Transcript - Radio interview - ABC Sydney with Hamish MacDonald
HAMISH MACDONALD [HOST]: The person who made these decisions is the Federal Infrastructure Minister Catherine King. She’s been good enough to agree to join us this afternoon. A very good afternoon to you, Minister.
CATHERINE KING [MINISTER]: Really good to be with you and with your listeners.
HAMISH MACDONALD: You say the projects axed did not demonstrate merit, they lack any national strategic rationale and do not meet the Australian government's national investment priorities. Why, then, are you defunding this interchange which would connect the M7 Motorway with the new M12 and would sever a critical link to the new Western Sydney airport?
CATHERINE KING: So, we are not defunding the M7-M12 interchange. That is a project that is funded in a contract between Transurban and the New South Wales government. What we are not funding is there was an amount of money that was provisioned for, which we don’t actually know what it was actually for because we can’t get clarity on it, in the lead-up to the last election, which was – which is not jeopardising the build at all. It seems to be an arrangement that was made between the previous government and the previous Liberal government. So that project that that money is not being provided, but we are in discussions with the New South Wales Government –
HAMISH MACDONALD: Sorry, if I may –
CATHERINE KING: So the projects are going ahead. It’s a Transurban-New South Wales government project, not a Commonwealth-state project.
HAMISH MACDONALD: But if you’re saying you don’t know what you’ve cut, how can you be certain that it doesn’t impact the project?
CATHERINE KING: Well, we know that it won’t impact the project. In fact, the Infrastructure Partnerships Australia has come out and said that pretty clearly today. They’re the big organisation that comments on infrastructure and knows the builds across the country. But what I can say in terms of this, this is not a – this is a project that was part of a broader agreement between Transurban in New South Wales. We are not a party to that agreement, but we will work with the New South Wales government around cost pressures across its infrastructure builds. So this project was not one that we were a party to.
HAMISH MACDONALD: That doesn’t seem to be the view of the New South Wales state government, though. They say they’ve been talking to you and you’re not listening.
CATHERINE KING: They’ve certainly been talking to us, but we’re not a party. This is a broader agreement between Transurban and the New South Wales Government, this project.
HAMISH MACDONALD: Is it possible given that, as you’ve said, you can’t identify exactly what the money was for that somehow there is some misunderstanding here?
CATHERINE KING: Look, I don’t think so. I think we’ve been clear all the way along that because this is not a Commonwealth-state funded road, like, this is not something – we’ve put money obviously into the M12, some $1.2 billion, but these interchanges were part of an agreement between Transurban and New South Wales that we’re not a party to. So we don’t have cover of what is in that, what the contracts are. But what we can say is that we know that there are cost pressures for the New South Wales Government across a range of projects, and we are talking cooperatively with them about how we might alleviate some of that.
HAMISH MACDONALD: So can we just be clear about this, because obviously there’s a very different interpretation of your decision in New South Wales Government ranks. You’re saying that nothing you have made a decision on will impact the interchange connecting the M12 and the M7 to the new airport?
CATHERINE KING: That’s correct.
HAMISH MACDONALD: This is what Karen McKeown, the Labor state MP for Penrith, said this morning on ABC Sydney Breakfast on this.
HAMISH MACDONALD: A dumb decision, she says. The New South Wales Roads Minister John Graham says the state government will push immediately for the funding of the connection to be retained.
CATHERINE KING: Again, we’re not – this is not a contract that – this is not project we have been part of. This is a project entirely between Transurban and the New South Wales government. We’ve been working with the New South Wales government, so where there are cost pressures for projects where there is co-funding and co-investment from the Commonwealth, we are talking to the government about – the New South Wales Government about that. But this project is not one that we are actually – have been part of.
There appears to be some provision had been made back in the lead-up to the last election for an amount of money for this – to put some Commonwealth money into this interchange. We have been seeking clarification about exactly what that is and what that’s for. We’ll continue to do that, but the review has identified pretty clearly that this project – we – what part of it are we building? It’s not a project that , as I said, we’ve actually had co-funding in.
HAMISH MACDONALD: But you’re acknowledging – I’m terribly sorry to stay on this, but I suspect everyone listening is as confused by your responses as I am. You’re saying that there was a commitment made in the lead-up to the last election by the Commonwealth to contribute to the construction of that interchange. Are you committed to that funding or not?
CATHERINE KING: No, we have cancelled that funding. But we don’t know if the money was – what the money was going to as part of an agreement between Transurban and the New South Wales Government.
HAMISH MACDONALD: So why on earth did you start this interview by saying you haven’t withdrawn any funding from that project and alleging that you have no involvement in it?
CATHERINE KING: So what I’ve said very clearly is that this project, the interchange projects, are not a contract that the Commonwealth is involved in. There is – we have cancelled money that was sitting in the budget that, again, we’re trying to work out from the New South Wales Government what that actually – what that was for, where that was going to. But we are unable – because we are not parties to this contract, this is not a Commonwealth-state road that we are part of, that particular project. But what we are trying to do is look where are the cost pressures across New South Wales that we might assist with. We know that this project is important and it will not jeopardise the project.
HAMISH MACDONALD: And does have merit and national significance in your view?
CATHERINE KING: Yes, certainly. Of course as a project it does. But it’s not one at the moment that the Commonwealth has invested in.
HAMISH MACDONALD: I’m talking to Catherine King, who is the Federal Infrastructure Minister. If you’ve got a question, 0467 922 702 is the number. You can call us on 1300 222 702.
Why is it that of all of these projects and funding buckets that you are cancelling, why is it that this state and this city is bearing the brunt of these cuts?
CATHERINE KING: Well, they’re not. And let me just go through what we were left with. So I’ve inherited $120 billion infrastructure investment pipeline that independent reviewers have said we simply cannot deliver because it has been put full of projects that are underfunded substantially, were announced largely before the 2016 and the 2019 election campaigns, that have – again, if we were to fund all of them, we would need to find in essence over $33 billion in cost pressures, and that’s what we know. So we’ve had to be upfront with people and actually had to come in and say how do we actually afford this pipeline, how do we get rid of some of the, in essence, which were zombie projects that were sitting there. So some of those commuter carparks that, again, if you remember, were announced by Alan Tudge could never be built, could never be built for the amount of money that was there. So we’ve had to clear those out. Now, we know we’re already investing over $19 billion –
HAMISH MACDONALD: I’m sorry –
CATHERINE KING: – worth of funding into New South Wales –
HAMISH MACDONALD: But, Minister, you’ve said that it’s not correct that this state and this city is bearing the brunt. But of the 50 you’ve cancelled, just over a third come from New South Wales.
CATHERINE KING: We haven’t taken a state-by-state approach; we’ve taken a project-by-project approach to the infrastructure investment pipeline. Of course, you’ve had the New South Wales Government had to undertake their own review to look at their pipeline to see what was deliverable. We’ve had to do exactly the same, because we want to make sure every single dollar of investment we make right the way across the country is actually able to be delivered. Many of these projects were simply substantially underfunded and were not able to be delivered. So we’ve now taken those out of the pipeline. Every single dollar that goes to New South Wales stays in New South Wales, and we will continue to work with the New South Wales Government, how to alleviate what we know is substantial pressures not just on the cost of projects but also on the infrastructure that you need to move around your great city.
HAMISH MACDONALD: The Parramatta Lord Mayor Pierre Esber says that within 10 to 12 years there’ll be more people living west of Parramatta than east. These things cost twice as much, in his words, if you kick things down the road. And yet you’re knocking these huge projects in western Sydney on the head, and to the west of Sydney and to the north of Sydney. You know that this – you know, the migration policy that you’re federal government wants to put in place is being supported strongly by the New South Wales Government and greater western Sydney particularly is absorbing a lot of that migration flow. And yet these are the areas where you’re cutting infrastructure from.
CATHERINE KING: It’s also the areas that we’re investing substantially in – 5.1 for Sydney Metro, the 1.6 for the M12, the Northern Road $1.2 billion. We are investing billions of dollars in western Sydney. We obviously know that there are pressures to do more. But I want to be able to not just say here is a press release; I want to actually be able to deliver the projects that we announce. So we have worked very closely with the New South Wales Government. We obviously got a panel to look at what some of the future pressures would be in western Sydney. We released that yesterday as well. We’ve got a bit of work to do on some business cases to make sure we actually understand what we need to do and what the costs are, but I want to make sure when we announce funding for projects we can actually deliver them. And that’s what the problem I’ve had with this pipeline – there are many projects that simply cannot be delivered and certainly can’t be delivered for the amount of money that is allocated to them.
HAMISH MACDONALD: The Fin Review has done a count today of the projects you are cutting. You’re saying that this was done on a case-by-case basis rather than a state-by-state basis. The Fin Review says that 21 of the seats that are affected by this, as in constituencies, are Liberal and National-held seats compared to 8 Labor. Is this some kind of political payback given that, as you say, these were – many of these things were promised in the lead-up to the last election?
CATHERINE KING: Look, no, not at all. I mean, it wouldn’t surprise your listeners, though, if the vast majority – if we had an infrastructure investment pipeline that went from 150 projects to over 800 projects, a large number of those coming into the pipeline in the lead-up to the 2016 and 2019 election campaign, you wouldn’t be surprised to know if you actually looked across the pipeline and did a map of where the investments are that a large number of them are not necessarily in seats that were held by Labor, which is why to some extent you could say the west has been underdone over time. And certainly what we’ve had to do and what the independent reviewers did is they took a project-by-project, case-by-case basis to the recommendations they made to government. We then put those recommendations to the New South Wales Government and have worked with them to deliver what I think now is a sustainable pipeline going forward.
We’ve obviously got a bit more work to do in New South Wales in relation to cost overruns and how we manage those pressures so we can deliver more for western Sydney in particular. But that is the work that I have to do as the Federal Infrastructure Minister to ensure that this $120 billion pipeline – no money has been cut from the pipeline at all, and money that has been removed from projects stays within each state. That allows for cost overruns, allows for new projects to come into the pipeline as we go forward. But we’ve got to be able to actually deliver them. And that’s really what the focus of the review has been about – trying to build more and to build better.
HAMISH MACDONALD: Respectfully, Minister, you do acknowledge that more Liberal and National-held seats are being impacted by this than Labor-held seats? You do accept that?
CATHERINE KING: No, I don’t. I don’t. I haven’t counted. To be quite honest, I actually haven’t looked. I don’t have – I have not looked at any stage to see where the seats are of any of these projects. I’ve looked at the projects. I’ve looked at the recommendations we’ve made. I’ve looked it’s cost overruns that if we didn’t remove those projects what we’d have to pay. But, you know, it would not be surprising that the previous government funded more projects in Liberal and National Party seats, so when we’re going through a review that would not be surprising that that’s the case.
HAMISH MACDONALD: You’re really saying you were totally blind to which party holds the seats?
CATHERINE KING: Absolutely. Absolutely.
HAMISH MACDONALD: At no point in the process of making these decisions did you look at where these – which constituencies these seats lie?
CATHERINE KING: No. No, absolutely not.
HAMISH MACDONALD: And I do want to just return to the question of our city and our state. I think you said that we don’t bear the brunt of these cuts. Can I just ask you to explain that, because more than a third of them do come from New South Wales.
CATHERINE KING: What we’ve done right the way across, we have $120 billion infrastructure pipeline that is co-invested between the Commonwealth and states and in some cases local government. What I asked the independent reviewers to do was to look at the projects in the pipeline that were not currently under construction and to provide me with advice about could they be proceeded with, did they – if they were to be proceeded with how much money additional would be required to do that. And what I’ve had to do is to make sure we’ve got a sustainable pipeline going forward, which we now have, that we can actually deliver across the country. And so that was done on a project-by project-basis.
HAMISH MACDONALD: And if the New South Wales state government turns around to you and says, “Look, this pot of money that you said you didn’t know what it was for, this was actually critical to us delivering the connection between the M7, the M12 and the new airport,” will you reconsider that decision?
CATHERINE KING: We’re certainly in continued discussions with the New South Wales Government. As I said, this is a project that we’re don’t – we’re not part of this project.
HAMISH MACDONALD: I understand – we’ve heard of all that. This is a different question.
CATHERINE KING: So it’s difficult – so it is difficult for us to fund a project when we have not been part of it. We’re not – we don’t have a –
HAMISH MACDONALD: Sure –
CATHERINE KING: There isn’t a contractual agreement –
HAMISH MACDONALD: But, Minister –
CATHERINE KING: – between the Commonwealth and state –
HAMISH MACDONALD: Sure, but you have told us today –
CATHERINE KING: – but what I can do – please stop interrupting me. Hamish, you keep interrupting me. It’s actually hard to talk when you do that. So what I have said is that we do understand and we are in discussions with the New South Wales Government about the cost pressures they have across the entire pipeline, and we’ll keep talking to them about that, including in relation to this project.
HAMISH MACDONALD: Minister, really appreciate your patience this afternoon. I’m sorry to press you on these questions, but I’m being flooded with text messages and people saying, “Look, I’m actually confused about what the minister is saying here.” So I do think it’s worth us getting to the bottom of this. It’s a lot of money, and as you would surely acknowledge, impacts a lot of Australians.
CATHERINE KING: Yep, of course. Understood.
HAMISH MACDONALD: Catherine King, Minister for Infrastructure, Transport, Regional Development and Local Government, thank you very much.