Infrastructure Australia Bill 2008: Second Reading

Developing a blueprint will be the easy part; the hard part will be implementation. It will require real leadership and real commitment. It will require a real increase in the investment that we place in physical infrastructure: road and rail, port infrastructure, energy, water and communications. It will require us to make better use of the infrastructure that we have already got, to make it work more efficiently. And it will require an integrated approach, working with state and local governments, with the private sector and, most importantly, with the community. This is an important part of the government’s plans for the future.

The work of Infrastructure Australia will take time to have a real impact. Infrastructure takes time to build, but if we get it right it will have a lasting impact. It will provide real and tangible benefits, both for this generation and the ones that follow. The genesis of Infrastructure Australia was forged in the Labor tradition of nation-building-like Chifley and the Snowy scheme, Whitlam sewering our major cities and towns, and Keating’s Better Cities Program. This government invokes the same commitment, the same Labor ethos, to meet the challenges of this century-projects like building the high-speed fibre-to-the-node broadband network and the $500 million Housing Affordability Fund to reduce the cost of developing new housing estates. Projects like these will make our cities more livable and more productive.

Good infrastructure often goes unnoticed. We notice it when it is not there or when it does not work. Good infrastructure is an important part of building a stronger and a fairer country. Good infrastructure helps the economy and improves the quality of life of the people who use it. As Christopher Brown, the Managing Director of TTF, wrote in the Sydney Morning Herald last year:

A young person denied the right to clean, safe and efficient transport links is the same person denied the right to education, recreation and participation in the workforce. An elderly person denied access to transport is the same person denied access to health services and quality of life. Urban transport is a social, as well as an economic, policy area.

That is why this bill and this body are so important. Good infrastructure is needed to help build a stronger, better and fairer Australia. It underpins our social policy agenda. It does this by providing equity and it does this by helping to tackle inflation. Inflation is now the highest it has been in 16 years. That is what we inherited: the highest inflation in 16 years, the second-highest inflation rate in the developed world. This is a complex problem that requires a number of responses. One is investment in the infrastructure needed to improve business productivity, infrastructure that makes business more efficient.

That means investing in our cities. Australia is one of the most urbanised countries in the world: 70 per cent of Australians live in our major cities. Our eight capital cities contribute about 78 per cent of the nation’s economic growth. They are the engine room of our economy. Connecting people and places is good for our economy, whether that is on the road, on a train or in cyberspace. Unclogging our roads and our rail lines is good for the economy. Time lost has an opportunity cost: time when we could be with family, at school, at work or at another job; time when freight could be on the shelves, not sitting on the dock, on a ship or on the road. Congestion on our roads already costs us $16 billion a year, or two per cent of GDP. The Business Council of Australia predicts this figure will climb to $30 billion by 2020. That is $30 billion of wasted time.

The former government took a narrow view of their infrastructure responsibilities. They said their responsibility was to manage the economy, and that principally meant moving freight. I contend that that is a myopic approach. Making cities work, making the country work, making the economy work means moving freight, but it also means moving people. It means tackling congestion in all its forms. The minister for infrastructure made this point when he addressed the National Press Club in February. He said:

… a policy for moving goods will not work without a policy for moving people.
It is motorists in their cars much more than truckies in their cabs that are clogging our cities.

The more efficient our transport network is, the more productive our economy will be. So here lies the challenge: encouraging growth and productivity by building additional capacity into our road, bus and rail networks, and providing real incentives for commuters to shift to public transport.

A good example of this challenge is the passenger and freight growth that is occurring around Sydney airport and Port Botany in Sydney. Together they contribute tens of billions of dollars to our economy and they employ more than 100,000 people. In the next decade or so, they are predicted to expand dramatically. Passenger movements at the airport are expected to expand from the current 28 million movements per year up to 60 million, and the number of containers at the port is expected to expand from 1.5 million per annum to three million. Making Sydney work means making this port precinct work. It is critical that surrounding and connecting infrastructure can support this growth, and that is why a dedicated freight line supported by a constellation of intermodal terminals is essential. But the existing congestion around this corridor, around this precinct, means we also need to increase the capacity of the road network. This means either duplicating the congested M5 East or a link to the port through a future M4 East.

Infrastructure problems are not limited to our transport network. Our broadband network is also in desperate need of investment. It is a decade behind other developed countries. There is no prize for coming 25th in the world, behind countries like Poland, Hungary and Slovenia. That is why we are building a high-speed broadband network with speeds up to 100 times faster than those available in most homes. It is one of the most important things we can do to make us more competitive, to make the economy more productive.

The national infrastructure audit is an important first step. It will help ensure we invest in projects that deliver the maximum benefit and build for current and future demand. It will ensure we match dollars with real priorities and establish a timetable for delivery. The hard part, as I said earlier, is delivery. Infrastructure Australia, like all good initiatives, will be judged not by its purpose but by the outcomes it produces.

The task is enormous. ABN Amro estimates that the total infrastructure spend across the country over the next decade could reach $400 billion. It will require the government to fund many of these projects, but the sheer scale of the task means we also need to engage the skills and the resources of the private sector. If that is left untapped, many projects will be unnecessarily delayed, the problems will grow and these funds will drift overseas.

Australian superannuation funds already have plenty to invest-$1.4 trillion. It is the fourth largest funds management industry in the world and it is expected to swell to $2 trillion by 2020. Infrastructure is the perfect fit for super funds looking for long-term investments with stable returns. If we do not use these funds to build infrastructure, other countries will. That would be a real and inexcusable tragedy. Our super funds are already investing in overseas infrastructure projects-fair enough-but I would rather have Australia get the benefit of these funds than somewhere else.

I welcome the minister’s announcement that nationally consistent guidelines for PPPs will be finalised by the end of the year, at the same time as the national audit. It is important that these guidelines encourage competition and increased transparency, that they emphasise the importance not just of the construction phase of an asset but of its long-term operations and that they enshrine sustainability and good corporate citizenship-for example, customer service standards.

We also need to invest in projects that not only deliver the maximum productivity return but also encourage a bit of innovative thinking. Big projects take time to build and to have an impact. We can have an immediate impact by making better use of existing infrastructure. Imagine the impact we would have on productivity and people’s lives if we could reduce congestion on our roads and on our rail network immediately by encouraging commuters to use the road and rail networks outside busy periods. There are a number of possible ways to do this: peak and off-peak pricing and changes to working hours are just two.

I note with interest that the Victorian government has just commenced a campaign called ‘Flex in the City’, which encourages employers to allow their employees to start and finish outside traditional peak hours. Employers who sign up to the program allow staff to start work at 7 am and finish early or to start work at 10 am and finish at 6 pm. Flexible working hours can improve the ways that cities work and make them more livable. As KPMG demographer Bernard Salt said:

The problem is, everyone’s trying to get to work for a 9am start … If that can be mitigated or spread across a 7-10am start, then it has the effect of spreading the load in a wider area and making the journey to work more bearable for everyone concerned.

Last week the Victorian government announced that it was expanding its trial of free travel before 7 am to the entire rail network. I look forward to seeing the results of the trial. Another way to tackle this problem could be to adjust retail trading hours. If retail stores across a metropolitan area opened at 10 am instead of 9 am many workers and shoppers would travel outside the existing peak and travel later in the day, potentially reducing congestion on our road and rail network. I think it is an idea worthy of investigation.

For the last decade national leadership on infrastructure has been lacking, and that is what this bill addresses. It brings the work of nation building to the COAG table. We need to work together in partnership. The biggest issues in this country can only be solved by us working together. That is what the people of Australia expect. They do not want bickering; they just want things fixed. They want goods on the shelf, they want to get to work on time and they want power and information at their fingertips. That is what they pay us for-to make these things possible. This is the purpose of Infrastructure Australia: to build a new nation; to build on our proud record of nation building; to build a stronger economy and a stronger country; and to build the infrastructure we need today and tomorrow. For these reasons, I commend the bill to the chamber.’