AM with Michael Bissenden

Interview

PFI014/2016

08 April 2016

Topics: Victorian infrastructure, Arrium

Michael Brissenden: Paul Fletcher, good morning.

Minister Fletcher: Good morning Michael

Michael Brissenden: So initially the Abbott Government said it wanted the money back if it wasn't used for the East West Link or another nationally significant project. Why the change of heart?

Minister Fletcher: Well the Turnbull Government is committing $1.5 billion to a wide range of infrastructure projects in Victoria. There has been $1.5 billion sitting in a Victorian government bank account for too long and we need to get that money applied to major projects like the Monash Freeway, widening the Monash Freeway. And we have said today that we will commit $500 million to be matched dollar-for-dollar by the Victorian government for a $1 billion upgrade of the Monash Freeway.

We have also announced that we would provide $350 million towards an upgrade of the M80 orbital road around Melbourne. $220 million towards a $440 million Murray Basin freight rail plan, which would upgrade hundreds of kilometres of rail lines in the Murray Basin. So this is all about delivering the infrastructure that Victorians need, that Australians need, to make our cities more liveable and to make our economy more productive. That money should be applied to building infrastructure in Victoria rather than sitting in a Victorian government bank account.

Michael Brissenden: But it is a distinct change of policy from the previous one with the Abbott government held.

Minister Fletcher: Well what we need to do is get agreement with the Andrews government about getting infrastructure underway in Victoria. So Prime Minister Turnbull will be writing to Premier Andrews with this offer.

Michael Brissenden: It's a considerable amount of money. A lot of it is going to be spent in marginal suburban seats in Melbourne. Any coincidence that there is an election around the corner?

Minister Fletcher: Look this money is being spent on a range of projects critical to productivity, efficiency liveability of cities. For example the M80 ring-road. There would be three additional segments that would be upgraded to freeway standard. This is a vital road to allow freight to move efficiently around Melbourne, to allow people to move around as quickly as possible. The Monash Freeway—

Michael Brissenden: [inaudible]— Distributor though?

Minister Fletcher: We believe the Western Distributor is a project that would be well suited to an innovative financing approach. For example in New South Wales, the Turnbull Government has provided a concessional loan to allow a motorway project there, Westconnex, to proceed. We believe that the Western Distributor project in Melbourne would be well suited to a similar approach because it is linked to a significant tolling revenue stream. We've had some discussions with the Victorian government about that and once they conclude their negotiations with Transurban we look forward to a more detailed discussion about whether we can provide support through that kind of innovative financing mechanism. In the meantime we want to get $1.5 billion to work on vital infrastructure for Melbourne and for Victoria. There is also $345 million for a regional roads package and $75 million to support projects which relieve congestion in urban Melbourne. Congestion is a significant issue in all of our cities. This package, this offer that we are making to the Andrews government today, is about getting on top of congestion, about improving productivity, making our cities more liveable and supporting economic growth.

Michael Brissenden: Can we turn to the problem of the steel industry? Clearly a very big problem for the nation. Should the Government intervene to protect the Industry?

Minister Fletcher: Well over the last few days, the Government has been working with the banks and with Arrium, to bring both parties closer together, with a view to brokering an outcome that would see Arrium's businesses remain fully operational.

Michael Brissenden: But what does that mean though? Spending money to keep the industry afloat?

Minister Fletcher: Well my colleague Industry Minister Christopher Pyne is leading that work. Very importantly the administrator Grant Thornton has confirmed that Arrium's operations will not be impacted at this time, and are continuing to trade on a business as usual basis. That is an important area of work that the Industry Minister Christopher Pyne is leading. But at the same time the Turnbull Government is working to boost jobs and growth across a whole range of areas including this $1.5 billion infrastructure commitment in Victoria. We look forward to working constructively with the Andrews Government in relation to the range of projects that we have indicated today, that the Turnbull Government stands ready to finance and support.

Michael Brissenden: But you've already fast-tracked the Tarcoola rail project, which is worth $80 million to help use some steel. Now clearly—are there other projects you could fast-track? Are you looking for some other projects?

Minister Fletcher: You're right in relation to the Tarcoola project. This is the east-west rail link between Adelaide and Tarcoola. We expect that will involve sales of $80 million to Arrium for the steel that's required for that rail work. So that is one area where the Government has been working—

Michael Brissenden: But they say they need another $100–$120 million worth of projects to stay afloat.

Minister Fletcher: Look I'll leave detailed comments on that to my colleague Industry Minister Christopher Pyne who is leading this important work on behalf of the Government.

Michael Brissenden: Is this a matter of national importance, of national interest and security? Because there is a suggestion from Kim Carr, from the opposition, saying that Australian steel, suggesting Australian steel is better than imported steel and that using inferior steel could cause a catastrophe.

Minister Fletcher: Well I think those are two quite separate issues. But I will leave it to Industry Minister Christopher Pyne to put the Government's position in relation to that. The point that I make is that across a whole range of areas, the Turnbull Government is working to deliver jobs and growth for Australians.

Michael Brissenden: I guess the question is we've got potentially 8,000 jobs likely to be lost if the Wyalla factory closes.

Minister Fletcher: And of course that is an issue that the Turnbull Government is taking very seriously. Which is why Industry Minister Christopher Pyne is leading the Government's engagement on this issue. We've been focussed on working with the banks and with Arrium, to bring both parties closer together, and very importantly the administrator has confirmed that Arrium's operations will not be impacted at this time, will continue to trade on a business as usual basis. Industry Minister Christopher Pyne is fully focussed on this issue.

Michael Brissenden: Paul Fletcher we'll leave it there, thanks for joining us

Minister Fletcher: Thanks Michael.