported by the bus industry council and a number of other major contributors in this space. What we now see is less clarity, and less certainty about projects and about how they get up—will they really have the transparent tests applied to them? Will it all be published? Or will it be, basically, on the whim of the minister or his department?

What we thought were the strengths of Infrastructure Australia were its transparency, its independence, and its clarity. There was quite an interesting exchange between Senator Conroy and the new Acting Australian Government Infrastructure Coordinator, where the definition of a conflict of interest was brought into play. But with the departure of Mr Deegan, Infrastructure Australia has very clearly lost a bit of its mettle. It has lost a bit of its transparency. It has lost a bit of its strength—because Mr Deegan was not one for telling people what they wanted to hear. I am not saying that the person who has replaced him while he is on alleged gardening leave is saying what people want to hear. But aspersions were cast on the chain of employment that that person had, and on the fact that he may well go back to his previous job—which had people wondering a little whether he could really give truly impartial advice to the minister.

We do not want to say that the Deputy Prime Minister is out there to pork-barrel for his electorate; I do not want to say that anyway. And I do not really mind where the investments are in Australia, as long as they are based on the prudent guidelines that have been in existence for testing projects as to their propriety, their transparency, their economic worth to the nation, and the things that they bring to all of the population. Whether the project is in a National Party seat, a Labor seat or a Liberal seat, I think that if it has gone through the best possible process and can stand up in the cold hard light of day as an independently arrived at decision, then that is where the investment should be. The Business Council supports the passage of this bill, subject to the amendments being made, or to the withdrawing of positions that give effect to ministerial powers to direct IA not to evaluate certain classes of projects. That clearly should not be in the minister's purview to say, 'Don't evaluate that', because you remove the transparency argument I have just put forward. On the requirement that IA can publish project evaluations and other information only when it is directed to: well, it should be publishing those things anyway; this is taxpayers' money. We pay tax, and we should be able to look, at the end of the day, at where those dollars are going. That should be transparent. And project evaluations should be openly available to all who want to see it.

These are the sorts of issues that had been fleshed out in the debate, and it is good to see that the Deputy Prime Minister, the honourable Mr Truss, will agree to some amendments that put a little bit better a case on the situation. But we cannot ever walk away from the fact that there is a significant amount of need for infrastructure in Australia, that there are significant taxpayers' funds invested in infrastructure in Australia, and that the federal government has the guiding role. One of the really disappointing things is this refusal to invest in urban transport. I have been a transport person all my life, and it was always road and rail. There is always a case for rail, and there is always a case for road, there is always a case for freeways and there is always a case for light rail and buses and the like. So, the fact that you steer all of your infrastructure dollars in one particular way may have the effect of skewing away from really good infrastructure in our cities. If a state government, local government or public-private partnership knows that the federal government will not involve itself or invest in urban public transport, then I think that is a bad move, which probably does not meet the transparency test, the real business case test.

We do need to look at roads—most particularly, around our major cities, to free up gridlock. If you look at the South Road redevelopment, it many save only six minutes per vehicle, but if that is 3,000 trucks that are saving six minutes every 24 hours then that is a huge boost in productivity. So, I fully understand that roads are very, very important. But I think it is equally important to recognise the whole transport network and that this government should build on the good foundations left to it by the previous government and have a clear, transparent Infrastructure Australia that has a degree of independence and transparency and delivers for Australia the productivity this country so richly deserves.