Transcript of Interview: SKY News Richo

Interview

BPC062/2014

13 August 2014

E&OE

Graham Richardson: A few hours ago I spoke to Jamie Briggs. He's one of those…there's actually probably three or four of them in that Federal Parliament…who really are very talented and who are on a trajectory that just goes straight up. He's the Assistant Minister for Infrastructure. This bloke is really good. Now, as I said, it's not dinner time conversation. This is not what you talk about every night but if you think about it, for the importance of the economy in Australia, for how we get our productivity up, I doubt there's a more important question, so I went into some depth with him. Have a look at this.

Okay, Jamie Briggs, welcome to the programme.

Jamie Briggs: Thank you, Graham.

Graham Richardson: Now Assistant Minister for Infrastructure, you're in charge of it all. The more I read, and there were articles in the Fairfax press today, actually, there's so much trouble with the quoting on our infrastructure projects, particularly in all those tunnels. Are you building anymore tunnels and will we know what sort of traffic will be on them?

Jamie Briggs: Well, that is a challenge, and you've seen examples in the past where the estimates or the patronage estimates have been wrong, and that's one of the reasons that the private sector is reluctant to invest in new greenfield infrastructure. You've seen the models playing out in Sydney with WestConnex and East West Link where the Government's taking much more of the risk upfront, the patronage risk upfront. One of the things we're trying to do, Graham, to help address this and to get more infrastructure spending is the asset recycling initiative, because what we know is that there's a great appetite from the investment community for brownfield assets, existing assets, and we want to use that money or allow the states to use that money to build new assets.

That is why it is so befuddling that the Labor Party is trying to stop the Commonwealth's contribution to new roads and new rail across the country through the asset recycling initiative, and it's a great…it's been greatly welcomed across the country by the investment community and, in fact, globally. When I was at the B20 just three weeks ago hosting a roundtable, it was the most welcomed initiative that the Government has put forward. So I hope that the Labor Party MPs in seats where they'll see the benefit of these new roads and new rail projects, because of the asset recycling initiative, start to lobby their leadership about the insanity of the position they've taken in opposing this in the Senate.

Graham Richardson: Certainly there needs to be a great deal of infrastructure spending, but then it depends on priorities, and I'm wondering what yours are. I mean, as an ordinary punter who drives around the place, one thing I note is that I won't get an early morning plane into Melbourne because while they might have the Tullamarine Freeway, it's a shocker and it takes you forever to get to town if you land at Melbourne Airport at 8 o'clock and get in a cab, good luck, you know. Quarter past, half past nine before you're in.

Now, I note the only place where there seems to be infrastructure that works in getting rid of traffic in a big way is in Brisbane where those tunnels seem to have worked quite brilliantly. Is there any chance of doing that anywhere else because it seems to me that Sydney and Melbourne are debacles? Can you do anything about that?

Jamie Briggs: I think the first thing, if you look at the Brisbane tunnels, of course, they're an example where the private sector didn't necessarily get the numbers right and there's been some challenges with the financing of those tunnels but, as you say, as far as the commuter is concerned, the new infrastructure is fantastic and makes the city a lot more effective and efficient. So again, it gets back to getting the model right in the first place. Certainly the WestConnex plan, particularly with the opportunities that the asset recycling initiative provides to directly connect it between the city and the airport which the New South Wales Government's now looking at, will absolutely ensure you get a better outcome from the airport than what you've got at the moment.

Equally in Melbourne, if you get the upgrades, the East West proposal will make travel around Melbourne a lot more effective and efficient, and there are proposals around from the Victorian Government to look at the Tullamarine Freeway to expand its capacity as well. The point you make is right, Graham. At the end of the day, this is a really important economic reform for the country. Investing properly in infrastructure will lift our productivity. It will ensure that we can move around our cities much more effectively.

If you think about plumbers, for instance, who go between one job and another each day, if they can get throughout the cities much more effectively and efficiently, they can get to more work. That is, in essence, what productivity is. That will mean they'll get to more jobs and that'll mean that they earn more and they're able to grow their business, which is exactly what the Government is trying to put in place.

Graham Richardson: We all want that, but I guess it's a question of what the priorities are. I mean, it seems to me that my priority as a punter is getting into work on time, and I've got to cross the city to get over here to Sky, and sometimes it's well near impossible. I have to time my runs. But that's one priority. It would seem to me, though, if I'm looking at Australia's economy and I'm saying what's the thing we've got to fix most, would it not be port access?

Jamie Briggs: This is where we want Infrastructure Australia to work with the states on putting in place a 15 year plan about what it is that we need over the next 15 years and where we need it, because you're right, there are various needs and there's limited capacity for State and Federal Governments to meet those needs. So we have to find new ways to fund it, we have to get the decision making around what we're funding in the first place much better. The Productivity Commission report tells us that. It tells us that the choices we've made haven't been the right choices in the past and, therefore, we're spending more than we ought to on infrastructure. So we've got to get those processes better.

But at the end of the day, it is a mixture of infrastructure that will help make our cities work better and that will mean that our airports work better and that our ports work better, absolutely. And that involves freight rail as well. It involves intermodal terminals, getting a large amount of freight off suburban roads and getting onto rail or onto dedicated freight routes. That's the sort of reform which will help lift productivity and that's exactly what we're working on with the state governments around the country and try…

Graham Richardson: With that priority, is there more that should be spent on rail than road? I mean, people like me are worried about [audio skips] because I've got to get to work and all the rest of it, but anyone looking at the economy, and I'm saying what's best for us—rail, surely, when it comes to all that freight, is much better for us, but it seems to me that the trucks are getting more of the business and not less.

Jamie Briggs: It's horses for courses in some ways. I mean, you can get rail to hubs. It's harder to get rail around, to get freight around cities on rail. You can, of course, move it interstate efficiently on rail, and if you, I think, provide the framework, particularly the private sector will invest more heavily in rail. We are looking at, of course, one of our plans in the Budget. We've got $300 million allocated to the first stages of inland rail, which would connect Brisbane and Melbourne and, again, that's an important project for us to consider.

But in the end, what we should be doing is looking firstly at what is the absolute need for the economy and road, remember, carries a lot of freight, it carries a lot of commuters, it carries a lot of public transport. 50 per cent of public transport miles in Australia are delivered by roads on buses. So we need a better road network. At the same time, we need to create the framework certainly for a better freight network as well. So we are trying to get that balance right.

Graham Richardson: But one of the problems with that balance is always going to be whether the Federal Government can find agreement with the states easily and it doesn't matter whether they're Liberal states or Labor states, there always seems to be a drama.

Jamie Briggs: I must say that working with the states, even with Stephen Mulligan who's the South Australian Labor Infrastructure Minister, has been pretty good in my first 12 months in this job. The states have got the same pressures from their community as what obviously the Federal Government has. We've got more of a macro view about the economy of course. But the states are getting pressure from their communities about delivering more infrastructure, better commuter [audio skips] throughout the major cities and also ensuring that they're lifting their economic activity and infrastructure plays a major role in that.

So I think the states are in a good space. I must say that it is being led by New South Wales. Mike Baird and Duncan Gay are outstanding in their attitude to reform, the way that they're trying to implement infrastructure, and the other states are following that lead if I can put it that way and certainly working through this productivity commission recommendations. The states are very eager to improve the way that they deliver infrastructure because we all want to get more out of the limited or the finite amount of taxpayers' money that's available.

Graham Richardson: Indeed we do. Now how much is in the Budget for infrastructure?

Jamie Briggs: Fifty billion dollars over the next five years we've allocated to [indistinct] infrastructure.

Graham Richardson: Let's look at that fifty. What happens if, as it seems to me you're lucky to get half the budget through, in fact you'd be lucky to get 40 per cent through with the way it's looking…What happens to your 50 billion over the next five years?

Jamie Briggs: Well, the vast bulk of it is already in place because it's through appropriation bills but there is an element of it which is being held up at the moment. I referred to this earlier and that's the asset recycling initiative. Now, the reason given by the Labor Party is that they claim that they want further transparency on sales of state assets. The asset recycling initiative, to remind you viewers, is where we're saying to states we want you to look at your brownfield assets, the existing assets that you own, whether you can sell them to use that money, just like they have here in New South Wales to put into new productivity lifting infrastructure and if they do that they spend that money from those sales on that infrastructure—we'll pay them a 15 per cent bonus in effect.

Now what the Labor Party want to do is…they've put in an amendment to this legislation in the Senate which says that they should be able to disallow if they don't like the decision of the State Government to privatise an asset, they should be able to disallow the Federal Government paying that 15 per cent bonus. It's quite absurd. You think about the actual application of this. The New South Wales Government has said that they'll take the privatisation of electricity assets to the election. If they get support at that election next March to do that and use that money on productivity lifting infrastructure from that sale, the Labor Party in the Senate think it's a good idea for them to then be able to say well we don't like that…even if the New South Wales people have said otherwise.. we don't like that and you can't get your bonus now.

What that will mean in effect is that that additional new infrastructure won't get delivered. The additional tunnel crossing of the harbour here in Sydney, the public transport infrastructure in Victoria to link the airport with the city, these are all projects which can be delivered because of the asset recycling initiative. That's all at risk because of this silly juvenile smart-alec tactic frankly in the Senate and it really does speak to exactly what the Labor Party did in their six years in government. This silly politicking, this silly tactic that they're using to create politics rather than actually think about what is in the best interest of the Australian economy and the Australian people.

Graham Richardson: Well, I've got to say I can't categorise opposing parts of this Budget as just being politics. I think some of these budgets are eminently opposable and I'm strongly opposed to quite a few of them…

Jamie Briggs: Sure.

Graham Richardson: But obviously these infrastructure ones are the keys. You're talking about how the politics is holding it back but—as a last question—wouldn't the other problem be that those failures with the tunnels that keep going broke and there are new owners every half an hour, the airport rail link in Sydney. The private/public partnerships just don't seem to work.

Jamie Briggs: In some cases they do. I saw last week The Age newspaper criticising Transurban for making too much money last year. Transurban's a toll road operator, so some of them obviously work. You know that Fairfax, in some quarters, doesn't think that a private company making money's a good idea. It's a fascinating study.

Graham Richardson: I've got no objection to profit, trust me. None whatsoever.

Jamie Briggs: I know you don't Richo but it seems to be a strange line of attack to be criticising a company for doing well. Look, some of the projects work well, some of them haven't worked so well but that happens in business more broadly as you understand…

Graham Richardson: I do indeed.

Jamie Briggs: You know the reality is that you learn from the experiences where there's been mistakes and there's been some mistakes made on [indistinct] models and the investment regime around some of these projects, but the reality is some are successful and we will work with the State Government and private sector to put in place projects where we can make them more successful in the future because the Federal and State Government do not have the capacity to meet the infrastructure need that Australia has alone. We need the private sector involved for their capital and for their innovation. Delivering new greenfield pieces of infrastructure is expensive, they're risky but they're very important and that's why we're looking at a range of measures like de-risking projects by taking a stake early on, like the asset recycling initiative encouraging investment in brownfields to use that money for greenfield assets. All of it's designed to create jobs, to create high productivity and a stronger economy and that's exactly what our focus in infrastructure is all about.

Graham Richardson: Well, then you'll have to hope you get all that money in the Budget and you're able to do it. Jamie Briggs, I've got to leave it there but once again thank you very much for your time.

Jamie Briggs: Great pleasure Graham, thank you.

Graham Richardson: He does know what he's talking about this bloke but I'll tell you what, it's not going to be easy (a) to get the money through the budget, but (b) this whole idea about the private sector jumping into some of these projects. They are very reluctant because a lot of them lose money, a lot of them go broke too early. Now this de-risking is a good idea but there's got to be a hell of a lot more of it before some of these projects get off the ground.