Transcript of Interview, 5AA Breakfast with David Penberthy, Jane Reilly and Mark Aiston

Interview

BPC021/2014

03 April 2014

David Penberthy: There are two debates in both state and federal politics in South Australia that have dominated last year's federal election campaign and also this year's state election campaign. They are the future, if indeed there is one, of the car industry, and also the future of South Road with the debate about which bit, be it the north or south, should get the green light first in terms of the widening and the upgrade. Joining us in the studio very kindly this morning is the Liberal Member for the Adelaide Hills seat of Mayo and the Assistant Minister for Infrastructure Jamie Briggs. Good morning, Jamie, Minister. Thanks very much for being in here today.

Jamie Briggs: Good morning David. How are you?

David Penberthy: Yeah good. Look, Jane wants to talk to you about South Road, but I thought I might start by asking you about this weird impasse over the car industry. We saw yesterday this spat between the Premier, Jay Weatherill, and the Victorian Premier, Denis Napthine, about the money that the feds have put on the table. Denis Napthine is basically accusing the state Labor Government here of standing in the way of the money being forwarded to those workers who face being displaced. Is that your reading of it?

Jamie Briggs: Well, I'm not going to get involved in a brawl between two Premiers. For whatever reason they've decided to have a public spat. What we are doing through Minister Macfarlane is looking at what policies we can put in place and what proactive assistance we can put in place for people in the northern suburbs affected by the change which we shouldn't forget won't happen until 2017, so it is some time away and there's no need to rush. What we have said as a government is we need to get the settings right to give all businesses the opportunity to do well. Part of our plan is the infrastructure that we've talked about. And one of the things we want the South Australian Government to think very clearly about is the opportunity to use assets, like SA Water, to recycle and invest in new productive infrastructure with assistance from the Federal Government, in addition to the infrastructure money that we're putting on the table to do the north-south corridor.

So we are very focused on ensuring that we are living within our means. And on 13 May when Joe Hockey hands down his first budget, which will be very much focused on bringing the budget crisis back under control, but also investing very heavily in the infrastructure needs of the country.

And in respect of the Victorian and South Australian manufacturing industries, looking at ways that we can assist the adaption to what is the new reality globally—which is that it is hard here, as Holden and Toyota executives have said, to build cars. So if there's a niche opportunity for our manufacturing industry, we're happy to look at ways that we can ensure that we take advantage of that.

David Penberthy: You mentioned SA Water. Can you just clarify what's going on there because my understanding is that the Commonwealth has told not just our state government but all state governments that they should look at these sorts of state-owned or semi state-owned utilities, with a view to completely getting rid of them and selling them to the private sector? Is that the position?

Jamie Briggs: Well, what Joe Hockey said to the treasurers last Friday is that each state has got a limited capacity on their balance sheet to spend more on infrastructure. Most states have got debt—South Australia has got a significant amount of debt—and therefore how do you build or invest in the infrastructure which helps lift your economic performance. What Joe said to them is that if you indeed use your balance sheet more effectively than what it is at the moment, i.e. sell off assets to the private sector to get not only the money which you can pay down some of your debt, but also then invest in productive infrastructure, we will offer an incentive payment for new investment in infrastructure different to what we've already got on the table, new infrastructure.

So, for instance, in South Australia, what you could see is that the state government could achieve its O-Bahn upgrade, it could achieve the electrification of the railway system, the public transport system, and at the same time, along with Federal Government, invest in what's called the northern interconnector up in the northern part – the north part of South Road—which would connect to the port, a huge economic opportunity. That project won't go ahead without serious amounts of new capital.

David Penberthy: But, I mean, all of those projects are noble, and we will talk about South Australia after this, but my last question on that issue is—a lot of listeners, when they hear about the idea of an asset sale, particularly when they have had power bills that have gone up and up and up, their immediate thought is, if it's privately owned, it will cost me more.

Jamie Briggs: That's a good question, David. And there is a myth in this debate which is that our power prices have increased in recent years because ETSA was sold. In fact, in New South Wales—and you'd remember this—the power prices have gone up more and they're in public hands. The power companies are still in public hands. But the reality of why power prices have gone up so much is because when ETSA was indeed owned by the state government, there was a lack of capital investment because each year ETSA produced a dividend, the state government would take it to put on its balance sheet and not reinvest in the capital, and therefore you found—and you will remember in the mid-2000s during heat waves—people weren't getting power or we have blackouts or brownouts because the system wasn't able to cope. So it...

David Penberthy: The flipside too is that water bills haven't been going down.

Jamie Briggs: No, that's right. Exactly right. So the public ownership and private ownership have no impact or little impact on prices. The reality is if you want to see new infrastructure, you've got to find a way as a state government, to invest and I think one of the mistakes that was probably made out of the ETSA sale was that all that money was used to pay off public debt rather than using some of it, as the New South Wales Government is starting to do, to invest in new infrastructure to keep that at—to keep our economy and super-charging growth.

Jane Reilly: Minister, during the campaign for the federal election, one of the really hot topics was what will happen to South Road? It's a major traffic corridor through our metropolitan area and it really does get jammed up. Now the state government at the time, it was Tom Koutsantonis who was the infrastructure minister, they've already started to put in place works at the Torrens Road end, where as we were told very much by Tony Abbott and the Federal Government that they want to start the work at the Darlington end. This is something you're going to have to talk seriously about with the new Infrastructure Minister, Stephen Mulligan. How are you going to approach that?

Jamie Briggs: Well, I'm seeing Stephen at 10am this morning and I look forward to meeting the new minister. It's a great honour to be elected and then to be made a minister straightaway, so he's obviously someone of talent. Just on the Torrens to Torrens versus Darlington debate, the Prime Minister sort of ended that debate in October last year when he said we want to do both projects. The reality is on Torrens to Torrens, its federal government money that's been spent so far on that project. There's not a cent of state government money that's gone into it. What we need to talk with the state government about is how do we fund both projects. When it comes to Darlington, we've seen five cost estimates from the state government in little over 12 months. We've seen figures such as $1.02 billion, blowing out all the way to $1.8 billion during the federal campaign last year, coming back in Labor's costings during the election campaign to $600 million and then $850 million in the last document the South Australian Labor Party put out during the campaign. So, the first thing I want to know from Stephen Mulligan this morning is, where's the study, the federal government paid for in December? We understand that is now completed...

Jane Reilly: You haven't seen that.

Jamie Briggs: We haven't yet seen that. We've got detail that it suggests that the cost of Darlington may be around $620 million. Now, if that's the case, we're confident that we can come to an arrangement with the state government to get both projects underway in the same period of time—to have both projects—workers on site on both the Torrens to Torrens and Darlington ends of the project. We don't want an impasse; we don't want people sitting in traffic unnecessarily. We want our economy to be stronger and we believe if we can build the infrastructure of the 21st century by upgrading the North-South Corridor, and investing in new infrastructure in South Australia, then we will achieve that outcome.

Jane Reilly: And that money for the Darlington interchange that is that available now, is that dependent on something like the sale of say, SA Water?

Jamie Briggs: No, the point I was making to David before, is if the South Australian Government goes down the path, that the Treasurer Joe Hockey is indicating, that would be for new projects. Like the Northern Interconnector, like upgrading the public transport network. The projects we've committed to—the commitment the Prime Minister made last October, is to upgrade the North-South Corridor in a decade. These two projects are vital parts of that. There are other parts of South Road we will then have to address at some stage. But this is very separate to the deal the Treasurer's putting on the table. And I think it's an indication about how serious the Federal Government is about building our economy.

David Penberthy: Minister, you survived the entire chaotic last term of the Rudd-Gillard-Rudd Government where you had Tony Windsor and Rob Oakeshott propping the joint up...

Jamie Briggs: Yeah, and Andrew Wilkie for a period of time.

David Penberthy: Yeah, that's right. Exactly. I almost forgot about him at the start. But we've now got a situation in South Australia where we do have a minority government. Do you think that the Weatherill Government can survive a full term, particularly with the speculation about the possibility of a by-election in Fisher, sadly necessitated by Dr Such's ill health? Perhaps, more importantly, do you think that it should survive a full term and do you think that Geoff Brock should reconsider the decision that he's made?

Jamie Briggs: Well, look, I'm not going to give Geoff Brock free advice. You know, it'd be a bit like you, David, suggesting the Crows might win against Sydney on the weekend...

David Penberthy: Or Carlton might win a game at some point this year, mate.

Jamie Briggs: I think there's more chance the Crows are going to win than Carlton, I've got to say.

Jane Reilly: I'm the only one sitting here with a smile…

Mark Aiston: I'm glad you've lightened it up a bit now, Minister. Thank you for that.

Jamie Briggs: But, look, I don't think, and I've said this since the state election, I don't think hung parliaments work. I don't think they work for the state, or they certainly didn't work federally. South Australia needs some reform. We are lagging behind other states. Our economy is spluttering at best. We're over-taxed, we're taxed more in South Australia than anywhere else on the mainland, and that's holding business back. I hope Bob returns. I genuinely hope Bob returns. I hope he get through his illness.

David Penberthy: Absolutely.

Jamie Briggs: But you would have to say history suggests that minority parliaments do run the full term, but they're not necessarily all that successful, particularly when it's a fourth term government. The two last fourth-term governments we've seen was Tasmania, which was a disaster with the Greens in power with Labor, and the other last-term government, which was probably the worst government in the history of the federation, was a New South Wales fourth-term government after they won in 2007 in similar circumstances.

David Penberthy: Jamie Briggs, Minister for Infrastructure, thanks for coming into the studio today.

Jamie Briggs: Thanks, David.

Mark Aiston: Good luck against the Bombers.

Jamie Briggs: Well, we need more than luck [indistinct].

Mark Aiston: What are you going to do about Chapman? Wouldn't you love to pick that bloke up?

Jamie Briggs: Well, I think Carlton and the Crows will fight out somewhere around the bottom six.

Mark Aiston: Thanks Jamie, appreciate that. Jamie will be back in about 12 months.