Nation-Building Funds Bill 2008; Nation-Building Funds (Consequential Amendments) Bill 2008; Coag Reform Fund Bill 2008: Second Reading

It was said of Caesar Augustus that he found Rome brick and left it marble. It can be said of Gough Whitlam that he found the outer suburbs of Sydney, Melbourne and Brisbane unsewered and left them flush.

There was a lot happening around that time, but I think it is telling that what my parents remembered most about the Whitlam government was that they put sewer pipes in Western Sydney. It is a message that has stayed with me to this day. It is a message that says infrastructure matters. Sewer and water pipes matter, broadband connections matter and good roads and public transport matter. They matter because they have an impact on people’s lives, and they matter most in our cities. Paul Keating talked about this in his first speech in this place in 1969. This is what he said:

Filthy sewers and lack of adequate sanitation are reminders of the shortcomings of government generally in this country … The bulk of Australia’s population, as you all know, is concentrated in the capital cities and regional areas, yet there is less attention paid to the problems of these areas than there is to rural areas.

The sewers have been fixed but otherwise he might have been talking about the last federal government. They took the myopic view that, unless it was shifting freight or shifting votes, they did not invest in infrastructure. Sometimes they did not even know what infrastructure meant. This is what the shadow minister for finance, Joe Hockey, said about infrastructure two months ago on Steve Price’s program:

You know what the biggest investment in infrastructure is? Investing in people. Giving them tax cuts, helping them pay their bills everyday. Giving them a job. That’s what I call investing in infrastructure.

Well, no. That is not infrastructure; that is tax cuts. There is a difference. Infrastructure is things like roads, rail, ports and broadband. The last government did not believe that it was its role to provide national leadership in this area.

That is now changing, as evidenced by this legislation, the Nation-building Funds Bill 2008 and cognate bills. This legislation is about national leadership. It is about nation building. It is about improving productivity, strengthening our economy and making out cities work. In my first speech in this place I said:

Seventy per cent of Australians live in our major cities. They are the engine rooms of our economy. Improving the performance of our economy means improving the performance of our cities-making them work.

That is why the federal government needs to be investing in infrastructure. Connecting people and places is good for the economy, whether that is on the roads, 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 freight could be sitting on our shelves and not sitting on the docks, on a ship or on the roads, time when we could be with family, at school, at work or at another job.

It should not come as a surprise then that the biggest problem identified in the submissions to Infrastructure Australia was urban congestion. The congestion on our roads already costs us about $16 billion a year or two per cent of GDP. The Business Council of Australia predicts that this figure will climb to $30 billion by 2020. That is $30 billion in wasted time. That is why the Building Australia Fund is important. But, on its own, it will not fix this. It has to be coupled with a determination to improve the efficiency of existing infrastructure. It also has to leverage private sector expertise in investment.

The Westlink M7 project is a good example of what I am talking about. This is one project where the former federal government deserves praise, where it did get involved in infrastructure for a city and leveraged its investment with that of the private sector. It got involved because it is a major freight route-a Sydney bypass. But it was and is also a boon for business, motorists and the people who live along the route. I have to declare an interest here. I worked for one of the companies behind the project-Transurban. I think it is a template for future projects. The M7 has had an enormous impact on Western Sydney. It has made Sydney’s west a better place to live and it has made it easier to get around.

It has also been a magnet for economic development. Some of Australia’s biggest companies have now relocated along its corridor. In the past three years it has created an additional 10,000 jobs in Western Sydney and generated more than $3 billion in economic development. But perhaps the importance of the M7 is best illustrated by the dramatic shift in public sentiment. During the construction of the road, Blacktown council put up signs saying ‘no orbit toll’. By the time the project had finished, they had become the project’s biggest fans. Transurban became Blacktown City Council’s corporate citizen of the year.

Roads like this make a massive contribution to our economy. Earlier this year a report from Ernst and Young found that the economic impact of Sydney’s network of motorways is greater than the economic impacts of Sydney’s Port Botany. I think we need to build more M7s, but I am not talking about motorways; I am talking about M7 type projects for our ports and intermodal terminals.

I mentioned a moment ago Port Botany. Combined with Sydney Airport it forms an economic hub that is critical to the Australian economy. Together, the port and the airport contribute tens of billions of dollars to the economy and employ more than 100,000 people. The challenge is to accommodate the enormous growth that both are expected to experience in the next few years. In the next decade both will expand dramatically. Passenger movements at Sydney Airport are expected to increase from 28 million to 60 million. The number of containers moved at Port Botany is expected to double from 1.5 million to three million. Making Sydney work means making this precinct work. It is critical then that surrounding and connecting infrastructure can support this growth. That is why a dedicated freight line is currently being built, that is why we need to widen the M5 and that is why we need to duplicate the M5 East. It is also why we need to develop an intermodal terminal at Moorebank with the support of the private sector, one of a constellation of land ports to help move freight in and around Sydney and to take trucks off our roads, particularly the ones that carry empty containers back to port. The corridor from the port and airport to Western Sydney is one of Australia’s key economic arteries. It is clogged and it needs federal help to fix it. The benefits of this will be felt by the entire country. It will make the port more productive, the transport routes more efficient, Sydney more livable and the national economy stronger.

We also need M7 type projects in our education system and our health system. That is what the $11 billion Education Investment Fund and the $10 billion hospital investment fund will do. And M7 type projects in public transport are what the Building Australia Fund will do. The former government refused point blank to even contemplate investment in public transport. This is what the current Leader of the Opposition said in 2006:

Urban public transport is unequivocally within the state governments’ bailiwick. The public know who is responsible.

My point is that by wiping your hands of responsibility you do not make the economy any stronger, you do not make the economy any more productive and you do not make your cities more productive or more livable.

I got firsthand experience of the benefits of national investment in public transport when I visited Tokyo earlier this year. Tokyo, as many members will know, is one of the biggest cities in the world. More than 12 million people live there. What surprised me was the blue sky. It had none of the smog that you might see in big cities elsewhere throughout the world. This is due in part to the success of the Tokyo public transport system. With 500 kilometres of metro rail lines, 86 per cent of trips are by rail-and the private and government operators make a profit from the fare box. It also means the city is more productive. More people get to work sooner and more people get home more quickly. It is not perfect but it does work. The scale and the density of Tokyo suit it.

Obviously you cannot compare this with Australia. We have very different cities and our populations are quite different but the key difference is national involvement, national investment in public transport, and that is what we have to do here. Already in this year’s budget the government commissioned a feasibility study into a metro link connecting the two largest CBDs in Sydney:

Parramatta and the city centre. Also, studies were commissioned in Victoria and South Australia to look at how public transport could ease urban congestion. These are important things. The more efficient our public transport network is, the more productive our economy will be and the fairer it will be. Christopher Brown, the Managing Director of the Tourism and Transport Forum, made this point in the Sydney Morning Herald:

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.

That is why all of the projects that the Tourism and Transport Forum have recommended in their submission to Infrastructure Australia are for funding in public transport. So the focus of government infrastructure funding is changing-and so it should-but so is the prioritising and the vetting of infrastructure projects. For the first time, this process is independent of government. The priority list that this legislation will fund is being prepared by the Infrastructure Australia Board, made up of representatives from the Commonwealth government, state governments, territory governments, local governments and, importantly, the private sector-people like Sir Rod Eddington from JP Morgan, Heather Ridout from the Australian Industry Group and Mark Birrell from Infrastructure Partnerships Australia, a former Victorian Liberal member of parliament.

They are the ones who have been given the task of developing the country’s infrastructure priority list. This has been fast-tracked by the Prime Minister. The list will be submitted to government this week and will model and prioritise projects that strengthen the economy and improve productivity. These are the criteria that a project must meet to receive funding: (1) how does it expand Australia’s productive capacity? (2) how does it build Australia’s global competitive advantage? (3) how does it develop our cities or our regions? (4) how does it reduce greenhouse gas emissions? (5) how does it improve our quality of life? This is how the projects will be judged. They will be judged on their merit rather than on their electoral margin. It is very different to the way the previous government did business. In this debate we have heard a lot about transparency and suggestions of slush funds. I have to say that it is a bit galling to hear that from the opposition, because there is no way that John Howard would ever have adopted an independent process for determining infrastructure funding. Remember the rorts? Remember the National Audit Office report which showed that 32 projects by the previous government were approved a week before the election at two minutes before midnight? Of those 32 projects, 28 were in coalition electorates.

This process will make sure we fund projects that deliver the best return to the Australian economy, not to the member with the most marginal seat. That is why it has the support of business. Tony Shepherd, a giant of the infrastructure industry, had this to say:

The $20 billion injection into the building Australia fund is a great development of the country. Finally, at the federal level, we have a recognition of the government’s obligations in terms of the investment and development of infrastructure.

It seems to me that there are two schools of thought in this place about infrastructure: you either leave it to the state and local governments or you get in there and do the job yourself. I think the federal government should be involved. Gough Whitlam did it in 1972. The big cities of the world, cities like Tokyo, work because their national governments help to fund infrastructure. The government of Japan helps to fund Tokyo’s metropolitan transport system, which carries 86 per cent of its commuters every day. There are other governments like this all around the world, and now this national government-the Rudd government-is doing the same thing. We have established a process to get the priorities right, backed with real money. That is what this legislation is about: working together with state and local governments and the private sector to fix the major arteries of our economy, to strengthen our economy and to make our cities more efficient, more productive and better places to live. For that reason, I commend the legislation the House.