774 ABC Melbourne Drive
14 March 2016
Topic: Road pricing, Melbourne Metro funding, the upcoming election
Rafael Epstein: It's been recommended by so many people but not by politicians so all of the people who look at the roads say yeah let's start charging people for using roads at their busiest, make it cheaper when they are at their least used, that's the right way to do it, not rego and not tolls, the same price at every time of the day. Of course no politician really wants to introduce that idea, such a radical change, however we're taking one small step in that direction. Paul Fletcher joins us; he is part of Malcolm Turnbull's government, territories minister, local government and major projects as well.
Paul Fletcher, good afternoon.
Paul Fletcher: Good afternoon, Raf.
Rafael Epstein: What's the little step we're taking?
Paul Fletcher: Well the Infrastructure Australia 15 year plan, which came out three weeks ago, had a whole host of recommendations, one of which was that we should look at this question of road pricing and this idea that, rather than paying for roads as we all do today through, for example, the fuel excise, which raises about $15 billion a year and we're paying 40 cents or so per litre every time we fill up at the pump, or motor vehicle registration which across all the states generates about $5 billion a year, that we should look at a different way of paying which for example might be a charge per kilometre that you travel in substitution for replacing the existing ways that we pay. Now what both Prime Minister Turnbull and I said in responding to the report was look if we were to go down this path, it's probably a 10 to 15 year journey but the specific recommendation from Infrastructure Australia was we ought to do a more detailed study of what road pricing might look like, what the system might look like, what it would mean in terms of fairness for example between people who live close to the city, people who live in the suburbs, people in the cities versus people in the bush, these are all the kinds of issues we'd need to work through. You talked in your introduction about the notion of pricing different price at different times of the day, what in the economic jargon is sometimes called congestion pricing. Now one of the questions we'd need to look at is or this detailed study would need to look at it is what exactly would be the pricing system, because you- one option is what you've described but it's not necessarily …
Rafael Epstein: Not the only one.
Paul Fletcher: Not the only one, that's right.
Rafael Epstein: But it seems that most often when we discuss this, somebody who needs to travel on a busy freeway would often end up paying a bit more, yet someone who lives out in the country, outside of a major city, they might live near a big regional centre but they live outside of a major city, they might do many, many more kilometres but they would end up paying less. That often seems to be the direction road pricing heads in. Does it always end up with those rough impacts do you think?
Paul Fletcher: Well you're asking exactly the questions of detail that would need to be determined so that there was a specific proposal that could be considered. For example, you talk about people in the country who typically are travelling more kilometres than people in the city, now one thing you could do is have a pricing structure which says for example first X number of kilometres that you do in a country area is at a certain price, after that it drops down to a lower price. These are all possibilities that would have to be satisfied if we were to proceed with this. You would also need to be satisfied that it was fairer, that it would reduce congestion, and that it would give us better roads. If it didn't meet those tests, then it would be hard to make the case for doing it.
Rafael Epstein: But isn't the big thing that we need- and it doesn't really matter what mode of transport we're talking about, you federally, here in the state as well, we need more money to pay for more roads and more rail and people are likely to resist paying for more so if you switch a system, the bigger question is going to be whether or not we pay more collectively and you're not going to be able to change that are you? People are kind of- they've hit their limit on tax haven't they?
Paul Fletcher: Well certainly if you look at all of the expert reports over the past few years that have recommended this, the Harper Review into competition for example, the Henry Review on tax which talked about this five or six years ago, the Productivity Commission report on public infrastructure which reported in 2014, and a lot of reviews have recommended this direction, it tends to be on the basis of saying this needs to be in substitution for the existing ways that we pay for roads. But look, there's a lot of money going into infrastructure. The Turnbull Government is spending $50 billion through to 2019–20 on a whole range of projects, working with state governments, the Andrews Government in Victoria, Governments all around Victoria and that's important, that won't stop. Also Infrastructure Australia are looking at the question—the way we pay for roads in particular, is it worth looking at different approaches, would there be benefits in terms of reduced congestion, is it fairer, does it give us better roads, so those are questions that the Government will now consider whether we want to have this more detailed study that Infrastructure Australia's recommended and that's something we're giving some thought to now.
Rafael Epstein: So can I ask this question, that's coming through a bit on the text, Paul Fletcher, you're a minister in Malcolm Turnbull's government, we're going to have an election in the next few months, I won't get into when yet, what's the point of talking about this if it's ten years away, if you're facing an election, you're likely not to be the person to ever have to make a decision.
Paul Fletcher: Well because Infrastructure Australia has come forward with a set of recommendations to government as part of its 15 year infrastructure plan, we will respond to those recommendations in due course, it is- you know, infrastructure has long lead times, the capital sums involved are large and responsible governments need to plan not just for the next six months or one year but we do need to be planning 10 years, 20 years out and that's absolutely what we're doing.
Rafael Epstein: Do you think the Turnbull Government's going to give Daniel Andrews government money for the Metro Rail Project? It's going to cost billions.
Paul Fletcher: Well certainly Transport and Infrastructure Minister Darren Chester and I had a meeting with the state minister Jacinta Allen a couple of weeks ago in Canberra, and a business case has been lodged with the Commonwealth by the Victorian Government in relation to Melbourne Metro.
Rafael Epstein: Okay let me ask you perhaps a question that is easier to give an answer to because you're not going to tell me today whether or not the money's coming. Will Victoria know by the Federal Budget whether or not there is money in the four years for Metro Rail from the Federal Government?
Paul Fletcher: Well again, what we need to do is assess the business case that the Victorian Government has put forward for Melbourne Metro, we'll do that, we'll go through our process with Infrastructure Australia which assesses the business case, and it will provide expert advice to the Commonwealth Government.
Rafael Epstein: Sure. That's not quite an answer though I mean is it unreasonable for me to ask you if we'll get an answer in the budget?
Paul Fletcher: Well look I'm not going to foreshadow what's in the budget on that issue or anything else what I will say is we have a proper process to consider that infrastructure proposal and many others which are coming to the Commonwealth Government from the Victorian Government and from state and territory governments around the country as we work together collectively to meet the infrastructure needs of our growing community.
Rafael Epstein: Just in a general policy sense as part of Malcolm Turnbull's Government, Paul Fletcher, do you feel a little naked? You've got no economic policies to talk about around tax, Labor's got substantial policies to talk about, I don't know if that is a problem in the long term, is it a problem right now that you have less in terms of new ideas to speak about?
Paul Fletcher: Look I wouldn't agree with characterisation at all. Across the whole gamut there's a whole range of ideas and policies that the Turnbull Government is taking forward. We had the Innovation Statement just before Christmas, we've just released the Defence White Paper, I've just been talking to you about a specific policy idea, so there's a whole range …
Rafael Epstein: [Interrupts] Now are they the same as budget measures?
Paul Fletcher: Well, there's a whole range of measures that we're taking forward and we will obviously when we release the budget be releasing specific measures at that time as you would expect us to do.
Rafael Epstein: You busy on 2 July?
Paul Fletcher: Politicians are always busy, that's what the community would expect of us. I infer Raf, that that's a question about election timing.
Rafael Epstein: I just want to know if you've booked- if you've filled up the diary with non-election related matters on 2 July.
Paul Fletcher: I will give you the answer which is that is a matter for the Prime Minister and he will let us all know in due course.
Rafael Epstein: One more question- I might get an honest answer on this one, not that you haven't been honest. But the polls are kind of going both directions- so I'm hoping that if I'm asking you this question, do you get affected, I'm not asking you to respond to any particular poll but surely you must have an emotional response when the polls head up or down.
Paul Fletcher: As you know, Raf, you've heard politicians say it to you many times before, there's only one poll that counts and the reality is that polls do move around, this is more than a game. What we do is very, very serious because we are seeking to deliver outcomes for the Australian people and the Australian people give us a very direct assessment of how we're performing every three years. That's as it should be, you do need to have a focus on the key objectives, which in the case of the Turnbull Government are economic growth, driving jobs and delivering growth through being innovative and competitive. We are in a very competitive world, Australia is well-positioned, but we need to stay competitive. That's why we're focussed on productivity and efficiency including through infrastructure. That's why we're focussed on innovation and that's why we're focussed on jobs and economic growth.
Rafael Epstein: Thanks for joining us.
Paul Fletcher: Thanks Raf.