Transcript of Interview, 6PR Morning Radio
13 March 2014
Gary Adshead: If you haven't heard, there has been quite an interesting document released out of Canberra. The Productivity Commission have released an interim report on how we, as a nation, pay for infrastructure—rail, roads, so on and so forth—very vital as populations continue to grow, and congestion becomes a major issue. We certainly know about that, here, in Western Australia. The report was released a short time ago by Jamie Briggs. He is the Assistant Manager for Infrastructure federally, and he joins me on the line now. Jamie, how are you going?
Jamie Briggs: Good morning, Gary. How are you?
Gary Adshead: Good. There's plenty of reading to be had there. Is this long overdue, this- it kinds of puts it out there for debate at this stage, doesn't it?
Jamie Briggs: Yes, that's right. It's an independent report from the Productivity Commission, which we asked for in November, because the reality is that it's costing too much to build projects in Australia and it's taking too long. And what we said to the PC is: can you have a look at why it's costing so much, why it's taking so long, and how do we finance these projects into the future in the most efficient way for taxpayers. Now, what they've said in their draft report is that the system is broken. The system that the Labor Party left us, after they left office last year, is broken and in desperate need of reform.
It says, in fact, we are spending at least a billion dollars per year extra than we ought to building infrastructure, which could be better used, and deliver more infrastructure, in fact, if we had a better system of planning, of governance, if we address some industrial relations issues, which, of course, are part of the big building construction projects across the nation, particularly in Perth. If we started to address those issues and address the problems that were left by the Labor Party, then we would get better value for taxpayers.
Gary Adshead: Did you expect the report to include the discussion about user charges? So this idea that people driving around the roads pay 1.5 cents—as an example—1.5 cents per kilometre to use the roads, and in return for that the excise from petrol is saved.
Jamie Briggs: The last point is an important point. At the moment there is user charging, of course, already. You pay registration to the state government, you pay vehicle excise, which partly goes to road funding, although not directly. In fact, we pay about $18 billion worth of user charges across the country at the moment each year, which go to about $19 billion worth of road upgrades and new roads. So there is already a system of collection of taxes.
What this does is canvass the idea of a different way. Now, let me make it very clear, Gary, the Liberal Party is a party of lower taxes, not higher taxes, and motorists wouldn't expect that we would be putting a new higher tax on them. But what we will look at are good ideas which ensure we're getting the most effective use of taxpayers' money. Western Australians know that if you put unnecessary taxes, like the carbon and mining tax, on people it has perverse outcomes, like low economic growth.
We are looking for higher economic growth. And in WA we've just recently announced contributions to the North West Coastal Road, for instance, which will ensure we have a better productive outcome on that road, we can get higher economic activity and we can be more prosperous. And that's exactly what Tony Abbott seeks to do as the infrastructure Prime Minister.
Gary Adshead: So you wouldn't rule out having a look at this concept of GPS being used to track a vehicle's movement and then charge accordingly for how much road it's using over a period of a month, or every three months, et cetera? Would you rule that out here and now? Or is it something that you consider, given that it might be a way to minimise other taxes?
Jamie Briggs: Well, it wouldn't be a decision of the Federal Government; that's the reality. It would be a decision of the State Government. And we don't have any plan in that respect, because we've just been given this report also. But, you know, when it comes to how you collect revenue, and how you use it in the most efficient fashion, of course, you've got to look at all the ideas. This one, I think, is very early in its incubation, and I can't see a state government wanting to jump down this path in a real hurry.
There are other means of user charging, of course, and other states. In Sydney and Melbourne and Brisbane particularly, you pay for access to certain roads, they're called toll roads, as you would know. And, as I say, there are other user charges in the system at the moment. The question for the country into the future, what this report canvasses, is we have got infrastructure needs. WA has got real infrastructure needs. There's a lot of work going on at the moment. There is more work, because of Tony Abbott, that will soon begin, like the Swan Valley Bypass.
But how do we best use taxpayers' money to get the most efficient outcome, the best infrastructure we can, to ensure we've got a growing economy? That is the question we wanted the Productivity Commission to look at. And in the 600 page tome they've delivered in their draft report they canvass a range of issues that we can look at to help do that. They also canvass issues which we should avoid. And the number one issue it points to as a failed infrastructure spend was the NBN. It says the NBN was driven by political considerations, not economic considerations. And the planning processes in relation to the NBN saw billions of dollars wasted, which should not have been.
Gary Adshead: Can I just bring it back to transport, because—transport infrastructure—because here in Western Australia we went to the polls, as you know, last year, and the whole debate heading up to the election was based on transport needs—public transport needs, railway needs, here in WA. Both sides pushed very hard what they would do to ease traffic congestion.
And, quite frankly, it wasn't long after the Barnett Government—a Liberal Government—was elected here that they've abandoned pretty much the eastern corridor tramline they were talking about, and the rail line to the airport. Is this—I mean, what I'm trying to get at is, sure, this is all out for debate now, but is it all just more talk that we may not see the results of until it suits the parties to start pushing the lines during election campaigns?
Jamie Briggs: No. Look, not at all. Public transport is a matter which the state governments largely look after, and we think that they should, and that's an important part of the infrastructure mix. And when Infrastructure Australia, which we're reforming at the moment to get a better outcome from that organisation, conducts its audit, and has its 15 year plan, we imagine that there will be, as part of that plan, public transport projects.
What we think needs to happen is that these decisions needs to start to be made on the basis of good economics, rather than good politics. And we think in WA our commitments already are based on good economics, whether it's the upgrades on the Great Northern Highway, or the North West Coast, or the Swan Valley Bypass, or the Gateway Project around the airport. They're all projects which will add to the economic capacity, and on their own stand up.
WA has got a challenge, which—Perth, I should say, has got a challenge, which other cities don't have so much at the moment, which is that it's growing so rapidly, as you would know. And that always creates difficulties on making sure you've got the investment needed to ensure the population can move around it effectively, quickly, not get caught in traffic jams. And that's exactly what using good economic analysis will help you make those decisions based on, not by putting in one marginal seat or another.
Gary Adshead: Is that what you're suggesting was going on at the last election here between both sides, including the Liberal Government at the time? Because, you know, federally…
Jamie Briggs: If you're talking federally, I mean…
Gary Adshead: …federally you didn't support the idea of a Max Light Rail. There was an indication that Tony Abbott wouldn't support it during that campaign, so.
Jamie Briggs: No. That's right. Yes.
Gary Adshead: So is that what was going on, it was just political posturing?
Jamie Briggs: No no no.
Gary Adshead: Because people are bleeding on this over here.
Jamie Briggs: We made very clear across the country we're not funding public transport because we think that's an issue that state governments need to look after across the country. But we are heavily funding roads, and we're heavily funding freight rail. Particularly with roads, our infrastructure budget over the next few years is $36 billion. In WA, we've got a heavy emphasis.
I think we stated very clearly at the election that we would fund projects like the Gateway, projects like the Swan Valley Bypass, the North West Coastal and the Great Northern Highway upgrades, because they will help this state and Western Australia make the most of its economic opportunity. And that's what we are focused on—being more productive as a country.
The state governments, I think, need to make their own decisions, as far as their own budgets, on ensuring that they can- that people can move around their cities appropriately. And if we're heavily investing on roads then states have got more capacity to invest on public transport.
The last point I would make on that, Gary, is that Joe Hockey, the Treasurer, has been talking to the states about using existing capital, existing state assets, more effectively to recycle into big projects. And in that respect I suspect there is a potential discussion for the Western Australian Government to have with the Federal Government to use their balance sheet more effectively. And we want to encourage them, in this respect, to invest in big projects, such as rail projects.
Gary Adshead: Well, we will wait and see what the state budget leaves in terms of a balance sheet. But, just quickly…
Jamie Briggs: Sure.
Gary Adshead: …what's next? I mean, this is an interim report. Where do you think you will be at a point where you're going: right, we're going to adopt that, we're going to take that one on-board?
Jamie Briggs: What will happen is PC now will ask for people's views, and I would encourage everyone listening to have a look at the report. It is, you know, it's written by a bunch of economists, so it's not going to be a best seller. It's 600 pages, but it makes a series of recommendations throughout, or it suggests discussion points throughout. In late May it will put the final report to government, through the Treasurer, and then we will consider what recommendations it makes.
The Productivity Commission is an independent body, and we want it to be thorough in its recommendations. And that doesn't necessarily mean we will agree with everything. But ultimately, as it says at the moment, the system is broken, it needs to be fixed. And we want to see ways that have been suggested, that we can implement, which will fix the system and save taxpayers money, and get better value for road investments and a better economic outcome.
Gary Adshead: Alright, Jamie. Thanks for your time today.
Jamie Briggs: Thanks, Gary. Good on you.
Gary Adshead: Jamie Briggs, Assistant Minister for Infrastructure there, just speaking after the release of a report. And, as I said, there is quite a substantial chapter, if you like, on user charges, and that is you paying to use the roads. Now, we would always argue that we already pay all the registration fees. Even if you could argue that, you know, with GST, et cetera, we're getting taxed left, right and centre. But this is one way of culling off some of the taxes that we face by agreeing to pay a per kilometre fee to use the roads, all done through GPS and technology these days.
But do you agree with that idea, if it meant that you were paying much less for your petrol at the bowser, for example, that you registration fees wouldn't be as high, if at all? Would you agree to pay for a user-pays system here in Western Australia? It is being trialled in Oregon, in the US. Five thousand motorists are undergoing a trial right now, and it looks very positive, from what we're hearing. So would you be prepared? Because, you know, you might not drive very much, and yet you're having to pay as much for all the registration and fuel costs as everyone else. Would you be prepared to pay a user-pays system? I would like to hear your view on it.