Minister Catherine King radio interview, ABC Hobart

KYLIE BAXTER: Up now, though, I want to talk about infrastructure. You’ve heard from Gavin Pearce about the one project that will not go ahead with federal funding, that is the Old Surrey Road upgrade in Bernie. So, why has the federal infrastructure minister made this decision? That’s what we want to know. That, of course, is Catherine King. She is the Federal Minister for Infrastructure and she joins me on the program. Good morning.

CATHERINE KING: Good morning, Kylie.

KYLIE BAXTER: So, your government inherited the Infrastructure Investment Program from the former Coalition government, what did you find in reviewing it?

CATHERINE KING: Well, that it had basically been – that it’s just we can’t deliver every project that is in there because the previous government completely mismanaged this program. The independent reviewers, I had to ask them to come in to have a look at those projects that were not currently under construction. We obviously left anything under construction, contracted, left alone, but we obviously had to look at can we afford to do this? And they basically said, if you continue in the way that you do, there are $33 billion worth of cost overruns, 14.9 of those projects not under construction. So, the other is projects currently under construction. So, we have to find that.

And then what they found was that if we wanted to put new things in because people are asking for new roads, new rail, new other – new transport, that we couldn’t afford to do that for another decade because the previous government, basically, particularly in the lead up to the 2016 and the 2019 election campaign, made promises that they certainly were never going to be able to deliver and that money has just been sitting in that pipeline for a long period of time. The project we’ve cancelled in Tasmania is an example of that.

KYLIE BAXTER: Now, Gavin Pierce says it’s critical, though, the Old Surrey Road Massey–Greene drive upgrade for heavy trucks and a range of other things to make that part of the world function as it needs to in Tasmania. So, why was that decision made, I mean, that project over any other?

CATHERINE KING: So, the initial announcement of that project was made four years ago. There’s still no work – no work has been undertaken. So, Gavin needs to explain why that didn’t happen in the last term that they were in government. No work undertaken. There’s still consultation being undertaken. We don’t know what the project actually involves and there’s an expectation of substantial cost escalations because – and we still don’t know what level that would be. So, that project has sat there for a long period of time, not actually been able to be delivered. It doesn’t mean that it can’t come back into the pipeline later when we’ve got a clearer idea about how much it might cost and the Tasmanian Government might put that to us, but at the moment it is four years announced. Nothing much has happened in the meantime, not actually delivered and there’s potential of substantial cost escalations, but it May come back into the pipeline later at the request of the Tasmanian Government. But that is a matter for them when they’ve got a better handle on how much it will cost.

KYLIE BAXTER: Want to push through a few questions, mainly because we’re pushing up to the 09:00 news, quite a few people wanting to know, including Stuart, why future projects are going to be moving from an 80-20 funding model to 50-50.

CATHERINE KING: Yeah, so the 80-20 is a convention only. It’s not written in stone anywhere, but it seems to have become the default position for pretty much a large number of projects right the way across the country. What it has meant that for the Commonwealth investment, we don’t get an equal investment from the state governments. So, for example, if we had a project that was worth, from our point of view, $80 million, we would like to leverage that into being $160 million with a state contribution. We are very conscious, however, that in smaller states with small revenue bases that that may be challenging, but we also want to make sure that the states are also not just sharing the benefits of the projects, but they’re also managing the risks of the cost escalation. And often we’ve also found on Commonwealth contributions, when we’re making that amount of contribution, the risks are not always managed as best they could be.

KYLIE BAXTER: I’ve got one more question before we hit the news. You’ve asked the state government to provide a business plan for the Northern Suburbs Transport Corridor before you provide the remaining funding. So, what exactly do you need? What information? In about 30 seconds, maybe 45.

CATHERINE KING: Well, what are we going to do and how much will it cost? That’s the basic thing. What are we going to do and what will it cost?

KYLIE BAXTER: Thank you so much for joining me on the program. Wish we had more time, but thank you for coming on.

CATHERINE KING: Always welcome. It was disappointing Gavin couldn’t back in Bridget Archer. She’s been a terrific member for Bass and Tasmania and I’m very happy to back her in.

KYLIE BAXTER: Catherine King, Federal Minister for Infrastructure there.