Transcript of Interview, PM Agenda with David Speers



13 March 2014

PM Agenda with David Speers

David Speers: You're watching PM Agenda. Tony Abbott often says he wants to be known as the infrastructure Prime Minister. Well, today the productivity commission handed the Government a draft report on how governments, federal and state, can do a much better job with infrastructure. They say that a gain of more than a billion dollars a year can be delivered by getting infrastructure right. There are a number of recommendations and findings, not all of them are going to be politically easy, and indeed, one of them has already been knocked out by the Prime Minister. We'll go through them now, because we're joined by the Assistant Infrastructure Minister Jamie Briggs. Thank you for your time.

Jamie Briggs: Hello, David.

David Speers: Now, the Government commissioned this report. It wanted these findings from the productivity commission. Has the draft report told you anything you didn't know, and is it going to change your approach to anything?

Jamie Briggs: Well, it's a draft report, and that's an important point. So there's not yet findings per se, but there are a series of discussion points and ideas raised for seeking further comment. It's 600 pages; it's a very detailed report. It's got some 14 chapters with lots of detail in the report. It tells us what we had an idea of but didn't realise the extent of. That is that the Labor Party have left us a broken infrastructure system, which is costing a billion more per year according to the PC than what it ought to, and therefore taxpayers are not getting the value for their investments in upgrading and building new roads across the country.

And as you say, Tony Abbott will be the infrastructure Prime Minister, and he'll be the infrastructure Prime Minister because he will ensure we have productivity lifting investments in infrastructure, which mean we get better economic performance, it means we get people moving throughout our cities more easily, and benefit not just our economy but our way of life.

David Speers: Well, he says he wants to be an infrastructure prime minister. Let's go through some of the draft findings that the productivity commission say are important to achieving this improved infrastructure that we all want to see. Draft recommendation 12.2: The Australian Government should increase the ceiling of penalties from lawful industrial relations conduct in the construction industry. So tougher fines for unlawful conduct on building sites. Will you do that?

Jamie Briggs: Well, look, we are looking more broadly at the industrial relations aspects. We've announced we'll reintroduce the Australian Building and Construction Commission, and you'll see from the findings of the draft report that is overwhelmingly supported by submissions to this inquiry. There'd been more than 100 submissions...

David Speers: But what about the tougher fines? What about the tougher penalties?

Jamie Briggs: Well... yeah, sure. Well, this is a report which has been released today, so we will look at what they're saying across all of these, but clearly in parts of the construction industry—and I don't want to overstate this, because people like to think that this sometimes is just used as a political football—but there are parts of the construction industry particularly when it gets to building buildings up where the CFMEU gets involved, particularly in Melbourne and Perth, where the costs are higher than what they ought to be because of activity which is not within the bounds of industrial law.

David Speers: Let's move on. Draft recommendation 11.7: Australian state and territory governments, so federal and state territory governments, should remove the requirement for local content plans, such as the Australian Industry Participation Plans, from tenders for all projects. Will you do that?

Jamie Briggs: Well, again, we'll look at that when it comes through in the final report at the end of May, but we've been very clear that protecting Australian industry through, well, inconsistent protections, I should say, is not something this Government is interested in pursuing. We think we need as much competition in this area to ensure you're getting the best value for taxpayers' money as you can. Having so-called Australian business protection clauses in infrastructure contracts, all they do is restrict the opportunity for increased competition, which means that taxpayers are paying more. That is the point the draft productivity commission makes, and therefore...

David Speers: But it does mean more foreign supplies, then, for big building projects. You're not afraid of that?

Jamie Briggs: Well, in fact, if you look at, I think it's chapter 12, it details in extensive detail that one of the challenges in the Australian infrastructure market is you've got two dominant players. We often hear of criticisms of two dominant players in relation to supermarkets and in relation to airlines. When it comes to infrastructure, you've got a similar challenge.

So one of the things that we have been encouraging in recent years, particularly in Queensland and New South Wales with big projects, is increased competition from outside international infrastructure providers. And there's a lot of interest, can I say, David, from several Spanish firms, which have been involved in infrastructure projects in Brisbane and have done a great job. There's an Asian firm such as Samsung who are very interested in getting involved in the Australian infrastructure market. If you've got more competition on tenders and bids, you'll inevitably get a better deal for taxpayers which will mean you'll get better outcomes as far as the use of taxpayers' money.

David Speers: Another of the draft findings, 6.1: There is additional capacity for state and federal governments to finance public infrastructure from their own balance sheets through the issue of sovereignty and/or through tax. So will this Government borrow more or increase taxes to deliver infrastructure projects?

Jamie Briggs: Well, we won't be having higher taxes. We're a low tax party; we think Australians are taxed enough. But we will look at the ways that we can use our balance sheet to provide certainty in some circumstance or de-risk some projects to make sure they get over the line. One of the issues...

David Speers: So debt guarantees, that sort of thing?

Jamie Briggs: Well, we can look at debt guarantees, we can look at concessional loans. These sorts of issues are things that we're happy to look at in the right circumstances to make sure where there are issues related to de-risking a project, for instance, which can help ensure the project gets up. So for instance with the WestConnex project in Sydney, we are contributing to a finance company that the New South Wales Government established, which is building the WestConnex project. It will then, from the proceeds it gets out of that initial stages of that project, on sell and recycle that capital, and we think that's a good way to use the federal budget, and a different way to use the federal budget to get a great outcome. Equally...

David Speers: You say that you won't be increasing taxes. A lot of this report isn't just aimed at the Federal Government. It is, as you know, aimed at the state governments.

Jamie Briggs: Yeah.

David Speers: Now, their main source of revenue is the GST. Doesn't this fit into Ken Henry's argument that we've seen—the former treasury boss—that we do need to look at the GST. We do need to increase the GST so states can get on with some of these infrastructure things.

Jamie Briggs: Well, look, you make a good point. The GST is a state tax. And if the states want to raise additional revenue through the GST they should be arguing that to the federal Government, because it is the states who use that revenue. Now, I don't think Australians are…

David Speers: But as an Infrastructure Minister, don't you have a leadership role here to get behind this?

Jamie Briggs: Well not about the GST, no. I think what we get behind is putting in place the best system to get the infrastructure that Australia needs, and this is what the PC inquiry's about. When it comes to the GST and taxation more generally, I don't believe we are under-taxed in Australia, I think Australians pay enough tax. I think we're not spending our tax money or our revenue as well as we could, and we should have a good look at that and we are doing that, and we will have much more to say in the budget obviously about that.

David Speers: Okay.

Jamie Briggs: But when it comes to infrastructure we have got a big focus on it because it lifts productivity; it means we get better economic performance. And that's why the Infrastructure Prime Minister's been so focused on this.

David Speers: Well he has already knocked out though one idea, as have you, and this is the one that's grabbed a lot of headlines today.

Jamie Briggs: Sure.

David Speers: The Productivity Commission's saying that, well, some sort of GPS tracking should be installed in all cars so that you can more specifically identify who's using what roads how often, and you pay for what you use, essentially. Now, we do already pay for what we use in a sense because of the fuel excise, but with GPS tracking it might be a far-fetched idea and a very long-term one, but it would mean that you could look at how often a particular road is being used, as oppose to a road that's not being used all that often. Why is that such a bad idea? Why rule that out on day one?

Jamie Briggs: Well no I think what we've said is that it's not something we're looking at doing in the … initially out of this report, that's for sure. It is a longer-term idea. I mean, you couldn't do it today, that's the reality, you don't have the technological capacity to do it today. But what it's making the point is we collect at the moment about $18 billion as governments, not just the federal Government but as governments across the country each year, in revenue from drivers or from motorists, whether it be through fuel excises or registrations or direct tolls on certain roads. And we spend about $19.5 billion on upgrading roads, on building new roads. And what the PC is doing there is raising different ways that you could raise that revenue in the future.

Now this idea has evolved in recent times. I'm sure the debate on this will continue to evolve as the years go on. But as I say, in the short term, it's not possible, the technology's not there. But it is of course the job of the PC to think outside the box, and that's what we asked it to do when we gave it very broad terms of reference.

David Speers: Minister we're out of time. Thanks for joining us this afternoon.

Jamie Briggs: Thanks David, always a pleasure.