Transcript of doorstop

JOURNALIST: [indistinct] can you guarantee that you’ll be doing that or do you have a response to the politic of it?

CATHERINE KING: So the infrastructure investment pipeline has been left in an absolute mess. It is clear that this pipeline over the last decade under the Liberal and National Party has not been managed. What the review has said – and I’ve said this publicly and the Treasurer – I said this again on the weekend – what the review has shown is that the pipeline went from 150 to 800 projects under the previous government, a large proportion of those coming into the pipeline in the lead-up to the 2016 and 2019 election campaigns. You can read what you might want to in terms of that timing. Many of them announced with various – you know, not knowing how much the projects were actually going to cost. So those projects are difficult to build because there isn’t enough money to build them.

Now, what the review has actually shown is that in that $120 billion pipeline, a pipeline we have committed to and committed to keep the $120 billion, is that there are $33 billion of known cost overruns with an expectation that there are more to come. And they are across every single one of the projects. We currently have 300 projects in construction. They are currently being built, and all of those have continued.

The review looked at around [indistinct] 250 projects overall and has made recommendations around cancelling some. It’s made recommendations around making sure we’ve got planning money and we slow the process down so we know what the costs are before we commit to construction.

We are in negotiations with the states and territories at the moment over that review. Those discussions are ongoing and we’ll have more to say about that shortly.

JOURNALIST: [Indistinct] for the Queensland Treasurer then? Are there [indistinct] coming to Queensland?

CATHERINE KING: I can say very clearly that the entire pipeline has not been managed well by the previous government, and I have got a mess to clean up. And I welcome states and territories helping me with that.

JOURNALIST: How much would cutting [indistinct].

JOURNALIST: [Indistinct] actually recommend should be cancelled.

CATHERINE KING: Again, I’m not going to – the review is not being released today. But you would not be surprised that, you know, we are starting to get closer to making those announcements.

JOURNALIST: How much would cutting infrastructure spending help to address inflation?

CATHERINE KING: Well, obviously the IMF over last week has said that infrastructure building and the amount of infrastructure projects, not just in our pipeline but in state and territory pipelines, is adding to inflation. We want to make sure we do everything we possibly can to get inflation down. We know that people need to have cost of living relief. It’s why we’re rolling out $23 billion of cost of living relief. And everything that we do, we need to make sure that it is not adding to inflation but that it is increasing productivity in this nation, and that’s what the review is about.

JOURNALIST: How many Australian workers would be affected?

CATHERINE KING: In terms of the capacity that we have at the moment, there is plenty of work—300 projects that the Commonwealth is investing in, there is plenty of work. We have significant capacity constraints in our labour market at the moment in infrastructure, and that is also adding to inflation costs.

JOURNALIST: Minister, are you giving priority to public transport projects?

CATHERINE KING: Certainly there – you know, certainly you would expect that a Labor Government, we want to invest in public transport. Heavy rail is often very, very expensive though and, again, when I look through the pipeline and we look at the commitments that were made by the previous government, under the Morrison Government, they’ve put money into rail projects that, frankly, can never be built because they have not put enough money into them. And that’s one of the challenges I’ve got with the pipeline.

JOURNALIST: Can you clarify, you referred to the $120 billion infrastructure pipeline. I think previously, though, you’ve referred to the review was the $80 billion IIP within that $120. Was the review the $80 billion or was the whole $120 billion –

CATHERINE KING: So, the infrastructure investment pipeline is $120 billion over 10 years, and we’ve committed to keeping that $120 billion pipeline. Obviously in terms of the IIP review projects, they were across a raft of different programs within the IIP.

JOURNALIST: Minister, why is your Government – not the Morrison Government, your Government – committing $2.2 billion to a suburban rail loop when the Victorian Auditor‑General said it didn’t have a sufficient business case?

CATHERINE KING: So, the $2.2 billion that the Albanese Labor Government has committed to the suburban rail loop – early work suburban rail loop east – is an important part of transforming Melbourne. We know that in projects like METRONET over in the west just how much that has transformed its suburbs. We know that you need to be able to build new housing and new investment, new retail, around existing public transport networks. And that is what suburban rail does. That is why we’ve invested in it. We’ve said that is the investment that is coming from the Commonwealth. Any further investments in suburban rail will be subject to Infrastructure Australia processes.

JOURNALIST: Minister King, just on the ACCC airfare price monitoring, why is that direction still not been issued?

CATHERINE KING: Well, that’s a – so, can I first say, the previous government introduced the price monitoring and gave the ACCC some additional money. That was set to expire. That did – and we didn’t have additional money to do that. We have now found some additional money to be able to bring that back in. I think that’s important in terms of making sure that airlines are accountable for the pricing that they are making. That is a direction the Treasurer will issue and will issue shortly.

JOURNALIST: [Indistinct] Is that deal done with senate crossbenchers?

CATHERINE KING: Sorry?

JOURNALIST: [Indistinct] you spoke about the concerns in regards to heavy rail projects and those costs, do you think that airport rail should still go ahead given there was actually construction work going on and it was still included in the review?

CATHERINE KING: Well, I think if you remember back to the last Victorian state budget that project was pushed out, and it was pushed out because there hadn’t been agreements reached yet about where the station box would be at the airport. And that’s an important part. What we did learn from Inland Rail is that you shouldn’t start a project if you don’t know where it’s going to start or finish, and that piece of work is really important in order to plan for airport rail. It’s a project I think is very important for the state of Victoria. I think we’re the only airport that does not have a heavy rail link or a rail transport link to it. It is an important project, but it is delayed because we haven’t finalised where the planning is for that.

JOURNALIST: Could I please clarify, could I please…

JOURNALIST: [indistinct] infrastructure review?

CATHERINE KING: Sorry, I couldn’t hear you?

JOURNALIST: Can you promise that it won’t be cut in the infrastructure review?

CATHERINE KING: So what I have undertaken is a review of the infrastructure pipeline. It’s been an independent review and we are working our way through those recommendations with our state and territory colleagues.

JOURNALIST: Could I please clarify what that process is with the states and territories? Is there some suggestion that if they pay for the cost overruns that they could save projects from the chopping block?

CATHERINE KING: No, they’re negotiations that we undertake with states and territories and they’re not something that I comment on.

JOURNALIST: When you said that there’s rail projects that never got built, the former government committed to rail projects that were never going to be built. Did you have one eye cast towards the Sunshine Coast rail extension on that one?

CATHERINE KING: I’m not going to comment on individual projects today, they are subject to ongoing negotiations and discussions with states and territories.

JOURNALIST: Further to Paul’s question, though, Minister, if a state is determined to build it and you guys are withdrawing or proposing it be postponed, if they want to push ahead it would be at their own cost?

CATHERINE KING: Well, that’s a matter for the states and territories to determine where they put their investment.

JOURNALIST: So that’s a yes?

CATHERINE KING: So, what I can say is that, you know, they are important partners. We are co-investors with states and territories on infrastructure. And it is best done in collaboration and cooperation. What we've seen in the pipeline, and what we've seen from the previous relationship that they had with some states and territories, is you'd have a project announced without any discussion with the state or territory - it was a surprise to a state or territory that the Commonwealth was going to invest in that project.

No discussion with the state about how much it might actually cost and many of those projects have just not been delivered because they’ve not been a priority for a particular state or territory. So we have to do this in partnership, have to do it in collaboration with states and territories. They are partners with us. We are the investors alongside them and it is really important that we have those relationships to be able to invest.

JOURNALIST: Going back to the ACCC, was the monitoring done as the deal with Senate crossbenchers, and if so, why did it take crossbenchers pushing for the monitoring to come back in and you guys to find the money?

CATHERINE KING: Well, can I just say, the reporting on this has been a bit weird to me. The ACCC always undertakes monitoring of aviation prices. It’s always done so. The specific monitoring it undertook during COVID there was some additional [indistinct]. The ACCC always, and always has done, it looks at aviation, at airline prices. What we are seeing at the moment, though, is that because of fuel costs air fares are continuing to be consistently high. The major contributor to air fares being high are fuel costs, and that should not come as a surprise to anybody. But what we want to make sure is that there is not gouging happening and that consumers – which is why we’ve developed an aviation green paper ­­– that consumers are actually treated fairly by airlines right the way across Australia.

I’ve got to get to cabinet, but I’ll just take one more question.

JOURNALIST: You talked about wanting to create head room in the infrastructure budget, is the head room to allow for potential increases in the costs of other projects, or is the head room to allow you to add projects that you would like to add over the next two or three years that aren’t currently in the pipeline?

CATHERINE KING: Thanks for the question, [indistinct]. Well, the first thing is at the moment there is no head room for cost overruns at all. So, I’ve got a pipeline that is, that we know, is $33 billion short of what’s needed to actually build the projects that are in it currently. And that is what we know. There are more cost pressures to come. So, I have to find the money in order to be able to actually fund cost pressures on projects particularly those that are already under construction, and we’ve got states and territories coming to us and saying, “We need extra to complete this project,” and that’s happening.

We also would like to be able to add new projects. We know that for many areas, particularly where we’ve got new housing going in, we want to be able to connect people, we want to make sure that there’s, you know, the capacity to increase productivity in regions. We’ve got, you know, increasing weather events that are meaning that the resilience of our rail freight network is under pressure. So of course we want to be able to add projects to the pipeline, but at the moment because of the absolute mess that has been left for us by the Liberal and National Party we cannot meet cost pressures and we cannot add new projects to the pipeline unless we undertake, had undertaken this review, and unless we have some cancelation of projects. Thanks guys.