Transcript—Sky News Live, PVO News Day with Kristina Keneally

Interview

PFI026/2016

04 October 2016

Topics: Infrastructure Victoria report

Kristina Keneally: Well, off the back of that report, this is a good time as any to bring in the Minister for Urban Infrastructure Paul Fletcher, joining me out of Canberra. Minister Fletcher, thanks for coming on the program.

Paul Fletcher: Good to be with you, Kristina.

Kristina Keneally: Well, I'm sure that you, your office, and perhaps the Victorian Liberal Opposition were scanning that report to see any mention of the East West Link. Victorian- Infrastructure Victoria Chief Executive Michael Mason said he was absolutely not ruling it out, and urged the Government to plan for its potential construction. Surely you must welcome that recommendation?

Paul Fletcher: Well, certainly I think this Infrastructure Victoria report does underline the importance of the East West Link, a project of course where contracts that have been entered into prior to the Andrews Government coming to power and then the Andrews Labor Government cancelled those contracts and has ended up spending more than a billion dollars of Victorian taxpayers' money to essentially pay the companies that had been contracted to build the road to go away. So for over a billion dollars, nothing has been built and the vitally-needed transport link has not been constructed. So it's been a very sorry tale of mismanagement by the Andrews Labor Government in Victoria.

But look, can I say, I think this Infrastructure Victoria report is part of what's an important trend in infrastructure policy in Australia. We've got Infrastructure Australia at the national level. We've got Infrastructure Victoria, Infrastructure New South Wales, Building Queensland. So at both federal and state levels, we've got these independent bodies which are charged with trying to think longer term, recognising that infrastructure projects are very expensive; they take a long time to build, but if you get them right, they're going to deliver benefits for a long time as well. So I think in the broad, these are good processes. Of course, there's a lot to debate about the specific merits of individual recommendations.

Kristina Keneally: Well, there is a fair bit to debate in this, as you say. It's a long term report, looks out to 2046 horizon, and in many ways is sort of a wish list of $100 billion of infrastructure. I'm sure one thing voters will be looking at; motorists will be looking at is the recommendation to use a transport pricing scheme. Levies, $2 one way, $3 another if you're accessing the CBD or suburbs. Is that something that State Governments do have to consider as part of their infrastructure funding, looking into the future?

Paul Fletcher: Well, it certainly is very much a State Government issue. It's a matter for the Victorian Government to consider. As the report notes, there are such charges in a few cities around the world—cities like Singapore and London—they have been pretty controversial when they've been introduced, and really it's important to note the report I think uses the language of congestion charging or pricing. So they're typically things that are looked at only in the context of very densely populated central city areas. But really, that would be a matter for the Victorian Government to consider as to whether they saw any merit in it.

Kristina Keneally: Well then, just explain to our viewers the role that Infrastructure Australia and your office would play in the context of a report like this. It'll be tabled in December. The Andrews Government has until next year, I understand, to respond to it. Do you- does your Government, and does your infrastructure body give any type of formal feedback to this process?

Paul Fletcher: Well look, we certainly welcome and encourage State Governments establishing these sorts of processes. If you look at the amount of funding that the Commonwealth is putting into infrastructure in Victoria, there's a lot of money that we've put on the table. Of course, we offered $3 billion for East West Link, and that money is still there should any Victorian Government choose to proceed with that vitally-needed project. Just in April this year, Prime Minister Turnbull announced a $1.5 billion Victorian Infrastructure Commitment for- and we included as part of that to bu- a $1 billion package to improve, to widen the Monash Freeway along a considerable length. We said we'd put in $500 million of Commonwealth money if the State Government put in 500 million of state money. So there's a lot of Commonwealth money going into Victoria.

Kristina Keneally: But surely Infrastructure Australia must then receive a report like this and feed that into their discussions, their planning, their plans for the future. I mean, otherwise we just have parallel reports occurring but never intersecting.

Paul Fletcher: Sure. The point I'm making is that as we come to specific decisions about projects to support, then from a Federal Government point of view, we certainly want to look at the underlying analysis, including analysis done by the state infrastructure bodies as well as the federal body Infrastructure Australia. The other thing I'd say is there is good, regular, close engagement between Infrastructure Australia and the state bodies, including Infrastructure Victoria, and so what is important at both state and federal levels is that we have good analysis that underpins the cases that come forward to secure funding for particular projects. So certainly this report I have no doubt that some of the analyses that's part of it is going to be coming forward in various ways to certainly the Victorian State Government but also the Turnbull Government federally as particular projects are put forward and considered.

Kristina Keneally: Well let me ask you this then, these types of infrastructure bodies, they do take that longer term consideration, they're meant to be evidence based, but they're not political bodies and at the end of the day governments have to be elected and in the case of Victoria, you have a government that was elected saying we will not build the East West Link so just as an infrastructure minister, how do you describe that difference between the political will and what might be the pure policy recommendation because at the end of the day, governments are responsibly to voters and if voters don't want a project, or don't judge that it's the way they want their money spent, the Government really does have to respect that don't they?

Paul Fletcher: What we need to do is get projects delivered that meet the needs of Victorians, they meet the needs of Australians. So if there is congestion, as there certainly is on roads to the east and southeast of Melbourne, that's why we continue to think East West Link, there's a strong case for it that's why there continues to be a commitment available of $3 billion from a Commonwealth government to any Victorian government that would build it. That's why we put $500 million on the table as part of a $1.5 billion commitment to the Victorian Government that we made in April this year, so we were proposing a $1 billion package on the Monash and we were in discussions with the Victorian Government on that and on other elements of the $1.5 billion package. For example, Murray Basin freight rail, that's over $200 million of Commonwealth money available to bring in to service former broad gauge lines, turn them to standard gauge, bring in some new lines to help farmers in northern and western Victoria get their produce to market and particularly to help serve customers, export customers, particularly in Asia. The point I want to make is that many of the recommendations, many of the components of that $1.5 billion offer built on advice from either Infrastructure Australia or other specialist agencies but of course ultimately politicians are elected to make these decisions but it's important that we have the best quality advice we can have.

Kristina Keneally: Alright well before we let you go I do want to ask about the banks, they are facing the House Economics Committee today, a new law has been announced by the Turnbull Government to target rate fixing, why has the Government made this announcement before the inquiry has started?

Paul Fletcher: Well this is an important response by the Turnbull Government to an issue of considerable concern which is allegations that the major banks were involved in collusive efforts to set a key rate, the bank bill swap rate…

Kristina Keneally: But isn't that something that inquiry should have fleshed out before the Government moved to legislation?

Paul Fletcher: Well no there are multiple processes underway, in fact ASIC is also taking that matter, is pursuing that matter against several banks involved but can I make the point that this inquiry, this parliamentary inquiry which has been initiated by the Turnbull Government will for the first time involve the chief executives of the big four banks being required to front up to Parliament, to respond to questions from members of parliament, both government, opposition and crossbench about matters which are of concern for parliamentarians on behalf of the community so this is an important additional process to scrutinise the big banks and what they're doing and to weigh up the various factors that need to be balanced up here; on the one hand it's very important that we have a stable banking system, you know we didn't have retail banks collapse in Australia in the financial crisis in 2008/09 as happened in both the UK and the US. Very disruptive, very damaging, very corrosive of economic activity.

Kristina Keneally: I'm going to agree with you on that, Minister, I'm going to agree with you on that but explain to me why our banks are strong enough to withstand a global financial crisis but we can't risk them by making them face a royal commission; it just seems odd to me when I hear government ministers argue that we can't risk the stability of our banking system by subjecting it to a royal commission. Well they've already survived a global financial crisis, why would putting them through a royal commission be so damaging to them, why are they suddenly so unstable in that context?

Paul Fletcher: And we've got a whole series of mechanisms of scrutiny and accountability and we now have a very important new one: the House Economics Committee chaired by David Coleman, a respected former businessman who brings a lot of relevant expertise to this, and indeed a whole range of members of parliament on this committee will have the chance to put issues directly to the chief executives of the big four banks, three hours for each of them, so this is a very detailed process of scrutiny to weigh up on the one hand these issues of stability but on the other hand, are the banks doing the right thing by their customers and are there legitimate grievances that are not being responded to, this is an important new forum for the bank chief executive to be required to respond directly to parliamentarians on these issues.

Kristina Keneally: Alright well Minister Fletcher, we'll leave it there but thanks so much for joining us on News Day.

Paul Fletcher: Thanks Kristina.