FIONA POOLE, HOST: Catherine King is in town today to mark a pretty big milestone for the Coffs Harbour Bypass. Minister King, good morning. 

CATHERINE KING, MINISTER FOR INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT: Good morning. Lovely to be with you. 

FIONA POOLE: So blasting has wrapped up three tunnels, equal to about a kilometre of tunnels. It's a real big job.

CATHERINE KING: It is a big job. The tunnelling is done, and that's really the milestone. I'll get an opportunity to hopefully walk through one of them and have a bit of a look to see that work. And so that's been a huge amount of work, half a million tons of rock being removed using a lot of explosives and control blasts through that process. I do want to thank everyone for their patience. This is a big $2.2 billion project and a big engineering feat. So, there has been obviously some disruption and inconvenience in the community, but we're now at the stage where the work on actually putting the road in, now that the big civil works has been done, putting the road in is now ready to be done, and all of the drainage and signage and signalling, all of that work now can commence to get this road built through what are pretty big road tunnels. 

FIONA POOLE: Can we talk about the threat of silicosis? Earlier this year, there was a 32-year-old man that was diagnosed with it after working on that tunnelling project in Sydney, and there were also another 12 workers diagnosed. And I think when we all read that headline, we were like- on the Coffs coast, mate we've got a kilometre of tunnels here. Are you confident that enough is being done to protect the Coffs harbor workers on those tunnels?

CATHERINE KING: Well, every workplace should be a safe workplace, and it is the obligation on contractors and on all of the various people involved in that work site to ensure that that is safe. And you know, silicosis is a known risk when you are doing that sort of work. And so that's, you know, terrible that that has happened in that workplace. And it is the expectation of me as minister, and I know the New South Wales minister as well responsible for delivering the project, that every workplace be safe and that those measures be put in place. There are no excuses for that. 

FIONA POOLE: But are you confident that the workers on the Coffs Harbour tunnels are safe? 

CATHERINE KING: Well, that is certainly my expectation, and certainly that's the expectation of the New South Wales Government as well. 

FIONA POOLE: As the infrastructure minister you identify and fund big infrastructure projects, projects which are like ideally improve the social and economic output of a region like ours. And you're looking at all the long-term rail options at the moment, because you're also the transport minister. High Speed Rail Authority thinks that they can do Sydney to Newcastle in an hour, which is just awesome. But no one is talking about Sydney to Port Macquarie or Sydney to Taree or Sydney to Coffs. Why is our region not included in that discussion around High Speed Rail?

CATHERINE KING: Because the first trend is really to look at that population centre from Newcastle. One of the things that high speed rail does it is not just about fast train service. I know everyone looks at it and thinks about it as a transport mode. It's also about the economic opportunities that are there for the Hunter and Newcastle. If you look, and I've had the opportunity to look at both high speed rail one and two in the UK, if you look at the centre of Birmingham, the changes that are coming about because of the development of high speed rail there as an economic hub, and really as an opportunity to move large banking services head offices out to Birmingham. That's the same sort of thing that we're looking at for Newcastle, and obviously, then looking at also stopping on the Central Coast. It's not really just about getting workers into Sydney, it's actually often the opposite. It's actually about getting people out of Sydney into Newcastle. And so that's the first bit we want to, you know, the new High Speed Rail has been talked about for a long time in Australia. I'm trying to not bite off more than we can chew. We're trying to do the first section where we know there's large population, where we know the cost benefit will stack up. And then, you know, we've got a long way to go yet before we start building, and then, you know, once it's here in Australia, I know that there'll be lots of other interest in communities and lots of other work done to take it beyond those parts. So we're looking already at, how do you get it into Parramatta, how do you get it into the new Western Sydney International Airport, but really, to make those economic connectivity links, and really, that's the focus of it, as opposed to it just being about getting trains, getting quicker trains in, I'd love one in my hometown in Ballarat. I wouldn't mind for High Speed Rail to Melbourne, but that's not coming anytime soon. We've got to bite it off in chunks and do it realistically.

FIONA POOLE: Okay to the skies. Now, at the start of the year, the Federal Government threw its support behind Rex Airlines. In fact, you took on a lot of dollars of their debt. We're hearing this morning that administration has been extended until December. How hopeful are you, at this point, that another business will purchase Rex? 

CATHERINE KING: Well, I'm very hopeful. The administrators came to us when, as the administration period was ending, to say they wanted to go to the Federal Court to extend the administration period so that they could really land a commercial bidder. And that's been what we've been trying to do to support the voluntary administration. To do that, we want to see a commercial bidder come into the market and do that. They're working now with the shortlisted bidders for Rex Airlines, and they'd asked for that additional time to get that surety and that sorted out. That now finishes in December. We're continuing to, my department continues to work with the administrators to keep that going. I do, again, want to thank customers who continue to book on Rex Airlines. That's actually been really important, being able to keep the airline flying, and being able to keep that money flowing in, and to be able to keep our customers on. We put in place, obviously, a guarantee to make sure people felt confident that they could book and they would either get their flight or they would get a full refund for their flight if it didn't go. And so that's been really good. We actually haven't had to draw down on that, as I understand it, because the flights have continued to go, and customers have continued to book, and that's been really important. We've taken on, we've basically bought out the debt so that we're now the major creditor in order to allow that administration to really move forward.

FIONA POOLE: So it sounds like you've got quite a few bidders. You're confident that you'll get us out.

CATHERINE KING: Well, that's obviously going to be up to the administrators. You know, it's looking positive, but, you know, we're not anything can happen. As you've seen, aviation is a really fickle and difficult business. It's got a lot of costs in it to run this airline in particular, you know, one of the problems that it's got is an aging fleet of aircraft that are very expensive to replace and very hard to replace. The Saabs are now sort of coming offline all over the place, so difficult to get parts. So that's one of the one of the things is that, you know, there wasn't a lot of long term planning for this, this airline in terms of fleet renewal, and that's sort of one of the challenges the administrators have had to tackle in getting a buyer. It's very costly to get that fleet renewal in. It's costly to run an airline at the best of times, but owning your fleet or leasing aircraft is really one of the one of the very big costs that you have in aviation.

FIONA POOLE: And does the Federal Government stand by their announcement earlier this year that they will own it if there isn't a buyer? Will you stand by that?

CATHERINE KING: Yeah, absolutely. That is what we've said we will do. We think it's too important not to have a sound, strong regional carrier. I don't want to see that fragmented any further. I think having that regional carrier in Rex Airlines is important. We're continuing, as I said, my department to work with the administrators. Our first preference is obviously to get a commercial buyer and a new gear player into the market to own Rex Airlines. It will need some support from government in order to do that, and we stand ready to do that. If that falls over, we've said very clearly that we think it's too important to fail, and we will step in.

FIONA POOLE: We've had a question here from Chris in Coffs. I think that this is something that is happening in our region quite a bit, where a lot of people are driving to Ballina, in all the Gold Coast in order to access cheaper flights. So for example, if you want a $89 flight to Melbourne, you've got to drive north for a couple of hours to Ballina to fly south, just because the flights out of the Coffs Harbour Airport are so expensive. I think it's similar in Port Macquarie. Is there anything that the Federal Government can do on that front to increase competition or to get some of these carriers to offer. I mean, what's the difference between that flight going from Ballina or Coffs or Port?

CATHERINE KING: Often, it's just about volume and how they airlines recoup their costs. It's also obviously, the longer further you fly, there's fuel costs associated with that. But largely it is about volume and demand. So it'll be the numbers, they often cross subsidize flights, so that's always challenging. And then also, you know, the lack of competition, again, that's why it's been important to try and keep Rex in the market. Because once you've only got one player, then that does make it very difficult. What we've asked as part of the Aviation White Paper we released last year is the Productivity Commission to have a look at this. There's been a few ideas floating around for a while, and none of them are easy frankly. There's views about how you actually deal with the costs of security and ongoing security at regional airports. A lot of these airports are owned by local councils as well. And I'm sure you're going to ask me a little bit about local councils shortly, but you know, often they are struggling with some of the costs of the security and ongoing costs of that. And also, then, of course, you've got, you know, do you cross subsidize regional flights with, you know, levy on other tickets across the country? So it's been lots of ideas floated. So we've asked the Productivity Commission to have a bit of a look to see whether there's any practical policy solutions we can think of that try and, you know, maintain the sustainability of regional aviation whilst looking at some of the cost pressures we've got, you know, similarly, from Darwin, the cost to get to and from Darwin are very high. And we've heard similar calls about the problems there as well.

FIONA POOLE: Yeah, I'll give you an example, flight Ballina to Melbourne next Thursday is $93 one way, it's $360 one way Coffs to Melbourne. I mean, that's, that's the price difference, $93 or $360. It is 12 to 9 ABC Coffs and The Mid North Coast and the Minister for Infrastructure, Transport, Regional Development and Local Government. We're laughing before. It's just a really big portfolio.

CATHERINE KING: I have got help. I have got a I have got another minister that helps largely with local government and Regional Development, in Kristy McBain. So I have got to help. 

FIONA POOLE: That is good to hear, because we do want you to get home at the end of the work day, at some point. Let's talk about the evolving role of local government. You know, your own federal parliamentary inquiry has found that it's just significant financial strain on local councils. We're hearing it all the time. We've gone through flood after flood, bushfires, and, you know, a number of emergencies. We've got roads that are, you know, constantly closed or down on one way, and landslips left, right and centre. Councils are really struggling to do the basics. You know, they're struggling to do roads and rubbish, and yet they're being expected to do more and more all the time. What can the federal government do to help with that significant financial strain?

CATHERINE KING: So the federal government does do a large amount now already, and obviously, local councils are creatures of state laws. I mean, they exist because state governments have legislation that puts them in place. So state governments have a really central role to play. And the federal government then looks at, where can we supplement that role, the role of state governments in funding local councils as well as, obviously ratepayers, through rates funding local councils and the services that are provided in local communities as well, we've got a big focus federally on what we do across the nation in terms of defence and all of those social security payments and the big things that we have to do as part of our budget as well. So, what we do do is we provide financial assistance grants that are billions of dollars to every single Council. We also have, just more recently, under our last term in Parliament, doubled the amount of road money that comes from the federal government. It's now $1 billion every single year. It was $500 million previously. So a billion dollars now goes from the federal government year on year, baked into the budget permanently. Councils don't have to come begging each year asking for additional money, which is what was happening previously. It's just now baked into the budget so they can do long term planning for their roads. Obviously, then have a number of competitive grants programs, and then, in addition to that, there are services that are provided that are subsidized by the government, whether it's through the childcare subsidies or whether it is aged care services. It depends on what the services are that councils are running. So that's the money that currently comes in. So I don’t have the figures in front of me for the councils around here, but it will be millions of dollars in financial assistance grants and in road funding. 

FIONA POOLE: Are you saying that there's enough? Is that what you're saying that they should be able to make it work?

CATHERINE KING: What I'm saying is we've already increased the amount of money, so we've already done that. So that's the first thing that we've done, plus also given that long term surety that they don't have to keep coming and asking each year to wait for the budget to see it's already baked into the budget permanently, that there's a billion dollars for road funding. What we did do under the previous parliament, and we will re-instigate this committee, is have a look at the sustainable, financial sustainability of local councils. We obviously can only look at the federal role in that. There may be some commentary about state funding as well. There's some states that have got rate capping, and that's created some struggles as well. But largely what the Commonwealth will look for from local governments is where are the areas that we're trying to get assistance with? So building more homes. For example, we've had a really big program, the housing support program, that has given money to councils for large scale infrastructure to bring new houses on. So really, what are the tasks that the Commonwealth is trying to get councils help with? And that'll be the focal point we bring out of the inquiry that will get re instigated a little bit later this year. 

FIONA POOLE: Yeah, housing and roads, I'm sure they'll welcome any help on those two fronts, and just finally for you in the region today is to inspect the tunnels on the Coffs Harbour Bypass, do you have anything else that you’ll be attending today?

CATHERINE KING: No that’s mostly it, but I am looking forward to getting my first coffee for the day, so any recommendations on the best coffee shops, I'm always happy to have. 

FIONA POOLE: Oh, my gosh, we'll have to do that off air, but I certainly do. Thanks so much for being with us. We appreciate your time. 

CATHERINE KING: Really great to be with you. 

FIONA POOLE: That's Catherine King. She's the Minister for Infrastructure, Transport, Regional Development and Local Government on your local ABC. And yes, of course, constantly being asked to put her hand in her pocket and dish it out to regions like ours because, you know, we all want the economic gains, we all want the social gains of infrastructure investment in our wonderful region.