Transcript of Interview: 774 ABC Melbourne Drive Program with Rafael Epstein

Interview

BPC008/2015

12 March 2015

E&OE

Rafael Epstein: Jamie Briggs is the Assistant Minister for Infrastructure. Jamie Briggs, good afternoon.

Jamie Briggs: G'day Raf.

Rafael Epstein: Does Daniel Andrews have a point on promises and broken promises?

Jamie Briggs: Well we promised this road at the last election, so if we backed away you would argue to us I'm sure that we were backing away from a promise we'd committed to. And I think Michael Sukkar out in Deakin, and Alan Tudge, Jason Wood, and Tony Smith, all in eastern Melbourne seats, would all say to you that they think it was a contributing factor to their election at the last election. So I think as far as our commitment goes, we've been very clear, we made a commitment to $1.5 billion to this project, and $1.5 billion to the second stage, which you might remember is the stage of course which a Labor Party themselves proposed.

Rafael Epstein: Access from the West.

Jamie Briggs: Absolutely. So, we think this is a really important part of Melbourne's infrastructure needs, but importantly-

Rafael Epstein: [Interrupts] Can I ask you though Jamie Briggs.

Jamie Briggs: Sure.

Rafael Epstein: Would you agree that you're asking Daniel Andrews to break an election promise?

Jamie Briggs: Well either way, Raf, he breaks an election promise. Because he said before the election there was no contract, that he won't have to make any payments. And clearly, already, he's admitted that's not true.

Rafael Epstein: He didn't say there wasn't a contract, he said the contract was not worth much.

Jamie Briggs: No, he's still arguing in the negotiations through his negotiator, that there is no contract. So, either way, Daniel Andrews breaks an election commitment here. He promised not to pay any compensation, now he has to through one mechanism or another, or he legislates away the rights of this consortium. Now, if he does that, that's the first time in our history a government has done that. That's a very, very serious step. And that's what's seen the letter from the Prime Minister being written. Because we're obviously the national government and we care very much about the position of the national economy. This will damage not just Victoria, but the rest of the country. It will probably mean Victoria loses its AAA credit rating, it will mean people will lose jobs-

Rafael Epstein: [Interrupts] It doesn't necessarily mean the loss of the credit rating.

Jamie Briggs: Well look, I think you will see the sovereign risk issues raised in a very significant way. And we've had a major infrastructure investment magazine last Friday, with the headline of ‘Can you trust Australia’?

Rafael Epstein: But you can interpret that- I mean, there are just people who want to build things, just trying to have a go at the government. But let me ask you this question-

Jamie Briggs: No well I don't think that's a fair representation of what they're saying.

Rafael Epstein: Well it's essentially an opinion though, that magazine article, isn't it. It's one opinion from someone who wants to build things. That doesn't necessarily mean something's going to happen.

Jamie Briggs: Well no, I don't think, again, you've got companies who are approaching both the Federal Government and other state governments saying is this the normal behaviour of governments? Because, and here's a consequence Raf, Daniel Andrews says he wants to build Melbourne Metro. Now that's a perfectly reasonable ambition. He wants to do that from 2018 onwards if his ambitious plans are met. To get that funded, he's going to need significant international finance. If he goes ahead and legislates away the rights of these companies, he will put at risk the capacity for international finance to be part of that project, because they just won't want to be part of it.

Rafael Epstein: Do you think it's significant that Tony Abbott committed that money before there was a business case?

Jamie Briggs: Well we committed that money… let's… let's just go back through the history of this. Sir Rod Eddington put together a report back in 2008-

Rafael Epstein: [Interrupts] Yeah no, I don't- we've had a few discussions about this though Jamie Briggs.

Jamie Briggs: We have.

Rafael Epstein: I think we can agree there was no complete business case when the Prime- when Tony Abbott was Opposition Leader, and he committed the money. Is it fair to raise that as an issue in this discussion, to commit funds without a proper business case?

Jamie Briggs: Well look, in the end the business case was put together, and it was a sound business case. It had a BCR over- well over $1, and in that sense…

Rafael Epstein: It was a fairly broad business case.

Jamie Briggs: Well, it has very broad benefits. At the end of the day you need another east-west crossing in Melbourne. And adding stage two in, which the BCR didn't include I might add, does make the project even more attractive.

Rafael Epstein: But can I take you back to that question: is it important that Tony Abbott committed without a business case? Because your policy was anything over a hundred million should have a business case; this was an exception. Is that a fair point to raise?

Jamie Briggs: No, our policy was that anything over a hundred million needed to go through Infrastructure Australia.

Rafael Epstein: Okay.

Jamie Briggs: And so everything over a hundred million is going through Infrastructure Australia for assessment. And that's a promise that we've committed to and we're following. But at the end of the day-

Rafael Epstein: [Interrupts] But that wasn't- is it fair for me to say that was not followed in this case? Because there was no business case when the Prime Minister committed.

Jamie Briggs: No, it went through Infrastructure Australia, as we require it to. But at the end of the day, state governments make decisions about what their priorities are. And in that sense, at the time, that was the priority of the Victorian Government. The point now Raf, is that if this contract hadn't of been signed, Daniel Andrews would have every right—although we would disagree with him—he would have every right to say: we've moved on, we've got this other project we want to pursue. Now, there are a couple of points here. There is a contract, and it is legally binding, and it is significant. And secondly, there is no other project in Victoria at this time which can create the 7000 jobs we want to be created, and are created through these projects.

Rafael Epstein: Okay.

Jamie Briggs: So that's the point here. The Melbourne Metro project which Daniel Andrews points to as his priority, would not even begin, under his ambitious plan he released a couple of weeks ago, until at least 2018.

Rafael Epstein: Although they have started spending money now. But I don't want to quibble about that. One other question, and I'm not sure that this is directly your responsibility.

Jamie Briggs: Sure.

Rafael Epstein: In fact it isn't. But, the letter signed by the then-Treasure, Michael O'Brien, certainly entrenches the legal power of that contract. Was that an unfair thing to do? Because it put this government in a very—the current government—in a very tough position.

Jamie Briggs: No, governments sign contracts with companies, companies want surety that they've got their legal rights protected.

Rafael Epstein: Didn't have to sign the side letter though, did they?

Jamie Briggs: Well, the Victorian Government would have operated on the advice of the Victorian public service. And I think the Victorian public service, from my impressions, have been very professional in the advice that they would have given, and I'm sure the treasurer of the day would have received that advice.

Rafael Epstein: Okay.

Jamie Briggs: In the end though, you must accept that to override a contract through legislation is an extraordinary step, and it does have significant consequences. And we don't think Daniel Andrews, in a calmer moment should go ahead with this. Because it will cause all sorts of problems—not just for Victoria, but for the national economy.

Rafael Epstein: Look, I'll get to your calls in a moment. 1300222774 is the phone number. We're also going to actually have a word to Anthony Albanese, who I think called in on the talkback line because he's been in Melbourne, heard the radio, and called in. So I'll get to him a moment as well. But Jamie Briggs, I can't resist asking you this question. Forgive me.

Jamie Briggs: [Laughs] I always do Raf.

Rafael Epstein: I know. You've had a large number of policy reversals—the dole- no dole for six months for young people, paid parental leave, the Medicare co-payment, Defence pay, the motor industry money, the Army pay, 18C, potentially on pensions—you seem to be unwinding, as a government, practically everything you set out to do last year. Is that fair call? Because it looks like that?

Jamie Briggs: Well no, but we're being realistic, and many of these measures are measures that are struggling to get the support of the Senate. And the Senate is quite a… is in effect controlled by middle benchers, which are quite diverse in their opinions on different policy issues.

Rafael Epstein: But if you're a Lib- if you're a Coalition voter, you could be forgiven for not really knowing what the Coalition stands for right now, federally.

Jamie Briggs: No, as was very clearly outlined last week in the Intergeneration Report released by the Treasurer, we have a significant challenge on the fiscal side of the economy, and on the general economy we want to put in place policies which help it grow more, which includes the infrastructure spending. So we are being consistent in that respect. Sure, some of the measures we pursued in the Budget last year haven't met the success that we were hoping, and some of them have been badly argued, no doubt. But we don't resile from the fact that we have a major fiscal challenge which we're trying to address, and if we don't we will, in the end, end up with a debt and deficit situation which is far more difficult in the future and will mean much harder decisions down the track.

Rafael Epstein: Jamie Briggs, thanks for your time.

Jamie Briggs: Thank you Raf.