Asset Recycling Fund Bill 2014
I rise tonight to speak on the Asset Recycling Bill 2014 and related bill. Governments everywhere are exploring the possibilities that asset recycling may deliver. In a high-growth electorate such as mine and having met with the National Growth Areas Alliance this morning, I am acutely aware that the provision of infrastructure is vital.
During the time of the previous Labor government, Lalor and many other growth corridor electorates did benefit from infrastructure investment. In Lalor, specifically, funding was provided through local councils for community centres, libraries and local road project There were also capital investments into TAFE and university. The rollout of the NBN commenced, and our local hospital received funds to expand facilities. All of these investments were much needed in our high-growth area. Locally, we benefited from major infrastructure investment. The federal government contributed $3.2 billion for the regional rail link, set to increase rail access for both business and passengers—a project that will deliver economic benefits to Victoria. This project, currently underway, is being delivered ahead of time and on budget. Those working on this project should be rightly proud of that achievement. And why is this project being delivered in this cost-effective and timely way? Because of Labor's initiatives during its term in government—that is why.
When Labor came to power in 2007, it inherited an infrastructure mess; it was more than an infrastructure mess really—it was an infrastructure disaster. The current infrastructure minister was there during the Howard days, so he will not find it difficult to remember the Regional Partnerships Programme rort scandals. We on this side well remember the millions of taxpayer dollars wasted on projects in regional areas—projects that had dubious merit. The word profligate has been thrown around this chamber much in recent days by those opposite; in error, I might say. But here we have a clear history. So what are some of the memories of the coalition government's infrastructure disaster? Projects like the cheese factory in Wangaratta which was awarded $22,000 in government assistance—despite the fact that it had shut its doors. That one comes to mind, as does funding provided to an ethanol plant in Gunnedah: taxpayer funding was provided, but it actually produced no ethanol. The minister must also remember the $600,000 federal government grant given to struggling Queensland company Beaudesert Rail—against the advice of corporate administrators, and in breach of the program's own criteria. These examples are not a ringing endorsement of the coalition's capacity to handle infrastructure. Back in 2005, the Business Council of Australia acknowledged how cracked the Howard government's infrastructure funding system was, and called for a massive overhaul. As part of their Infrastructure Action Plan for Future Prosperity, the council reported:
…that the current state of Australia’s most fundamental infrastructure - supporting all elements of the transport network, energy and water supplies, and the basic facilities to support growing and spreading urban communities - is in urgent need of reform, repair and expansion.
They went on:
We are at the crossroads in terms of infrastructure development as a result of poor institutional arrangements and policy choices. Changes are required to alleviate current capacity constraints, and provide additional capacity to support high growth in the years ahead.
Let me repeat that, Deputy Speaker: 'as a result of poor institutional arrangements and policy choices'; 'changes are required'. This was after, or during, the years that the coalition were in charge of this country. And so, as is always the way, it was Labor who acted on the failures of that system. It was Labor who were determined to create an infrastructure funding system where government could make decisions based not on lobbying but on hard evidence about a project's worth; about a project's value to the community—and not on the basis of an electoral strategy. It was Labor who announced that, if elected to government, we would create a statutory body to create a balanced and strategic blueprint for future funding, and that is what we did with the Infrastructure Australia Act in 2008.
Infrastructure Australia was created to enact evidence based decision-making; to deal with policy and regulatory matters; to drive reform on legal, tax, planning and infrastructure finance; to evaluate the business cases of projects and project financing options, including private-public partnerships; and to review the adequacy of Australia's infrastructure, identify the gaps, and prioritise the nation's projects. Its first task was to undertake a nationwide audit of Australia's infrastructure, and then to form a priority list for the future. Only infrastructure projects which met a minimum rate of return—determined through rigorous cost-benefit analysis and review—were recommended. With Infrastructure Australia, Labor showed leadership by investing in nationally significant projects and by ensuring lasting reforms. Let us not forget that it was under a Labor government that infrastructure spending grew from $132 to $225 per Australian. It was under Labor that Australia rose to No. 2 in the OECD rankings by the scale of the investment made in fixed capital. And it was under Labor that the total annual investment in our nation's roads, railways, ports, energy generators, water supply facilities and telecommunication networks hit a record $58.5 billion in 2011-12, equivalent to 4 per cent of GDP. We on this side of the House invested, not to gain cheap political points but because, after years of inaction under the Howard government, it was what this country needed. Key to all of this was Infrastructure Australia, because their informed, evidence-based analysis and advice ensured that we were investing in the infrastructure that would drive national growth and productivity. But informed, evidence-based analysis is not what the current government is about.
Along with some of my colleagues, I met this morning with representatives of the National Growth Areas Alliance, an alliance of local councils that serve the high-growth communities around Australia. This alliance, which understands infrastructure needs and which has put considerable time and effort into preparing reports for government, has received no feedback on its submissions. I repeat, this alliance has provided government with valuable information and it has received no feedback. What does this tell us about our current government? It tells us that the coalition government seems intent on making decisions that have no basis in well-developed planning, and that they are not intending to listen to groups from across this country. Take, for example, my home state of Victoria: in the recent federal budget, over $3 billion was allocated for the second stage of the East West Link. One billion of this will flow into Victoria's coffers in just a couple of weeks. In a recent senate estimates hearing, it was revealed that this project has no business plan. You heard correctly—no business plan. The project has not been examined by Infrastructure Australia. It was also revealed that the estimated cost-benefit ratio was lower than the proposed upgrade for the Western Ring Road, a project that was not funded; indeed, a project to which some current funding is now being redirected. There are no detailed plans for the east-west project and no details about the land or houses that will need to be compulsorily acquired, and no information about the road's final alignment. There is no detail about where this tunnel will come up; no detail about when it will see the light of day. There are no details about whether the road will be tolled.
The state government provides hollow words about the benefit to the people in the west of Melbourne, but those who live and work locally are having trouble making any kind of accurate analysis due to the lack of detail. This project is years away from being shovel-ready, but this federal government has seen fit to allocate $l billion to the Victorian government. Something about this does not feel right. The chat around town is that the federal government made these funds available due to its nonsensical rule about not funding rail infrastructure. The original Metro rail link, a project that was planned and researched over many years, with a strong endorsement from Infrastructure Australia, has now been junked in favour of the current Metro light plan. Transport is a big issue in my electorate. In fact, Wyndham City Council is running a campaign to 'get Wyndham moving', because people in my electorate are commuting to work for two or more hours a day, whether it be by road or rail. To fund a project that there is no detail for and to plainly ignore the Metro rail link project, which has been endorsed by experts, is a slap in the face for my community.
So back to the asset recycling bill. Asset recycling can have merit in certain circumstances. I suggest that merit can be determined through careful and detailed planning and deep consultation with the community. This bill, however, does not seem to have those checks and balances at its core. This bill also has the potential to dilute the historically high level of federal commitment to infrastructure funding, a level achieved under Labor. At the recent meeting between Joe Hockey and the state and territory Treasurers, it was reported that Victoria left the meeting 'very disappointed'. The Victorian Treasurer, Michael O'Brien, pointed out that this asset recycling plan has very little benefit for Victoria, as the state has very few assets left to sell. Victoria sold off many of its key assets during the Kennett years of the 1990s. Michael O'Brien indicated he was disappointed the state would receive no credit for the hard decisions of the past. Apparently, the federal Treasurer made it very clear he was not prepared to look backwards.
Last year The Melbourne Review ran an article discussing the benefits of privatising the Port of Melbourne. It makes the case for asset recycling in a positive way, but it also provides this caveat:
Victoria's competitiveness and wealth are inextricably tied to the health of our infrastructure ... With considered investment in projects that are genuinely economically sound, the process of commercialising Victoria's public assets would enhance our state's growth immensely.
There are three words that stand out in that statement: 'genuinely economically sound.' This government wants to be known for its infrastructure. Many a time we have heard the Prime Minister say that he will be the Prime Minister for infrastructure, as if saying it will make it happen. If that is so, and if this government wants to be remembered for successful infrastructure projects, then this government needs to heed advice such as that given out by The Melbourne Review last year.
The asset recycling program appears to offer very little for Victoria. It appears that, as this government refuses to look backwards at the asset sales that have occurred in Victoria, Victoria will miss out on infrastructure spending under this bill. I also have some very real doubts about the way this government is interacting with Infrastructure Australia, and whether they are taking into account the evidence-based information that they are being given in the decisions they are making. Nothing I have heard in this chamber gives me confidence that this bill will ensure good service and good infrastructure for Victoria, or good service or good infrastructure for growth corridors nationally. In particular, I have very little faith that this bill will deliver for my community in Lalor.
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