Interview on ABC Radio National

DAVID LIPSON: Billions of dollars’ worth of infrastructure projects are on the chopping block with the Albanese Government announcing a snap review into cost overruns and delays. The number of projects in the pipeline has increased from nearly 150 to 800 in recent years, including dozens of small grants worth under $5 million. The Infrastructure Minister Catherine King says easing pressure on the construction sector will help drive down inflation. She joined me earlier.

Catherine King, thanks for your time. You’ve been in government for almost a year. Labor’s about to hand down its second budget. Why has it taken to this point to conclude that what’s needed in infrastructure is a review?

CATHERINE KING: Well, last October, at the October Budget we started the work of trying to repair this pipeline. It’s $120 billion over 10 years, and it was constructed really as a rolling pipeline. We did the work in the October budget where we did start to delay and we did cancel some projects because they just were simply not deliverable. But the scale of this has really come to light as we’ve started to investigate going forward for the next Budget, which is due in a few days’ time, where we started to work with states and territories about really getting a very clear understanding about what – where they were up to with projects, what their new projects were, what was happening with cost overruns, and that’s really come to light as we’ve started to move into the next Budget. And I’ve concluded the only way to deal with the mess, frankly, of what’s been left with this infrastructure pipeline is to do a short, sharp review, work very closely, as was agreed at National Cabinet, with states and territories to make sure we’ve got projects here in the pipeline that are able to be delivered, are properly costed and where the cost overruns are understood.

And we’ve got headroom into the future to bring new projects into the pipeline. It’s very clear that from when we were last in office there was about around about 150 projects in the pipeline when we last left office; there are now 800 projects in the pipeline. Over 497 of those are under $50 million. A lot of them are completely underfunded. There’s billions of dollars that are needed to actually deliver all of the projects in the pipeline. That’s new money we would have to find. And we’re just simply not in a position to be able to say today can we deliver each and every one of those projects and have we got enough money to do so.

DAVID LIPSON: So you’ve committed to maintaining the funding envelope for infrastructure at $120 billion. As you say, construction costs are so much more. How many projects will need to be cut?

CATHERINE KING: Well, that’s going to be a matter for the review. And, really what I want a very detailed knowledge of is with every single project that’s in that pipeline at the moment is can it be delivered, are states and territories stumping up the money and their share of the money to do so, when can it be delivered and if it can’t be delivered, then realistically we’ve got to be upfront with people and say, “Look, we can’t deliver this project. It’s not going to be able to be done with the money or the states and territories are not going produce this project,” and I would much rather than use that money for projects that can be delivered and we can actually build within the next decade.

DAVID LIPSON: Will each of the projects that you proceed with be subject to a cost-benefit analysis?

CATHERINE KING: Well, that’s again a problem. We’ve got projects here that are not subject to a cost-benefit analysis, and so there’s multiple projects through the entire pipeline. So, yes, one of the things we’ve asked the reviewers to look at is whether there is a cost benefit analysis for these projects and then to look at, you know, what is – you know, if it’s a small project under $5 million, like, it can be quite costly to do a cost benefit analysis, what – is it worth doing one for it or is the project just simply not to be delivered. So the reviewers will need to look at that in some detail –

DAVID LIPSON: And just to return to the question, though, the ones you proceed with, will they all be subject to a cost benefit analysis that will be made public?

CATHERINE KING: Again, we’ll make the review public and we’ll have a look at – so, there may be, as I said, smaller projects that are kept in the pipeline where that sort of level of cost benefit analysis won’t be warranted because it’s a much smaller project, but certainly it is my preference that when we proceed with these infrastructure investments that there is a proper cost benefit analysis done with each of those.

DAVID LIPSON: Just on another matter, there’s obviously quite a few areas the Government is reining in spending ahead of next week’s budget. At the same time, pressure is increasing on Labor’s backbench to increase JobSeeker. Is the JobSeeker rate too low?

CATHERINE KING: I think everybody knows that in order to live on income support payments that – at the rate of JobSeeker it’s incredibly difficult for people. I think particularly when you’ve got a budget, you know, you’ve got inflation running through the economy in the way in which it is, I don’t think anybody thinks that the JobSeeker rate is adequate for people. We said before the election what we would do is look at every single budget, the way in which we could support people on income support payments. And I’m sure that there’ll be plenty of people to look at in terms of cost of living relief in the Budget coming up in a few days’ time.

DAVID LIPSON: That sounds like a hint JobSeeker may rise in the Budget?

CATHERINE KING: Nice try, David. I know that this is a big area of concern for everybody, and I think that, you know, you’ll see plenty of cost of living relief in the Budget. We’ve been very, very attuned to what’s happening for people not just across the economy but particularly for some of the most vulnerable Australians. And, as I said, you know, before the election we said, you know, we’re not going to be able to do what we’re being asked to do in this Budget, where I think we’re being asked to increase the JobSeeker payment to a level that would cost the Budget $24 billion. I think it’s very clear the Budget doesn’t have room to be able to do that, and I think that’s been made very clear. But what we’ve said before the election, what we’ve said, you know, as a Labor government, we do want to make sure that income support payments across the board are looked at every single Budget and, of course, this Budget is the first full Budget we’ve had, and we’ll certainly be looking at those areas.

DAVID LIPSON: Catherine King, thanks for your time.

CATHERINE KING: Thanks very much, David.

DAVID LIPSON: That’s the Infrastructure Minister.