Transcript - CEDA Infrastructure conference, Melbourne
Thank you Diane for the kind introduction and thank you for having me today.
I begin by acknowledging the Wurundjeri people of the Kulin Nation, the traditional owners of the land on which we gather. I pay my respect to their Elders, past, present and emerging. I extend those respects to all First Nations people here today.
When we look back at 2023, we will remember it as a milestone on our nation’s long journey towards reconciliation. I am proud to be a member of a government that supports the Uluru Statement from the Heart in full. And I encourage you all to support the Voice at the referendum later this year.
I also acknowledge:
• The Hon. Jacinta Allan MP Deputy Premier of Victoria and Minister for Transport, Infrastructure, the Suburban Rail Loop and Commonwealth Games Delivery
• Diane Smith-Gander AO National Chair, CEDA
• Melinda Cilento Chief Executive, CEDA
• Gabrielle Trainor AO Interim Chair, Infrastructure Australia
I am delighted to address the 2023 CEDA Infrastructure Conference. As many of you may recall, I joined you as the Shadow Minister at last year’s CEDA Infrastructure Conference. Back then, the question we were discussing was “whether Australia’s big infrastructure build is delivering value”. The answer I settled on then was simple, and perhaps predictable: “no.” Back in early 2022, I said that “Australia needs a government that listens to expert advice, works cooperatively, invests strategically and puts equity at the heart of its plan.” The Australian people seem to have felt the same. Since coming to Government, we have moved purposefully to implement our election commitments. We are streamlining the infrastructure pipeline. We are refocusing on the projects that increase productivity, grow resilience and deliver significant social benefits to communities. And we are working cooperatively with our state and territory colleagues to ensure that we can manage the real constraints that exist in the market today. We are doing all of this because I know what responsible investment in transport infrastructure can do. It can expand the productive capacity of the economy, and improve the resilience of supply chains for freight and trade. It can ease congestion and contribute to safer, better connected communities so people can get to where they need to be – making our cities and regions more liveable. And it can enable indirect benefits – such as through local procurement and increased workforce participation by women and First Nations peoples. That’s why I am pleased to see that the theme of this year’s event is “Delivering infrastructure. Delivering social and economic value.” To be honest, I don’t think I could come up with a better theme if I tried.
Let’s start with the economic value of infrastructure investment. In 2021-22, 8.9 per cent of Australia’s GDP was from infrastructure industries and in the 12 months to October 2022 $36.4 billion was spent on transport infrastructure construction across Australia. Infrastructure industries employ thousands of Australians, from the very biggest projects like Melbourne Metro and the Suburban Rail Loop here in Victoria, through to local road upgrades in every city, every region and every remote area in the country. Across the nation, 190,000 workers are building our future on public infrastructure projects alone. These workers are earning good wages which they use to support their families, raise their children and support local businesses. I think the economic value in that direct employment stands up pretty strongly on its own, and that is before we even get to the productivity benefits that good infrastructure investment brings. Good investments in road, rail and intermodal facilities get our goods to market faster, they keep trucks moving, they connect businesses with each other and they get us to and from work sooner or safer. It makes our economy more productive and more resilient. Later today, Minister Allan and I will be signing a memorandum of understanding on rail interoperability. That might sound niche – but we are signing these across Australia to lock in standards on rule books, safe work arrangements, trains and signaling systems, the diversity of which impede productivity and make travelling across rail networks costlier, with added safety risks. Improving rail interoperability will allow for passengers and freight to move seamlessly and safely between major cities, regions and ports on a modern, integrated and productive rail network that works as one interoperable system. It will create jobs and grow the economy. But while we often spend a lot of time talking about the economic benefits of infrastructure, I am glad that the topic today gives us a chance to talk about the other half of the equation – the social benefits. As minister, I am determined that we put more focus on the second half. Of course, social benefits can be closely linked to the economic benefits – particularly when you consider well paid jobs and proposals like our Australian Skills Guarantee that will mean that 10 per cent of workers on Commonwealth-funded major projects will be an apprentice, trainee or paid cadet. But there is also the social benefit of spreading opportunity to regions that are often under-served or disadvantaged. You can see this in remote Australia with projects like the sealing of the Tanami. In the October Budget, the Albanese Government committed $740 million towards this central Australian project. Sealing these roads will improve safety, connectivity, flood immunity, and social and economic development for the region. It will let people reach opportunities in regional centres like Alice Springs – and it will let opportunities spread to remote communities across central Australia. And in the same way, you can see the powerful impact that a major project like Suburban Rail Loop will have on this city and this state. This rail line will change the way we interact with Melbourne – allowing us to access jobs, schools, universities, medical facilities and economic precincts that were previously out of easy reach. It will change the way regional Victorians interact with the city too – particularly from those in the east but even those in the west like me. It will create new employment, education, residential and retail precincts – helping grow Melbourne into a major world city for generations to come. I am happy to see Jacinta Allan here today – and I know that she is just as excited about the potential of this project as I am. These are just two examples of projects creating social dividends – but you can see more across the country, from local projects improving the liveability of a town through to the largest reshaping a state.
To achieve both good economic and good social outcomes, it is essential that our investments are well considered and well targeted. As many here know – I have spoken at length about our reforms to Infrastructure Australia, and I am sure I will get a further opportunity to do so through our discussion. But Infrastructure Australia isn’t the only way through which we will better target infrastructure spending. I have spoken less regularly about my plans to issue an infrastructure policy statement for land transport – but really, it is no less important. This statement will do two important things. Firstly, it will clearly define the Australian Government’s land transport investment role – as a leader in nation building infrastructure. The role of the Australian Government in infrastructure investment has become blurred and ill-defined. I am determined that will change. Secondly, it will identify the principles and objectives that underpin our future investments in transport projects and will help guide Infrastructure Australia’s advice to government. This policy statement is still being finalised but the Commonwealth should be focused on projects that increase productivity, resilience of our freight networks and lead to safer and better connected cities and regions.
This statement is important because – frankly – after 10 years of the previous government, we need a reset. In 2012-13, there were 146 projects in the IIP. These were nation building projects. By the time the coalition left office in 2021-22, there were 873 projects in the IIP, and 705 of these are costed at below $100 million. These projects included culverts on a local council road in outback Queensland, and even repainting the surface of a bike lane in Perth from black to red.
Given the market constraints we face, getting Australia’s infrastructure agenda back on a sustainable footing is more important than ever. In September this year, our workforce shortfall is due to peak at about 112,000 workers. This shortage is particularly felt amongst engineers, surveyors, project managers and labourers – amongst many others. This is being felt across the country – in every state and territory – and everywhere it is being combined with rising costs in construction materials. That is why we need to choose what we build carefully – and I am thankful to my colleagues in the states and territories for working collaboratively with me to better align project funding with delivery timelines and to refocus on projects that will deliver the biggest benefit. Of course, our initiatives like Jobs and Skills Australia and fee-free TAFE will help tackle these shortages over the medium to long-term – but in the immediate future, we had to take tough decisions about what not to build and what projects to prioritise.
When it comes to focusing on the projects that matter most, we have to talk about resilience. Any of you who tuned into my Press Club speech recently would have already heard this story, last month I was in Fitzroy Crossing. The loss of their bridge – and the way it has split that community from vital supply lines – is a stark reminder of how important it is to maintain our essential freight routes and build in redundancy. Yes, we will, along with the WA Government, rebuild the bridge. But we should all reflect on the fact that while this time the damage might be being felt in Fitzroy Crossing, there are many places in Australia that are just as vulnerable. It is with that in mind that the Bureau of Infrastructure and Transport Research Economics, in my Department, is carrying out their Road and Rail Supply Chain Resilience Review. Phase one of this report – identifying areas of risk – was released earlier this year and I encourage you all to read it. This report paints a stark picture of our vulnerabilities. The transcontinental rail line, the Stuart Highway, the Carpentaria Highway, the South Coast Highway in WA, and the main west rail line out of Sydney, just to name a few. All are vital transport links and all are rated at high risk. In Phase 2 of this Review, my Department will develop options for strengthening the resilience of road and rail networks, in consultation with stakeholders and other levels of government. Then will come the hard part – rebuilding and repairing our freight and supply networks so they are ready to stand strong long into the future. It is a task that all of us – in states, territories and the commonwealth – must confront over the years to come.
Before I finish, I’d like to return briefly to the issue of labour shortages. At the end of January, Melinda Cilento was all over the news speaking about the gender divide in critical industries such as construction. Citing statistics which show the percentage of women in construction has worsened over the past quarter century, in CEDA’s submission to the Employment White Paper. The gender divide is of great concern to me, as Minister. We now have a female Commonwealth Minister for Infrastructure – along with female infrastructure ministers here in Victoria, over in WA and up in the NT, but is time we had more women in hard hats. I am pleased to say the Albanese Government has already moved in two areas which CEDA advocates as important to addressing this problem. They is more (and more flexible) paid parental leave, with legislation introduced in November. As well as increased access to affordable high-quality childcare. Our ‘Cheaper Child Care Bill’ passed Parliament in November and is now law. Taken together, these reforms seek to address a key structural barrier which is currently preventing women from participating in the workforce, or working as much as they would like. And it took a majority female Government to deliver them.
Thank you for having me.