Transcript - interview - ABC Radio National - RN Breakfast with Hamish MacDonald

HAMISH MACDONALD, HOST: Well, the Inland Rail is supposed to connect freight from Brisbane to Melbourne, but its budget had already ballooned to $31 billion and counting, and there’s no firm date on when it might be complete. Despite an independent review finding serious governance failures, Kerry Schott, who led the review, has told RN Breakfast it’s still a very necessary project.

KERRY SCHOTT, AUTHOR, INLAND RAIL REVIEW (GRAB): It’s absolutely essential that this line gets built through from Brisbane through to Melbourne, and its main purpose is to carry freight from the north of our country down to the south. It’s absolutely essential that the line gets finished.

HAMISH MACDONALD: Catherine King is the Infrastructure minister, she joins us now. Good morning to you.

CATHERINE KING, MINISTER: Good morning, Hamish.

HAMISH MACDONALD: Is the government committed to funding the full length of this rail project from Brisbane to Melbourne?

CATHERINE KING: Well, we’re certainly committed to getting this project done. It’s difficult given the review – and this is the project we’ve inherited frankly from the National Party, this was their pet project, and the review was pretty damning on that. We’re determined to get this project done, but there is at the moment and according to the review we cannot even be certain about the costs of this project. So, we’ve got a lot of work to do frankly to clean the mess up that’s been left to us but also, pardon the pun, to get this project back on track.

HAMISH MACDONALD: Can I clarify what you mean, though, by “getting this project done”? Because I understand you’re saying that you will prioritise it from Melbourne to Parkes in regional New South Wales. When you say “getting it done”, do you mean from Brisbane to Melbourne?

CATHERINE KING: Yes, we do, we do. This is an Inland Rail Project that is to take pressure off our roads along the east. We know that, you know, in 2020 there was 223 bill tonne kilometres freight task, and we know that by 2040 that’s going to increase to 337 bill kilometres, tonne kilometres, and that’s a really significant increase in our freight, and that’s a significant increase on trucks on the road. So, we want to try and transition that to rail. We also know if we’re decarbonising transport that doing that is incredibly important.

But I have to do this responsibly. I have to make sure that we prioritise where we begin to see some revenue coming back in for all the dollars that taxpayers have put into this project. So that means, you know, certainly for this term of government we’re focusing on getting it to Parkes by 2027 by concentrating on that area of the build, at the same time continuing to do the planning work, corridor acquisition, land acquisition along the route beyond that, including in Queensland. So, work to be done –

HAMISH MACDONALD: But on that, though, as Kerry Schott pointed out, the primary purpose – not the only purpose, but the primary purpose – of this is to get produce and goods from Queensland south. I mean, it does go back in the other direction, but the bulk of it would be heading in that direction, heading south. What’s the purpose of this if it just goes from Melbourne to Parkes?

CATHERINE KING: Well then it also then links into the Perth route. So, you then can start to actually get the route from Perth. It also allows you to get into Newcastle and into Sydney as well. So it begins to connect Inland Rail to other parts of the rail freight network, and that allows some revenue to start coming in. So that’s why to concentrate to get it to Parkes. We know that where largely the planning approvals are done. We know that that’s where the building can start, and then we need to start the work beyond that.

But right at the moment those planning approvals in Queensland have not– they’re not there. So we’ve got work to do to get all of that done. But in terms of construction, we’re concentrating on construction to Parkes.

HAMISH MACDONALD: The Schott Review advised you essentially that you should reject the $31 billion price tag on this full project that’s been offered at the moment. Do you have a view as to how much it should cost to complete this?

CATHERINE KING: Well, we don’t know at this stage. And, again, that’s the absolutely shocking thing about this review. You know, this was Barnaby Joyce’s pet project and, frankly, I think it’s an indictment. And you can certainly use it as an example of why the National Party should never be allowed to be in charge of large-scale infrastructure projects. One of the recommendations Kerry has made to us which we’ve accepted all of them – but is to appoint an individual – independent value cost estimator and value engineer. We’ve got to do that so that we can get a handle on the costs particularly in that Queensland link. She did not have confidence in the information she was being provided that that estimate was correct. And, again, this is two years ago we were told this project was going to cost $16 billion. We’re told the best estimate we’ve got is $31 billion. It may come in a bit under that, but it may also come in a bit over that – we just do not know at this stage.

HAMISH MACDONALD: Can I clarify why you’re pointing the finger at Barnaby Joyce when the problems with this lie in Queensland ultimately?

CATHERINE KING: Well, you’ve got a minister who was responsible for the delivery of this project. This is a Commonwealth project that requires, of course, planning approvals through multiple local council areas in three jurisdictions. So, I would say, frankly, if you’re the minister responsible for this project, you’re the minister responsible for the delivery of this project.

HAMISH MACDONALD: Sure, but isn’t there some responsibility at the feet of the Queensland Government?

CATHERINE KING: I would certainly say that Barnaby Joyce and his relationship with the Queensland government may or may not have assisted with this project. But I would certainly say that this is – you know, this is the National Party’s vanity project. This has been the project that was absolutely –

HAMISH MACDONALD: What are you saying? That the issues with this relate to the relationship between Annastacia Palaszczuk and Barnaby Joyce?

CATHERINE KING: No, not at all. No, I shouldn’t have said that. That’s not my intention to say that. I think that really what’s happened here is that you’ve had a minister who’s been not paying attention to the cost, not paying attention to the delivery. The report itself particularly says very clearly that, you know, in terms of the board appointments that the minister rejected, putting in a skills-based board, there were definitely some decisions made that did not assist in the governance of this project. And I think certainly, as I said, I think that there’s probably, you know, some work that needed to be done in Queensland that could have been done a little bit better.

HAMISH MACDONALD: I mean it sounds like you’re somewhat suspicious about some of the components of the way this is done. Are you going to go beyond this report? Is there going to be any kind of investigation?

CATHERINE KING: No. Certainly the review – the reason that I asked for the review in the first place is obviously from opposition, you know, there was a Senate inquiry. We could see that this project seemed to be getting into trouble. We didn’t know where or what was happening. We were certainly hearing about delays, and I wanted to get a really good handle on where all of the problems were and what the actual issues were in relation to this project. And I think, you know, Kerry has done a terrific job. I couldn’t have picked anyone better to actually undertake the review. She’s made 19 recommendations, and those recommendations we’ve accepted. It’s now my job and Katy Gallagher, the other shareholder minister’s job, to put those into place and to really get the governance, the good skills base, get a real handle on the costs of this, get a real handle on where the problems are and proceed with the construction of this project to Parkes and get the planning approvals for the rest of the project underway so we then can start construction on those other elements of the project.

HAMISH MACDONALD: So realistically are we talking decades before this project is complete?

CATHERINE KING: Well, at this stage to Parkes will take to 2027, and the estimates of getting it to the end point of Ebenezer in Queensland once the business case has been done for whether that’s where the appropriate location for the terminal is there is around ‘30-31, and that is quite some time away. But it’s well beyond the estimates that the previous government were making. This was meant to be open in 2026, and I think it’s pretty clear that it’s a project that has not been managed well.

HAMISH MACDONALD: To another issue this morning, the Victorian Premier, Daniel Andrews, according to the newspapers, is reportedly in talks with the government, the Federal Government, over a potential budget bailout. He’s already foreshadowed a 10 per cent cut to the public sector. Why should the Federal Government be bailing out the Victorian Government?

CATHERINE KING: Well, of course I wouldn’t describe that – I mean, obviously when it comes to infrastructure, for example, we partner and invest with infrastructure projects continuously with all state and territory governments. And they are important. We do that with housing funds, we do it with public health and hospital funding. And I would imagine that all states and territories as they lead into their budget and we lead into our budget are having discussions about what the Commonwealth is intending to invest in in each state and territory and how that affects their particular budget. But I’ll leave it to the Treasurer and Premier and Prime Minister to talk about those discussions.

HAMISH MACDONALD: But there is, as you acknowledge, a financial hangover – that’s the way it’s been described in the Fin Review this morning, from the lockdowns and the impact of COVID on the Victorian economy. Is it reasonable for taxpayers across the country to be assisting with what is ultimately stepping in financially for the Andrews Government?

CATHERINE KING: I think all budget across the country are under pressure. The Federal Government – you know, we’ve obviously been left with a trillion dollars of debt. We’ve been talking about the importance with the cost of living as it is that we want to put in this budget responsible relief for people. We need to be able to ensure that we get our supply chains under control and we invest back in those, which is why it was so important to have the National Reconstruction Fund, and, of course, we’ve got restraint that we need to put in our own budgets. We’re concentrating on making sure we put a Commonwealth budget together and, of course, that will have an impact on states and territories as we invest in partnership, whether it is in infrastructure or whether it’s in public health services.

HAMISH MACDONALD: Catherine King, appreciate your time this morning. Thank you very much.

CATHERINE KING: Good to talk to you, Hamish.

HAMISH MACDONALD: That’s the Minister for Infrastructure, Catherine King.