Transcript - Radio interview - ABC Brisbane with Steve Austin

STEVE AUSTIN [HOST]: Well, Queensland's Treasurer, Cameron Dick, is calling on the Commonwealth to reconsider funding cuts for state infrastructure projects. As you know, a Federal Government review has seen funding halted for nine different projects in Queensland. Several others, like the M1 Pacific Motorway from Daisy Hill to Logan, will be put on hold until more planning work is done. The Federal Infrastructure Minister Catherine King, has kindly agreed to join me this afternoon. Minister, thanks for coming on.

CATHERINE KING [MINISTER]: It's a pleasure to be with you, Steve.

STEVE AUSTIN: I want to play you something that Cameron Dick said in Parliament yesterday. He's the Treasurer of Queensland.

[Excerpt]

STEVE AUSTIN: Catherine King, he's saying you're misleading us. Can you answer that, please?

CATHERINE KING: So, what we've done as part of the infrastructure review that was undertaken by three independent experts to look at project by project, how we can deliver the Commonwealth's $120 billion co-investment with states and territories. They delivered that report to me and we've been going back and forth with states and territories for some weeks now on the projects that we are looking that were recommended for cuts, getting states to provide more data. So, there should not have been any surprises in anything that we announced in the independent review.

It is true we have withdrawn Commonwealth funding for nine projects. Two of those, of course, are commuter car parks that just simply cannot be delivered. The value of those on the books is about $300 million. But they, in fact, if we built all of nine of those projects, there'd be hundreds of millions of dollars more required. At the same time, we've managed to reinvest or provide more funding, additional funding for a range of cost pressures across projects in Queensland that value up to around $2.5 billion. Things like finding the additional money that's required to build the Rockhampton Ring Road, building the Commonwealth contribution up to $1.2 billion. Obviously, really importantly, the Brisbane to Gold Coast heavy rail, we've put in an additional $1.8 billion in that. So, there aren't any, while there are nine projects being cut from Queensland, there is additional money coming into Queensland.

STEVE AUSTIN: All right, well, I want to break that down piece by piece. Just can you clarify for me, did you have full agreement with Queensland over your plan? Because Cameron Dick has said in Parliament that basically you're misleading us, that it's not true.

CATHERINE KING: I'm not really interested in going into the ins and outs and argy bargy between the Commonwealth and states over various things. I think those sorts of things, we have private conversations. Some people choose to say things in public and that is fine. But what I will say is that I have always had a very strong collaborative and good working relationship with all of my Queensland counterparts, Cameron, when he held the Infrastructure portfolio as well. I treat people respectfully and work with them collaboratively. Certainly in terms of this, I understand if Queensland is saying that they don't agree with the decisions that we've made, but what I would say really clearly is nine projects at the value of $300 million would require a lot more to build them. But we are investing a lot more money back into Queensland to actually make sure the projects that remain in the pipeline can be delivered and we're dealing with the cost pressures of those projects.

STEVE AUSTIN: He's not just saying he won't agree, he's saying he's not going to cooperate.

[Excerpt]

STEVE AUSTIN: So, what will that mean?

CATHERINE KING: Well, that's really a matter for the Queensland minister. We obviously have made it very clear that in terms of the nine projects that we won't be making Commonwealth funding available for those. If the minister is now saying that he doesn't wish also to receive the extra $2.5 billion, I would be very surprised.

STEVE AUSTIN: My guest is the Federal Infrastructure Minister Catherine King, you've said yesterday that the amount of money that Queensland receives has not been cut at all. What was the amount? What would you give me the final bottom line figure that you say was agreed to if it's not been cut? You say you've actually added two point something billion.

CATHERINE KING: Yeah, that is correct. I don't actually have the total figure in front of me on the papers that I have here. But there is no cuts to funding to Queensland. In fact, there is additional funding coming to Queensland. No cuts to the Bruce Highway funding. No cuts, in fact, as I said, we've increased money to make sure we can actually deliver the Rockhampton Ring Road, bringing the Commonwealth contribution to $1.2 billion. We know how important that project is.

More money, the 1.8 billion for faster rail, billions of dollars more to meet the cost pressures that we know are in projects right the way across the country. We want to build infrastructure. We don't just want to see projects like the commuter car parks, frankly, that are sort of an Alan Tudge legacy. And we're subject to a pretty damning audit report. We don't want to see those projects that can never be built just left sitting with the money not actually being used in the budget. We actually want to build infrastructure and that's what we partner with the Queensland Government to do.

STEVE AUSTIN: Catherine King, the Treasurer of Queensland, Cameron Dick, says essentially that if there are cost blowouts that you should fund that as well.

[Excerpt]

STEVE AUSTIN: That's why he's saying you're cutting that costs have gone up, so you should fund that no matter what. Do you disagree?

CATHERINE KING: Well, again, we have provided almost $2.5 billion to actually help the Queensland Government with cost pressures and that's what that's about. The other thing that we have done, which will actually make it much easier for the Queensland Government to schedule and build infrastructure projects in our corridors, is that we have actually pulled together all of the projects in various corridors and we've said to the Queensland Government, what we would like you to do is be able to sequence those projects, make sure that you actually can sequence and then deliver those. And then obviously we see it as a rolling program that when you have finished those projects, you'll come back to us and speak to us about further money that might be required.

STEVE AUSTIN: That says to me that you're unhappy that Queensland might be fudging the figures or trying to load extra bits to get more money out of the Commonwealth.

CATHERINE KING: Well, I think it's really unhelpful. I think it's a bit of a sport in this country for Commonwealth-state to fight each other. That's not the sort of minister I have been. I always work respectfully, make sure that we've all got full information and I think that's what I've done and will continue to do with my Queensland colleagues. But what is really important is with things like the Bruce Highway, the Commonwealth is currently committing over $10 billion to that incredibly important project. That money stays. We want that to be delivered and we'll work cooperatively with the Queensland Government to deliver that.

STEVE AUSTIN: The Premier of Queensland, Annastacia Palaszczuk, has said, your move is outrageous and then said this.

[Excerpt]

STEVE AUSTIN: Catherine King, have you been trying to rearrange the traditional funding model to 50-50 instead of 80-20?

CATHERINE KING: So, what we've done, there is no traditional funding model of 80-20. That's a convention that the previous Liberal Government put in place particularly the National Party. And frankly, what we have found is that that means has, in fact meant we are not getting the share into our regions as we would like. Basically what that would mean, so, this is for future projects going forward, nothing that is in the pipeline at the moment. Obviously, we continue to work on all of those. What it means for future projects when the state comes to us and says, well, we would like you to spend another $10 billion on the Bruce Highway, and we say, yes, we'll spend $10 billion, we would like the state to also put in $10 billion as well because we think that is the way in which we get better funding decisions together. We are co-investing in these important projects and it means we are delivering more in our regions together.

STEVE AUSTIN: Well that's a 50-50 funding split.

CATHERINE KING: It also means that we share the risks of the cost escalations as well and we make sure that we are driving efficiency throughout the system. So, in fact, if you took what we're saying about the Bruce Highway today, so at the moment, our 10 billion contribution from the Commonwealth, the state puts in two. There's $12 billion for the Bruce Highway that we've got in total. What we're saying, if we put in ten, we'd really like the state to put in ten as well, which would be a $20 billion contribution to the Bruce Highway.

STEVE AUSTIN: Which would be a 50-50 funding split if that happened?

CATHERINE KING: That is correct. That is what we're pushing to say, that that's what it should be. And reminding everyone that this is a convention. It's not something that has ever been set in stone or law, that that's how things would be funded and that is how all of the projects in all of the urban areas largely are funded. There are some projects that are 70-30, there are some that are 60-40, there are some that have got percentages that are very different to that. It's a convention. It's something we see will actually provide additional money coming into our regions, but it also means that we are significant co-investors together and that we both share the benefits and share the risks of delivering those projects.

STEVE AUSTIN: Federal Infrastructure Minister Catherine King is my guest. This is ABC Radio Brisbane. Are you concerned that the state of Queensland is underfunding our regional areas or remote areas in this state, Catherine King?

CATHERINE KING: I think you've got real challenges and I think Western Australia has similar challenges, but not the population density in some of these areas. There are really big challenges. It's why we know you've got a really decentralised population. It is why we're putting in $10 billion on the Bruce Highway. It's why we're funding things like the Rockhampton Ring Road. But we also know there are urban pressures as well. So, what we've done with the infrastructure pipeline, the review found, unfortunately, is that because of the way in which the pipeline had been mismanaged, there are simply two things were happening. The first is that there are lots of projects -

STEVE AUSTIN: Who mismanaged? The state government or the previous federal government?

CATHERINE KING: The previous federal government, it's the Commonwealth pipeline. So, I don't make commentary about what the state is doing that's a matter for them. But in terms of what I am responsible for, when I inherited this pipeline, it was very clear it had not been managed. It went from 150 projects to 800 projects over the last ten years. So, I've got 800 projects sitting on the books before the review. A lot of those came on in the lead up to the 2016 and 2019 election campaign. A lot of them, like the commuter car parks, did not have enough funding allocated to them to even deliver a small amount of car parking, let alone actually what they had promised to do. So, I've had to get rid of those projects because they really couldn't be delivered, or I'd have to find a lot more money. There's cost pressures then as well, because a lot of projects have just not happened again, because sometimes because there hasn't been agreement with the state to go ahead and build them when the announcement was made, and there's not been a real understanding of what the costs are.

So, I've had to try and deal with those and find money to actually get into the pipeline to build that. The reviewers identified $33 billion worth of known cost overruns, 14.2 billion of that in projects that have yet to even start construction. So, to find money for that in order to actually deliver that as well, of course, is to make sure that we're actually working with the states to actually deliver these projects. So, really, those are sort of the problems we've had to deal with. The other problem that was identified by the review is if I did nothing, I could fund no new projects from a Commonwealth perspective, for the next ten years, every time a project comes off the pipeline and is completed, basically, we weren't even getting enough money to fund cost pressures. So, I don't think anyone would appreciate us for the next ten years announcing no new infrastructure projects. What I've had to do is clean this pipeline up, work really hard, and I think, again, work really hard to try and make sure it's sustainable so we can deliver into the future.

STEVE AUSTIN: I'd like to ask you about cost overruns because you've announced that you're giving Queensland an extra $2 billion plus to deal with cost overruns on the projects that you've agreed to now. I want to play you something that the Chief Executive of the Australian Constructors Association, Jon Davies, told me. He said he thinks that the problem for Queensland is self-inflicted. Let me play you this, Minister.

[Excerpt]

STEVE AUSTIN: I'll leave it there. That's Jon Davies, the Chief Executive of the Australian Constructors Association. Can I ask you, Minister Catherine King, you've already had to fund projects here with extra 2 billion due to cost overruns. Do you agree with Jon Davies' analysis of the Queensland element or problem?

CATHERINE KING: Well, I don't, because then I think, if anything, it should be a badge of pride. If the Queensland Government has best practice industrial conditions.

STEVE AUSTIN: That's a play on words, that's a 30 per cent increase over a contract price normally. Up to, sorry, up to -

CATHERINE KING: Well, I think that we want people to be paid decent wages, we want people to have really good awards and conditions. And this is an incredibly important part of our economy. So, I think that Jon's probably picked a fight, I think, in terms of that. What we do know is that of course what we're seeing and you know, it's not just Queensland that is experiencing cost pressures on projects. We've seen, you know, obviously with the cost of fuel we're transporting goods and services around. That has added to cost pressures on projects. Just the cost of concrete alone has been increasing. Some of that, it fluctuates, but it has gone up. That is happening across the country and I think that's great that we've got terrific industrial conditions. I want to make sure that every worker comes home safe. I want to make sure that this is an industry that we attract more people into. I particularly want to see more women in this industry and we do that by providing decent paying conditions for the workers on there.

What it also means, obviously, is that we've got to work really hard to make sure that we are getting the best value we can for taxpayer money, that we are making sure we're being efficient in the delivery. We're dealing with risks, we're trying to make sure we get all the planning done. One of the mistakes of the past has really been, we're good at this as politicians, we sort of announce we're going to fund this particular project. Often we've seen that happen in the past where we don't actually know exactly how much that's going to be going to cost. And what you've seen in one of the projects in particular, which I know how important this is for southeast Queensland, but one of the projects is obviously the rail that's really important for the Olympics. And what we saw with that was basically some politicians, this is the direct Sunshine Coast rail line. We saw previous Liberal Government go out without the state government actually being involved in this, announce funding for a project. We've had to then go both as the Queensland Government and the Commonwealth Government and go, well, actually, how much is this project going to cost?

We're starting to do that work now, but it is very clear that the amount of money that has been allocated that was announced for this project is nowhere near enough to actually deliver and build what was promised. So, it means that we have to do the hard planning work and we have to do that together. And that's certainly what we've committed to do on things like the Sunshine Coast rail line to actually see and get a really good handle on what this costs. Before we start saying this is how much construction money is going to be, is available and actually then starting to do the hard work of delivering it.

STEVE AUSTIN: Has the Queensland Government been making promises they can't afford?

CATHERINE KING: No, not at all. I think that -

STEVE AUSTIN: Even though you had to throw in an extra $2 billion, $2000 million over and above what was already agreed.

CATHERINE KING: They're not the only state we've done that with. You might have note that the South Australian Government had been left unfortunately having to deal with a cost pressure on one of their very large roads and we've had to provide an additional, I think it's 2.3 - not the figure in front of me - billion dollars for a road in South Australia as well. So, across the board, we have kept the $120 billion pipeline. We haven't cut the $120 billion pipeline. We've eased cost pressures by, well, we've cut 50 projects across the country and we've used that money basically to deal with cost pressures. but also to make sure that we've got a deliverable program going ahead.

STEVE AUSTIN: Minister thanks for your time.

CATHERINE KING: It's really good to be with you, Steve.