Press Conference—Perth Freight Link
19 May 2014
Joint release with:
Senator Mathias Cormann
Minister for Finance
Acting Assistant Treasurer
Senator for Western Australia
Western Australian Minister for Transport
State Member for Alfred Cove
Press Conference—Perth Freight Link
Mathias Cormann: It is great to be here with my good friends and colleagues, the WA Minister for Transport Dean Nalder but also the Federal Assistant Minister for Infrastructure Jamie Briggs, all the way over from South Australia and also my Federal colleagues Dennis Jensen and Steve Irons and also our State colleague here, the Member for Forrestfield Nathan Morton. Now this is a very exciting day as we are formally announcing a significant Federal investment in significant future economic infrastructure for Western Australia. The project overall, the Perth Freight Link project will involve $1.6 billion worth of investment, including $925 million from the Federal Government. It will significantly encourage future economic growth in Western Australia and will be delivering significant economic and social benefits in terms of reduced traffic congestion, in terms of improved safety on the roads and in terms of maximising our potential as a State to reach our full potential into the future. It gives me great pleasure to ask Jamie Briggs and Dean Nalder to proceed with the formal announcement.
Jamie Briggs: Well thank you Mathias and look Dean thank you, my parliamentary colleagues also Nick Combe, running the project, the Gateway project which is such an important part of our plans here with the Roe highway. What we wanted to do here in Western Australia is to create an continuous freight network to get 65,000 big trucks off local roads and ensure that freight from this ever increasing and expanding of this great State of our Federation can continue to perform as economically as well as we want it to. The problem of course with the Gateway project is whilst it was a very good project, a $1 billion project, it finished at a T-junction and for years the ‘Roe-8' project was talked about but was never delivered by successive governments. In fact the former Labor Government tried to get rid of it completely. What Mathias Cormann did as a Senator for Western Australia along with Dean Nalder and myself in the last two months is put together a comprehensive plan involving the private sector for the first time in Western Australia to deliver a very important piece of economic infrastructure. This will ensure that Western Australia can continue to grow at the pace we want it to, to ensure our prosperity for the next generation. Our Budget was about contributing and building and here in Western Australia there is no better example than building this very important piece of infrastructure. 65,000 big trucks off local roads is a big benefit for consumers and it is a big benefit for the trucking network being able to get their freight to port and to market much quicker. So it is a great pleasure to be here today to confirm the Australian Government's commitment of $925 million to ensure the Gateway project, the work that Nick and his team are doing doesn't end in a T-junction and in fact ends in the continuous free run to the port of Fremantle. Dean would you like to add?
Dean Nadler: Thank you Jamie. And likewise from a State perspective, we are very appreciative of the support that we have received from the Federal Government to really now tackle a complete freight corridor that will extend from Fremantle out through to Kewdale and up to Muchea. It is really going to become the second freeway in Perth which is fantastic. As Jamie just mentioned, the priority for us as a Government is to deal with some of the bottle necks that exist within the Perth movement of vehicles and one of those is at the corner of the freeway and Roe highway particularly with the hospital coming on stream. We see that as a priority that we want to move on as quickly as possible to alleviate some of the pressure that exists on South Street. In addition to that, where we are today, on the corner of Roe and Berkshire, it is a black spot. And again, with the support of the Federal Government, with Mathias and Jamie and the pressure from the local Member from Forrestfield Nathan Morton we have been able to tackle this black-spot immediately and we will be starting work on that within the next couple of months. So again, very appreciative of the Federal Government's support and really looking forward to getting this project underway.
Mathias Cormann: In terms of questions, if we can take questions first in relation to this project and if there are any other Budget related matters that you want to ask about, we might take those second.
Journalist: Question to Minister Briggs, is they are cost benefit analysis that underpinned this decision to invest in this project and if so, will you release it?
Jamie Briggs: There is cost benefit analysis the Western Australian Governments worked on and of course in time we will but we are involving in the private sector so you need to take into account commercial considerations to ensure the taxpayers get the best value. The cost benefit analysis on this project is out of the ball park, it is over five which given we get projects over one usually, this is an exceptional project and absolutely justifies the decisions to fund it.
Journalist: What are the options for heavy vehicle charging of some sort has been publicly explored? Can you be more specific about the options for that?
Jamie Briggs: Well we are working through that at the moment. We're getting expert advice from independent agencies, but obviously when you're involved in the private sector they expect a return and usually transport companies are happy to pay if it means they're getting more effective and efficient access to the port and along the freight line. So we absolutely need the private sector involved in this, it is an expensive project, but it has enormous economic benefit and that's why we are funding it and that's why we're so pleased the Western Australian Government's agreed to involve the private sector. Dean, do you want to add to that?
Dean Nadler: For us it's a perfect opportunity to now examine how we work together with industry to understand that benefits that will be achieved by industry and then how they can contribute in certain ways, through these benefits, to the completion of this freight corridor.
Journalist: You're going to need $675 million more though, how much of that do you anticipate with be from State funding and from the private sector? What's the carve-up like?
Dean Nadler: If you look at the total $1.6 billion and the Federal Government has offered $925 million and they've offered to upfront that for us, we are now looking at $230 million of State funding and the remainder being with a private partnership.
Jamie Briggs: So 80 per cent of the government contribution is Federal and 20 per cent is State and the remainder is made up of private sector contribution.
Journalist: Will this project go to Infrastructure Australia for their view?
Jamie Briggs: Of course.
Journalist: When will that happen?
Jamie Briggs: As soon as we're ready to put it through Infrastructure Australia and the Western Australian Government and my Department are working through the detail of that now. We've been working on this for a couple of months together to put this together, we've involved independent agencies from Government, looking at this and looking at the prospects of the project. As I say, all the indications are that this has enormous economic benefit, well above every other project we're funding across Australia. It adds to the value that the taxpayer's spending on the Gateway Project. As I mentioned, the Gateway is of enormous benefit for WA no doubt, but at the moment it finishes at a T-junction. So you don't get the true benefit of this, until you get through to the port. So combine this with the North Link Project, the Old Swan Valley Bypass which is getting new names everyday seemingly, we think this is of enormous benefit, not only for commuters in Perth, but also for people in rural Western Australia getting their product to port.
Journalist: Will it be the usual practice of the Abbott Government to make investment decisions and commit to projects before they go to Infrastructure Australia.
Jamie Briggs: No but the problem we found with Infrastructure Australia when we came to Government was that Infrastructure Australia wasn't speaking to the States, which creates a fundamental problem. There had been a complete breakdown in trust between particularly the major Eastern States and Infrastructure Australia where they weren't willing to give up information because they weren't sure whether it would be leaked to the media for political purposes. So we are dealing with the structures of Infrastructure Australia, we've dealt with some of the personality issues involved, and Infrastructure Australia is now in the process of rebuilding those relationships. So in the future we want an audit conducted by Infrastructure Australia with a 15 year plan in conjunction with the States that we will work through. But in the early stages, there are projects across the country which have enormous benefit and we want to get on with them because as I said earlier, our Budget was about ensuring we live within our means on one hand, but ensuring equally that we've got an economic plan for the future to build a stronger Australia and this is part of that.
Journalist: Can I ask you to public reaction to the Budget...interrupted
Mathias Cormann: Are there are any more questions in relation to the roads announcement otherwise we can go the Budget?
Journalist: There's been some issues in other States with Public-Private Partnerships and investor's being burnt, do you have any concerns about the ability to get private support for this?
Dean Nadler: Look we need to explore what this will look like and we are really at the early stages of trying to understand that. If you consider that this is actually a freight corridor that extends right the way from Muchea through to the ports, this is a huge opportunity and the private partner contribution of the total project is only a portion. So I believe that we're looking at it in the right manner. We're not looking at the private sector to fund the whole lot. The Federal Government particularly is making a huge contribution. I'd like to think that we're going to get that balance right, but we now need to do the work on that.
Journalist: Is it a departure from the previous bipartisan policy on tolling roads in Western Australia?
Dean Nadler: It is a change in the extent that we're going to look to industry to fund a portion of this infrastructure, so yes it is a change in that sense.
Mathias Cormann: The important point here is that this is really about achieving a win-win. If we want to be able to make these significant investments in building a stronger, more prosperous economy into the future, delivering benefits for industry, then it is only fair that industry helps us achieve the delivery of those projects. So happy to go with a few questions on the Budget now.
Journalist: Thank you, yeah. The reaction to the Budget in Newspoll today is not good for the Government.
Mathias Cormann: Well we are focused on making the right decisions for Australia, not on making the popular decisions. What we said before the last election that we would do is to fix the Budget. We are working on fixing the Budget because that is the right thing to do for the country.
Journalist: Given that the reception that you have had for not keeping promises, the backlash in that, do you think there is a case for better explaining what you have done and why?
Mathias Cormann: We certainly are very focused on explaining the decisions that we have made and the reasons for those decisions. We are focused on building a stronger economy, creating more opportunity, building a more resilient, more prosperous economy where everyone has the opportunity to get ahead. But at the same time we are also focused on repairing the Budget mess that we have inherited from our predecessors and there are some difficult decisions that are involved in that. We are not shying away from that.
Journalist: Are your surprised by those results this morning?
Mathias Cormann: No, we never said it was going to be easy. We didn't think it was going to be easy. Nobody likes losing benefits at any one point in time. There is no easy way to get the Budget back on track. We said very clearly in Opposition that the age of entitlement had come to an end. We are focused on replacing the age of entitlement with a new age of opportunity, where everyone has the opportunity to get ahead.
Journalist: The ending of Commonwealth funding for concessions for seniors, is that something you think the Western Australian Government should pick up the bill for going forward or will it be acceptable if they cut those programs by an equivalent amount of the funding that you have discontinued?
Mathias Cormann: State Government concessions are a matter for State Governments. If State Governments are of the view that they should offer concessions, which is appropriate, then it is a matter for State Governments to determine how that should best be funded. The Federal Government can't continue to spend money that we haven't got. The Federal Government has to get back into a situation where we live within our means. The situation that we inherited is where the Federal Government is spending $1 billion a month just to pay the interest on the debt that the previous government accumulated. The situation we inherited was a situation where not only all of the consumption was significantly put on the credit card, on the nation's credit card, but the previous government took out a second credit card in order to fund the interest on the first. Everybody who runs a household budget across Australia understands that that is not sustainable. We had to put a stop to that unsustainable spending growth trajectory and we are doing that.
Journalist: So if those concessions are unwound, will you put your hand up and take responsibility for them? Or will that be a matter for the States?
Mathias Cormann: State Government concessions are a matter for the State Government. I note in The West Australian this morning, the State Government has said that they are going to keep their concessions in 2014-15. It is going to be a matter for the West Australian State Government and for State Governments across Australia as to what they want to do in relation to their concessions in relation to their services moving forward.
Journalist: How should the States be able to raise more revenue to pay for these things that you have made clear that the Commonwealth isn't going to continue to fund? Should they have more revenue levers available and if so what should they be?
Mathias Cormann: First of all, there is a range of issues there. Firstly, all levels of government have to live within their means. The previous Labor government at a Federal level was splashing money around left, right and centre, including towards the States, money that they didn't have. What we are doing in this Budget is to put our spending growth trajectory on a more sustainable level. We think that all levels of government ought to do the same. State Governments across Australia ought to focus on what they are spending their money on, making sure that their spending is as efficient and as well targeted as possible. Beyond that, we do have to have a conversation about the proper functioning of the Federation, which is why we are going through a Federation White Paper process where the States will be able to put forward their views as to how they think Federal-State financial relations arrangements need to be improved. We also have the Tax Review White Paper process which will commence shortly and there will ample opportunity for the States to express their views.
Journalist: Do you think the States need to do a better job on the spending side rather than the revenue side in the first instance?
Mathias Cormann: Well I think that all levels of government, all levels of government, need to ensure that their spending is sustainable. At the Federal level the situation we inherited was unsustainable. We inherited an unsustainable spending growth trajectory. We have put a stop to it. Spending at a Federal level including funding for health and education I might add, the Federal contribution to the funding for health and education continues to grow, but it will grow at a more realistic, at a more affordable pace than the situation that we inherited from Labor.
Journalist: So is Western Australia's spending trajectory unsuitable?
Mathias Cormann: I will leave the State Government for Western Australia to explain themselves in relation to their spending and the State Government in Western Australia will no doubt make judgments that are appropriate for the circumstances in Western Australia. We are taking responsibility for the spending growth trajectory at the Federal level and the spending growth trajectory that we inherited from Labor on top of massive debt and deficits in their first six Budgets was unsustainable.
Journalist: Do you think that there is any merit in exploring the broadening of the GST base?
Mathias Cormann: We were very clear in the lead up to the last election, we will not be initiating any changes to the GST, full stop, end of story. We have delivered a Budget that builds a stronger, more prosperous, more resilient economy which starts to repair the Budget mess that we have inherited as we said we would do and which keeps faith with the commitments that we made at the last election.
Journalist: Is it the case that as far as the Abbott Government is concerned, any GST reform is a matter for the States and you've got no involvement with it?
Mathias Cormann: Well we've been very clear that we would not be initiating any changes to the GST in this term of Government. We have also said that we would have a review of the tax system. We are also having the review of the Federal-State financial relations arrangements as part of a broader review into our Federation. There are going to be a range of conversations to be had in the next couple of years and we will have them in a calm, orderly, methodical and careful fashion.
Journalist: Speaking of the Federation and as a Western Australian Senator, is the fact that WA looks likely to get a larger ownership of browse gas a good outcome for the State?
Mathias Cormann: Obviously what is happening to our north in terms of gas exploration and production is very exciting. There is lots of opportunity there moving forward and obviously as a Western Australian I'm always happy to see the economic benefits for Western Australia maximised.
Journalist: Even though it means potentially less revenue to the sphere of government you look after going forward?
Mathias Cormann: I think we are now getting way beyond what are implications out of this Budget. Any other questions on the Budget?
Thank you very much.