The Herald-Sun op-ed

Opinion Piece

PFO-001/2016

23 February 2016

Daily Telegraph

As Australia’s fastest growing city, it is vital that Melbourne has the road and rail networks it needs to keep people moving.

But big transport projects take a lot of planning. East-West Link was first recommended in the 2006 Eddington Review.

The Commonwealth Government committed $3 billion to get this project moving. Yet after coming to government in 2015, the Andrews Government terminated the contracts on this project – costing Victorian taxpayers $1.1 billion.

Now the Victorian Labor Government is asking the Commonwealth to fund the Melbourne Metro rail project.

Melbourne Metro aims to allow for 20,000 more passengers to use the metropolitan rail network in peak hour, as well as allow for the future expansion of Melbourne's public transport network. 

But it will cost at least $9 billion – so we need to look carefully at whether this is a good use of taxpayers’ money.

That is why the Turnbull Government says we need to see a business case for Melbourne Metro from the Victorian Government – so that it can then be subject to assessment by Infrastructure Australia.

This is the very thing that Infrastructure Australia was designed to do – when it was set up by Federal Labor’s Anthony Albanese in 2008.
It would assess and prioritise infrastructure proposals, he said in 2008, and make recommendations to the Government about ‘which projects are top priorities.’

Infrastructure Australia would apply rigorous cost benefit analysis – enabling it to recommend actions that would boost national productivity.

According to Albanese’s website, the formation of Infrastructure Australia was one of the highlights of his time in government. It would “break the nexus between the short termism of the political cycle and the long-term vision necessary for the infrastructure investment cycle.”

Even as recently as June 2015, Albanese was pressing for Infrastructure Australia to have an even stronger role, saying the laws should be strengthened so future capital works would only be funded if they were given the approval of IA.

But two and a half years into Opposition, Mr Albanese seems to have abandoned his previous high minded commitment to rational prioritisation of infrastructure projects.

Last Friday he said Melbourne Metro would be Labor’s first priority for Victorian infrastructure under a federal Labor government – even though the Andrews Government has not yet completed a business case for Melbourne Metro. One has certainly not yet been assessed by Infrastructure Australia. 

Infrastructure Australia either sets priorities – or it does not. It is either a gatekeeper – or it is not.

Even more curious is the justification he offers for his offer of a blank cheque: he says Victoria has been ‘dudded’ because it received less in Commonwealth infrastructure funding than its share of population.

This argument founders on a basic factual point: if the Victorian Labor Government had not irresponsibly cancelled the East-West Link project, there would be $3 billion of Commonwealth funding going to Victoria and the state’s share would be considerably higher.

But it is also a telling example of how Albanese has changed his tune in Opposition. In a 2008 speech, Albanese firmly rejected the argument that state funding should be proportionate to population. His ‘Building Australia Fund’, he was at pains to say, was “not a business-as-usual fund whereby the states will sit down and tally up we’ve got 20 per cent of the population so we’ll bid for 30 per cent of the funds and end up settling back to 20.”

Now he advocates the population share principle which he previously rejected.

In Government Albanese spoke about prioritising projects, implicitly recognising that not everything can be funded at the same time. But in Opposition Albanese is promising everything to everyone – and every project seems to be his first priority.

In October last year he joined with Bill Shorten in announcing that Labor would deliver a laundry list of projects around Australia, including Melbourne Metro.

A reasonable estimate suggests these projects would cost between thirty and fifty billion dollars – yet Albanese proposed to deliver them with a $10 billion fund, much of which is borrowed money. 

Some of what Albanese says makes sense. It is true that the infrastructure investment cycle needs long term vision.

That is why when the Coalition came to power we maintained funding for projects initiated under Labor, such as the Moreton Bay Rail Link in Brisbane and WestConnex in Sydney.

Sadly we have seen no such consistency from Victorian Labor in Government - with its abandonment of East West Link - or federal Labor in opposition, with Albanese recently walking away from his previous support for Sydney's WestConnex.

Federal Labor is making big promises about Melbourne Metro – without doing the detailed work.

This project – like every other major infrastructure project – needs proper assessment by Infrastructure Australia before the Commonwealth can consider whether to fund it.

This is the body which Anthony Albanese set up and the process he championed when in Government.

Mr Albanese can turn his back on his previous approach and pursue 'the short termism of the political cycle.'

The Turnbull Government will have Infrastructure Australia carefully assess Melbourne Metro, and other infrastructure proposals, before we decide if they merit funding.