Transcript - TV interview on Sky News, Newsday with Tom Connell

HOST, TOM CONNELL: One of the biggest areas in the budget that did see major change under Labor was infrastructure. Lots of redirection of fund, reprioritisation, if you like, and some straight-out cuts. I spoke to Infrastructure Minister Catherine King a short time ago, started by asking her if her department was asked to find the most savings in the budget.

MINISTER FOR INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT, CATHERINE KING: I'd say a couple of things in terms of what we've seen from budget after budget is significant underspends in the infrastructure portfolio. And largely what that is about is the delivery of projects is not in line with the way in which the funding actually flows from the Commonwealth. And so what we did in this budget was really say, I want to work with states and territories to try and make sure that we are aligning where money is in the budget with the actual delivery of projects.

And that's been the problem. So we haven't delayed any projects, the projects are delayed and now our funding is flying much more closely aligned with when we think these projects are able to be delivered because we know there are significant capacity constraints in construction in the economy. But of course, if states come back to us and say, well, actually we think we can deliver this more quickly, then that obviously means that we again...

CONNELL: That’s the delays and the re-profiling. But there are some actual cuts. A lot tend to be in regional areas. Are the regions in a net since worse off with infrastructure?

KING: No, they're not, because there are significant infrastructure investments we are making in the regions from our election commitment. So that's the first thing that's substantial. But it was up in Cairns with the Cairns Marine precinct. That's a significant investment we're making to really diversify the economy. Up in Cairns, they've got an amazing Marine precinct there, but we want to develop that to be able to have bigger capacity. So there's lots of regional funding through our election commitments. We obviously, of course, announced two new programs starting next year, a billion dollars for a Growing Regions fund. And I'm happy to talk about how we're going to work with that. And also what I'm calling the Precincts Program, which is really to look at things like Cairns Marine Precinct, those big sort of projects that are ready for investment. State governments are really keen on, local councils are really keen on, know that that's going to help diversify jobs or really change the way in which a region or a city or a town works. And those are the sorts of projects we're looking for from there.

So what we also had to do, of course, as you know, in the March budget, it was an election budget of the previous government. There was lots of loading put in for all sorts of pork, frankly, across all sorts of areas. And so I looked at it line by line. There's a lot that we've kept, but a lot that we've reprofiled and a lot that we've also cut.

CONNELL: So just on that though, there wasn't a list of what's cut in the budget. Why was there no list of that and when will there be one available?

KING: So what the budget does is it says this is what we're keeping. So that's a matter for, I guess, the opposition to say that they think these things are not proceeding with or not.

CONNELL: For transparency should you also say we're not proceeding with this.

KING: Budgets are about what you are doing. So that's what the budget is actually about.

CONNELL: That there is money in that infrastructure budget to pay for something and it's not there that should be listed.

KING: There's very little. So that's the issue. There's very little. In fact, if you look at things like we've still invested in some of the projects in the Pilbara that were in the previous budget, we've still invested in some of the projects in Central Queensland that was there. Middle Arm is still there. Obviously, that was something we also committed to. In terms of infrastructure, the way in which that works, is that the schedules for the Land Transport Act, the partnerships we have with states and territories, they'll be uploaded on the treasury website and they'll all be there.

CONNELL: Can you give us a net figure on cuts versus new spending in regions on infrastructure? Because that's what the national is saying. Is there a net figure? We spend an extra 3 billion compared to our cuts?

KING: Well, I think the first thing I would say about the way in which the Nationals are carrying on at the moment is that they absolutely know that my portfolio is not the only portfolio that funds the regions. The reason they're so exercised about this is that this is the project that they had their hands all over and literally, frankly, had the colour coded spreadsheets.

CONNELL: You can say that there's a whole budget, but what about for infrastructure?

KING: So for infrastructure there is plenty of money going into the regions. I think in terms of we've put money into, I think there's $1.8 billion of money that is going into things like the Sturt Highway, the Dukes Highway, the Augusta Highway, the Tanami, we're keeping the Outback Way funding in their important and they are all regional projects. There is substantial funding going into the regions.

CONNELL: But for a journalist trying to sort of say, here's what the Nat’s are saying, here's what you're saying, how much more are you spending versus cuts in regional infrastructure? Do you have that figure?

KING: I don't have that figure off the top of my head, but I can tell you now, the National Party are absolutely wrong when they are saying that the region's disadvantage. There are 760 initiatives for regional Australia in the regional budget statement that was launched on budget night, 200 or so new programs. If you look at the investment we're making across communications infrastructure, regional health infrastructure, transport, so there's a lot and water infrastructure as well.

CONNELL: Vic Suburban Rail Loop, it's a massive spend. In terms of the overall budget, it's 85% just the Victoria's infrastructure. No cost benefit analysis done by Infrastructure Victoria or Infrastructure Australia. Is that going to be done?

KING: Yes, Infrastructure Australia is obviously…

CONNELL: They've done step one?

KING: Yes, so they've certainly done that and will be doing that. Our investment is $2.2 billion into the early works of suburban rail east. That is the commitment we have made and that is where the $2.2 billion is being invested. The Victorian Government did a cost benefit analysis of east and north and though, again, the cost benefit analysis that they have done, which will go to Infrastructure Australia, they've obviously started the process of doing that, said, for every dollar you spend, you get a $1.70 return.

CONNELL: The Vic Auditor-General said, actually you get $0.49.

KING: Well, that was the Vic Auditor-General. There's some contestability about the sorts of numbers that the Vic Auditor-General had. And I'll let the Victorian State Government argue in terms of that. That was for east, west, north and south. So that was for the entire rail loop. But I’ll let the Victorians….

CONNELL: But you’re the one putting up $2.2 billion, which is huge.

KING: Into the Suburban Rail Loop east, which will be transformational not just for the suburbs of Melbourne, but also for residents of Gippsland, for example, so if you can imagine trying to get in from Gippsland, you need to go to Monash Hospital, you need to go to Monash University. Having Clayton as a hub for that particular area will be really significant and will save significant amounts of time for regional communities.

CONNELL: You put a lot of emphasis on Infrastructure Australia and say, why didn't the coalition use it? But you're not using it for your biggest infrastructure spend in this budget.

KING: Well, we will be using it and also, I remind people, under the National Land Transport Act, there has to be an assessment done as part of our funding flow to Victoria. So, I am very confident in suburban rail that the Suburban Rail Loop will be a transformational project, not just for Melbourne, but for the whole of Victoria.

CONNELL: What if under Infrastructure Australia, or as you say, under that Act, the cost benefit analysis is not a positive one, what then?

KING: Well, again, I'm saying very clearly, we think that the work that the Victorian State Government did is substantial. We've put that investment as part of our election commitments on the table. If there's any further requests for funding for suburban rail, then obviously we will talk to the Victorian’s about that..

CONNELL: But I'm asking if Infrastructure Australia says no.

KING: You're asking me a hypothetical. So we’ll wait…

CONNELL: The money is already being spent and we could find out later it wasn't the best way to spend money.

KING: Well, we have made a decision as a government that the investment in Suburban Rail Loop, based on the cost benefit analysis that we had from the Victorian State Government prior to the election campaign, that the early works, those early works in the suburban rail east are a substantial and important investment for the state of Victoria. If you look at the way in which METRONET has transformed Perth in particular, and the way in which they've used railway stations, not just as a station for transport, but they are transforming suburbs, making sure you've got affordable housing, you've got supporting community infrastructure around, new retail and business precincts, that’s what Suburban Rail does.

CONNELL: If (Infrastructure Australia) finds that it is not a project that has a cost benefit analysis that is positive.

KING: And I'm sure you'll be talking to me. If that's the case.

CONNELL: Would there be no more investment? Would you stop it?

KING: Well, again, we haven't had number one, we haven't been asked for any further investment in Suburban Rail Loop from the Victorian State Government. And we will make those assessments in the usual way we would as a government.

CONNELL: Isn’t the usual way that if IA says no, then you don't go ahead?

KING: It hasn't been the usual way under the previous government, they committed $1.6 billion to heavy rail to Maroochydore with no business case at all.

CONNELL: So if IA says no, it's not a positive cost benefit analysis there wouldn't be any more money for it.

KING: We'll make that assessment as we get it. We haven't got a request from the Victorian State Government about any further investment.

CONNELL: We appreciate your time, Minister. Thank you.