Australia is becoming a world-leader in infrastructure
Thanks, Michael and importantly—#AFRInfra18—we need to get that trending!
Now if I can go to a business awards night in Wagga Wagga on Saturday night, called the Golden Crow Awards and get #GoldenCrow trending, then you fine people can certainly get #AFRInfra18 trending right across the nation. And you've got two days, I only had a few hours!
I was absolutely gratified to see Michael worked in the fact he makes a daily visit to the gym in his introductory remarks. Well because I am here today I have missed out on going to the gym. Yep—that's now 33 successive years I have missed out on going to the gym. You can always make excuses for not going to the gym—I can. I do! I have done it for 33 years in a row.
But Governments can't make excuses for not providing the sorts of infrastructure Australians want, demand, need, expect and deserve.
And as Michael pointed out, we have seen just recently the Premier of NSW Gladys Berejiklian going on the front page—going on the front foot, indeed, more important than the front page—going on the front foot and saying she was going to make sure that congestion-busting was something that she was putting front and centre of her Government for the next 12 months leading up to the next election.
And I know we have got an infrastructure-building Prime Minister in Malcolm Turnbull, for whom congestion-busting is also a priority.
So it is great to be here with the Australian Financial Review's Editor Michael Stuchbury, Anthony Albanese I know is going to join us soon and you people have given up your day, from your busy schedules, to be here. I acknowledge you as well.
I congratulate the AFR—a fine newspaper. I'll say that because I want some fine publicity out of that fine newspaper! But I acknowledge them for hosting this summit and the other summits they put their money, their sponsorship and their time in to. I addressed the retail summit in Melbourne last year and it was a very good discussion point for people such as yourselves—stakeholders—for whom that particular topic is important, and the list of speakers presenting their thoughts and knowledge over these two days is very impressive. It's testament to the quality and depth of talent in the Australian infrastructure sector.
The Federal Government is committed to building a stronger and more prosperous Australia through our National Economic Plan for Jobs and Growth.
Infrastructure is a key pillar for this Plan—for this blueprint.
Infrastructure supports economic productivity and efficiency; the liveability and economic capacity of our communities—be they metropolitan, be they regional—the connector between people and markets; and the safety of our citizens.
And energy, telecommunications, transport and water infrastructure are key inputs to the efficient operation of daily life and of business.
The Liberal and Nationals Government has taken a leadership role on infrastructure reform—delivering better outcomes for our industries and for our communities.
Today I want to focus on the changes to the demands on—and delivery of—Australia's transport network. Across road and rail, and across our cities and in our regions.
But before we look at Australia's emerging importance and position on the global stage, it's important to consider what makes any country a global leader in infrastructure.
As many in this room will already be well aware, the most important pillars that underpin and lay the foundations for good quality infrastructure planning and delivery, are recognised by leading experts as:
- Strong governance and rule of law
- Stable regulatory frameworks
- Efficient permits, approval and launch acquisition processes coupled with transparent planning
- And procurement practices backed up by a pipeline of infrastructure projects.
So what is Australia doing to become a world-leading infrastructure nation?
Firstly we are focussed on getting more from our infrastructure investment and achieving better integration between our infrastructure needs and land use planning, especially in and around urban centres. And of course that requires the three tiers of Government—making sure that we are communicating across local, state and federal spheres.
We are becoming a more informed investor and having a say in where and how Commonwealth taxpayers' funds are invested.
And we are encouraging those who are best placed and have the skills to fund and deliver the infrastructure we need—especially the private sector—and capitalising on technological advances.
We are seeing rapid developments in our Asian region and around the world continuing to challenge our competitiveness, being played out to a large degree through nations' infrastructure development.
We cannot rest on our laurels—and we won't.
Australia's cities have an enviable reputation for their liveability and beauty globally. When you fly into Sydney it is always great to see the Harbour Bridge and the Opera House. It is always … it makes me think of that Peter Allen song and what a fantastic city Sydney is. And if you go to Brisbane or Melbourne or anywhere around Australia, they are fantastic, globally-recognised cities. It can be easily lost if we can't get congestion under control—we all know that—and if we don't get better at planning for the long term.
Australia's infrastructure is essential to boost our productive capacity and better connect us to international markets, particularly as though we have signed those free trade agreements with South Korea, Japan, China, Peru, the Trans-Pacific Partnership 11—and continue to develop our regions, including northern Australia.
The increased role of the Commonwealth in the infrastructure landscape has required the Australia Government to take more leadership and strengthen institutional arrangements.
One example of leadership in Australia—that's driving strong processes for quality infrastructure planning and delivery—is the establishment of Infrastructure Australia.
In 2014 legislation was passed to implement that Coalition's vision for this expert advisory body to have greater independence and improved transparency.
And this reform is seeing great dividends. We have been able to bring in more expertise through an independent board and chief executive officer.
We are meeting our commitment for projects with over $100 million of Commonwealth investment to have their business cases assessed. So any project over $100 million has to have their business case assessed.
Infrastructure Australia is supporting the quality of decision-making in government and to improvements in the projects governments are investing in.
In this regard, I would like to acknowledge here today the fine contribution of Mr Phil Davies—as Infrastructure Australia's inaugural CEO—to helping bed down the Coalition government's strengthened arrangements for infrastructure decision-making. Thank you Phil.
I also want to acknowledge Julieanne Alroe, the new Chair of Infrastructure Australia with whom I had a very long conversation about the needs and demands and wants and expectations of infrastructure for 25 minutes in a lift recently. And when they came to fix the lift—to get us out—that was fantastic too!
You might laugh, but it's actually a true story! Didn't we Julieanne—we had a fantastic discussion! I won't say where it was, but it's amazing when you get locked in a lift with somebody you want to make sure that's somebody you actually like! I like Julieanne!
Phil has decided that it is time for him to move on to new challenges, and I wish him well for the future and I thank him for what he has done.
Working with all levels of Government, integrating infrastructure and planning decisions across all three levels of government in Australia is essential to meeting the future growth challenges of our cities.
The Government's Smart Cities Plan sets out our vision for Australia's cities, and its commitment to enhancing them through smart policy, smart investment and smart technology. And we all know how technology is going at such a pace these days, it's hard to keep up. The prosperity of our cities and regional centres, and their overall economic activity, is an issue of national significance.
Better engagement across all levels of government is an important change in the direction of infrastructure and transport planning and delivery.
But it is not only in City Deals.
Another important initiative is the development of a National Freight and Supply Chain Strategy.
Australia's freight challenge will almost double over the next two decades and coordination at all levels of government is required to ensure the sector can build on its almost 10 per cent contribution to GDP today.
This Strategy will tackle head on maintaining our markets through international competition; minimising costs for producers and consumers; and improving safety, security and environmental sustainability of freight movements.
Robust governance, capable institutions, leadership and consistent regulatory frameworks, combined with well-planned and procured projects, all contribute to the delivery of successful viable infrastructure.
It is this type of approach to investment and a desire to build stronger and more sustainable communities which has given the Government the confidence to invest in infrastructure, at record levels.
Australia is a continent where major, nationally-significant projects can involve long distances and big costs which makes proper planning a crucial, critical and absolutely important element of success.
The Bruce Highway—Brisbane to Cairns—and Inland Rail, Victoria through NSW to Queensland, both extend 1700 kilometres—that's Britain to Spain, for example.
But governments cannot fund all infrastructure projects. Increasingly innovative financing solutions including public-private partnerships, balance sheet leveraging and alternative revenue streams such as value capture are being employed for major projects.
In doing so, government has helped to strengthen the private market for infrastructure.
Australia's PPP spending on infrastructure projects has grown from around the start of the century—and has consistently passed the $5 billion a year mark since 2013–14—accounting for more than 30 per cent of total transport construction.
Our own Australian Budget recognises, critically, that industry and the community want and need long-term certainty in infrastructure planning, to move beyond the short-term political cycles.
In the 2018 Budget, for the first time, the Australian Government has committed to a credible, decade-long pipeline of nationally-significant infrastructure projects focused on increasing productivity and creating new job opportunities over a ten year period. Making sure we roll out the investment, we roll out the infrastructure that we need with a long-term vision in sight.
Our pipeline targets the biggest transport problems across the country and is based on the best evidence available, by utilising Infrastructure Australia's priority list.
We are marking out, now, the critical projects that we want to see planned and delivered over the next 10 years.
This will provide much-needed certainty, and drive the planning and early works to ensure that new projects are ready to roll out when the projects we are currently working on are complete or near complete. These projects are at different stages of planning and readiness, as we all know.
And at the same time, there are hundreds of projects still under construction from previous Budgets.
An early commitment of funds from the Commonwealth gives states and territories the certainty they need to do the planning and design of long-term signature projects, knowing that the funding will be available once it stacks-up.
This reduces the risk of essential nation-building projects being left on the shelf because of political uncertainty.
A rolling pipeline also means new projects can be committed to over time, once the need has been identified.
This new approach to infrastructure signifies a move away from the Australian Government's historic, more reactive, approach to investment in infrastructure and the transport needs we have always had.
Real and significant funding, of course, is important. As Minister for Infrastructure and Transport, I am proud of our $75 billion decade-long infrastructure pipeline—which includes $24.5 billion of funding for new projects in the most recent Budget.
The level of infrastructure construction work nationally over the last decade has been driven by many factors, such as the rise and fall of the mining boom, the impact of the GFC on both private sector investment and all government's stimulus packages and the shifting priorities of state governments.
However, the Australian Government continues to take a greater role in driving investment, particularly in transport infrastructure investment.
And while it's a 10-year pipeline, we are investing more than $8 billion every year within the Budget Forward Estimates
It's a massive funding commitment that will give the states and territories the incentive to get moving on planning these major projects.
And I was fascinated go to the Northern Territory recently where we were looking at a road project which is going to go through the heart of town. It's a fantastic project—significant funding—and the journalist just couldn't get her head around the fact this is not needed now, but this might be needed over the next few years, why are you investing in it now? Why are you doing the planning on it now?
Well the fact is we do need that plan. We do need that vision. And that's what we as a Government are committed and focused on providing. And this particular road—which will be a duplication of sorts—is going to mean less congestion for the Northern Territory, for Darwin. Not that I appreciate Darwin has quite the congestion that Sydney or Melbourne or Brisbane has, but the fact is we are planning for the future. We are getting it done early, so we don't have that congestion when Darwin—which is predicted to have a growth in population substantially in coming years… so as I say again, it is a massive investment over a ten year period.
We are delivering a larger proportion of our infrastructure commitment through financing and equity mechanisms, which helps ensure the taxpayer gets a better deal.
There are those that like to argue alternative financing is just about clever Budget accounting.
But the Government knows traditional grants to State and Territory governments are not the only—or always the best—way for the Australian Government to support the delivery of major infrastructure.
Looking for innovative approaches to financing allows us to partner more effectively with state governments and with industry.
It allows us to be more involved in a projects conception and delivery—giving greater visibility over the quality of projects—and of course involving IA as well.
And importantly it allows us to ensure we have maximum bang-for-buck for taxpayers. And that's important—it's absolutely critical—because taxpayers know the sort of infrastructure we are investing in has to have that dollar value for them.
Investigating these opportunities is an important element of the Australian Government's shift to become an ‘informed investor’.
Our $5.3 billion equity injection towards the new Western Sydney Airport and our $9 billion equity injection to deliver the Inland Rail clearly demonstrate that there are equally valid alternatives.
And regardless of whether it is equity or a grant, we all see the activity that is happening here in Sydney and around Australia. This only happens with real money going into the construction of critical infrastructure.
The key message is that we think carefully about the most efficient funding and financing mechanism on a project-by-project basis to get the best deal for Australians, to get the best deal for taxpayers, and we are backing it up with record levels of investment.
All this is a key component—as the Prime Minister, Treasurer and I have stressed—of delivering on the Coalition's economic plan for economic growth, more and better trade—and now a million new jobs five months inside our five-year target we set when returning to Government in 2013.
In previous Budgets, the Western Sydney Airport and Inland Rail were significant Coalition commitments and I see that both these major projects will feature in Case Studies on Day Two of this Summit.
I was delighted to be at Peak Hill at Central Western NSW when the first 600 tonnes of steel was dropped off for the inland rail project on January 15 this year. It was a momentous and historic day. We have been talking about inland rail since 1890. We are getting on. We are building it.
The 2018 Budget delivers not just on some big ticket items flagged by the Coalition, but on infrastructure needs Australia-wide.
Let me underline the national, the nation-wide, strategy we've adopted. For example:
In New South Wales, the 2018–19 Budget committed up to $971 million towards a bypass of Coffs Harbour. Approximately 15,000 vehicles a day currently travel through the Coffs Harbour CBD along a route that includes 12 sets of traffic lights. The bypass will reduce travel times for all road users by allowing heavy vehicles to bypass the CBD, alleviating congestion on local roads.
If you want to see the Big Banana in future—when that project is finished—you will have to divert off and go through Coffs. That's one of the downsides, but it will save lives. It will reduce travel times, particularly for our heavy vehicle industry.
In Victoria, we will invest up to $5 billion towards a rail link between Melbourne's CBD and Tullamarine, with funding for construction conservatively booked in the Budget as a grant until further work on a Business Case has been done.
This project will address growing passenger demand, helping to alleviate congestion on the Tullamarine Freeway. Melbourne Airport is Australia's second busiest, handling 34 million passengers in 2016. And if the figures are right, Melbourne is going to become our biggest city in the future. And so we need to make sure that we have the infrastructure for the Victorian capital.
In Queensland, we have committed $390 million to upgrade the Beerburrum to Nambour Rail Upgrade.
The North Coast Line between Beerburrum and Nambour is currently a single-track line servicing both passenger and freight transport, and conflict between the two is constraining growth.
We have also committed an additional $3.3 billion towards improving the Bruce Highway in Queensland, including up to $800 million for the construction of Cooroy to Curra—Section D, taking our total commitment to vital road safety and productivity improvements on the Bruce to $10 billion.
And I stood alongside the Member for Wide Bay—a former police officer—Llew O'Brien. He far too many times had gone to people's houses to do the ‘death-knock’ at very early hours or very late at night. And he was absolutely delighted—indeed relieved, indeed quite emotionally moved—when that $800 million was announced. Because he knew—more than anyone—that this was going to save lives. This was going to not only increase productivity but save lives. And that's what infrastructure should be all about.
In Western Australia, the current Perth road and rail network is expected to reach capacity by 2031. We have committed to support METRONET Stage 1, with a further $1.05 billion committed in this Budget, bringing our total investment to $2.33 billion.
The Government's investment in METRONET (and other infrastructure) will underpin a new Perth City Deal and a shared long-term vision for the future growth of that fine city.
In South Australia, we have committed a further $1.4 billion to the upgrade of the North-South Corridor and up to $220 million to continue the electrification of the Gawler Rail Line in Northern Adelaide. And I know—speaking with the Premier Steven Marshall just last week—I know how pleased he is with all of that.
Passenger numbers on the Gawler Line have grown almost a third in the last decade and the inability to operate electric railcars on this part of the network results in underutilisation of the fleet, restricting flexibility and capacity.
In Tasmania, we have committed up to $400 million to a Tasmanian Road Package, which will initially focus on upgrades to the Bass, building on the $400 million for the Midland Highway that is already well and truly being rolled-out in partnership with the Tasmanian Government.
The Bass Highway is Tasmania's busiest freight route and is a key to Tasmania's growth and prosperity.
The Bass Highway connects Tasmania's two highest volume ports at Burnie and Devonport—I was there just last week—as well as major agricultural and industrial areas.
Beyond traditional state boundaries, the Government understands that an integrated freight and passenger network won't respect state boundaries.
That's why the 2018 Budget has delivered $3.5 billion for the Roads of Strategic Importance initiative—with $1.5 billion of this carved out, dedicated, for a Northern Australia package, to continue the Coalition's visions for development of the north.
We're upgrading key corridors across northern Australia to improve road reliability, better connect industry to market, and provide better access for remote communities, many of them Aboriginal remote communities.
Inland Rail is a once-in-a-generation nation-building project.
It is a $9 billion plus strategic investment in our future that will link freight movements north to south and indeed connect with east to west, particularly in Parkes which is the heart of that intersector between east-west, north-south.
Complex engineering solutions through the Great Dividing Range will be delivered through a PPP to ensure that innovation in delivery provides the best long-term outcomes and benefits taxpayers.
In conclusion, I just want to point out that robust business cases are important. That funding needs to be properly and fairly shared. That private investment is critically important. And I want to stress that we are committed to a long-term, credible pipeline of real funding.
We are building infrastructure—whether it's aviation, whether it's road or rail—that Australia needs and we are making sure that we get on with the job.
And with that I welcome Anthony Albanese—who's just arrived. Give him a clap!
Thank you, ladies and gentlemen.