Ministers for the Department of Infrastructure, Regional Development and Cities The Hon Michael McCormack MP Deputy Prime MinisterMinister for Infrastructure, Transport and Regional Development Senator the Hon Bridget McKenzie Minister for Regional ServicesMinister for SportMinister for Local Government and Decentralisation The Hon Alan Tudge MP Minister for Cities, Urban Infrastructure and Population The Hon Sussan Ley MP Assistant Minister for Regional Development and Territories The Hon Andrew Broad MP Former Assistant Minister to the Deputy Prime Minister The Hon Scott Buchholz MP Assistant Minister for Roads and Transport The Hon Barnaby Joyce MPFormer Deputy Prime MinisterFormer Minister for Infrastructure and Transport The Hon Dr John McVeigh MPFormer Minister for Regional Development, Territories and Local Government The Hon Keith Pitt MPFormer Assistant Minister to the Deputy Prime Minister The Hon Damian Drum MPFormer Assistant Minister to the Deputy Prime Minister Senator the Hon Fiona Nash Former Minister for Regional DevelopmentFormer Minister for Local Government and Territories The Hon Darren Chester MP Former Minister for Infrastructure and TransportFormer A/g Minister for Regional DevelopmentFormer A/g Minister for Local Government and Territories The Hon Warren Truss MP Former Deputy Prime Minister Former Minister for Infrastructure and Regional Development The Hon Paul Fletcher MP Former Minister for Urban Infrastructure and Cities The Hon Jamie Briggs MP Former Assistant Minister for Infrastructure and Regional Development

Sky News live to the Point with Peter Van Onselen and Kristina Keneally



08 March 2017

Topics: Western Sydney City Deal; Perth Freight Link

Kristina Keneally: Minister, thank you for joining us.

Peter Van Onselen:Thanks for your company.

Paul Fletcher: Very pleased to be with you.

Kristina Keneally: I’m really pleased you’re with us in person today, in particular. Billions of dollars you’re apparently going to spend, according to your colleague Angus Taylor, in a Western Sydney City Deal. How are you going to afford that?

Paul Fletcher: Well look, a couple of points. Obviously we announced some time ago the intention of first of all having a city deal framework in a number of parts of the country – so Townsville, Launceston and also Western Sydney – and the idea with a city deal is that you’ve got the Federal Government coming together with state government and also local governments to agree a set of outcomes, the things that the different levels of government are going to do.

Now, as the Prime Minister has made the point, and as Angus Taylor as Assistant Minister for Cities has made the point, a city deal allows us to take, for example, our very significant spending commitments on transport infrastructure, and fit that into a broader context and some of the policy objectives we want to achieve. So, for example, in Western Sydney of course we’re committed to Western Sydney Airport – we took that decision in 2014; a number of key milestones late last year. We’re now waiting to find out whether Sydney Airport Corporation Limited will accept what’s called the notice of intention and build and operate the airport, or whether the Government will, but that’s one example of, for example, the sort of expenditure that might be committed. Again, I make the point, Sydney Airport Corporation has a right of first refusal; if they choose to build it, they will.

Kristina Keneally: Can I just stop you, because this City Deal, as it’s been reported, it seems to be promising a whole range of things: It’s going to improve housing affordability, going to improve peoples’ travel times from Western Sydney to the CBD, it’s going to locate jobs in Western Sydney, it’s going to build new infrastructure and it’s going to be billions of dollars. Can you tell us today specifically what this deal will do?

Paul Fletcher: Well, the details of the City Deal will be announced later in the year. Late last year, Prime Minister Turnbull and then-Premier Baird signed a memorandum of understanding in relation to a Western Sydney City Deal. But again, the point is this: with substantial Commonwealth expenditure in a whole range of areas – not just transport infrastructure – this gives us the opportunity to put that into a context, where specific policy outcomes are agreed across different levels of government, and the levels of government can then work together to achieve those outcomes. So, for example, our transport infrastructure spend this year around Australia from a Commonwealth level is around $9 billion.

So this is a lot of money being spent in different parts of the country, and it does make sense to align that to broader policy goals, for example in relation to housing affordability. So if you’re talking about building rail, it makes sense to look to have apartment buildings around railway stations, to have shopping centres there to maximise the number of people who can then use rail to get to employment. Of course, one of the things we’ve stated repeatedly as a serious objective, a very key objective for Western Sydney Airport, is not just that it becomes an important facility for transport, but that it becomes the hub of economic activity. Airports are proven job generators; they have a proven capacity to attract businesses and facilities of many kinds: tourism and accommodation, convention and conference, just-in-time logistics, just-in-time manufacturing, higher education. These are the kinds of businesses and enterprises that are attracted to locate near airports. So we’re working very much with the New South Wales Government on how we can leverage Western Sydney Airport to get those employment outcomes, and the City Deal is a really important framework through which to do that.

Peter Van Onselen: What about looking over to WA with the state election coming up? Mark McGowan is talking about redirecting funds, Federal Government money that would go into infrastructure projects that the State Liberal Government are talking about, but they want to scrap and move elsewhere. Should he count on those funds?

Paul Fletcher: Well let’s be clear. There’s almost 1.2 billion of Commonwealth money committed to a project called Perth Freight Link, which will be a very significant extension of the existing Perth motorway network …

Peter Van Onselen:  Can I just ask a question on that quickly? Labor likes to point out that it’s going to stop three kilometres short of where it’s meant to get to and there are no plans for it to go the extra three kilometres, it just charges through residential housing and the rest of it. What’s the answer to that?

Paul Fletcher: Let’s be completely clear. At the moment it’s a 15 kilometre journey from the nearest point on the freeway interchange to the Port of Fremantle, that’ll reduce it to three kilometres. That last three kilometres is principally along the highway. I’ve been to see the sight myself; there’s no doubt that Perth Freight Link will transform access to Fremantle Port. So it’ll give trucks a much quicker and more convenient route from the port back into the Perth motorway network, to the city, points north through the city.

Peter Van Onselen: But Labor’s argument is that you’re still just having this three kilometre bottleneck, so it’s a freeway to nowhere; you’ll be better off to look at other ways of transporting like, for example, through the rail network.

Paul Fletcher: No, well that is completely wrong. What it does is it gives trucks motorway access to a point within three kilometres of the port, and you’re on significant roads from that point into the port. At the moment, these trucks are travelling through suburban areas, surface roads, so it’ll be a combination of the freeway and a tunnel. It’s also going to improve connectivity for cars, of course. It’s going to take a lot of heavy trucks and traffic off of suburban streets.

Kristina Keneally: It’s useful infrastructure, but it’s not really a link directly to the port.

Paul Fletcher: It’s very much a link to the port. It means …

Kristina Keneally: But it doesn’t link directly to the port. I understand the point you’re making. I used to represent the electorate that has Port Botany; I get what you’re saying. But 12 kilometres is going to make a massive improvement.

Paul Fletcher: It’ll make a massive difference.

Peter Van Onselen: Is there a plan to do something about the last three? Can anything be done about the last three?

Paul Fletcher: What has happened over a number of years is successive stages of motorways have been built in Perth. At some point in the future, certainly, it’s very likely that you would address that remaining gap, but the point is it’s a very, very significant benefit that you would now have a continuing motorway running from where the motorway stops at the moment, to within three kilometres of the port.

Peter Van Onselen: And what about Labor’s point, though, that- okay, I get that that’s the project you want, but they don’t, so if they win the election – they’re ahead in the polls – they’re going to scrap it. Can they count on federal money going somewhere else? Mark McGowan says it’d be a very brave Federal Liberal Government to turn around and just rip more than $1 billion of infrastructure spend out of alternative ideas for the west. Someone like Christian Porter on 3.6 per cent probably wouldn’t be too happy if more than $1 billion got ripped out of infrastructure.

Paul Fletcher: Look, can I make a couple of points. As the Prime Minister has said, as the Finance Minister and Western Australian Senator Mathias Cormann has said, the commitment that we’ve made to Perth Freight Link is specific to that project after it’s been through an assessment by Infrastructure Australia. This is a high-priority project, as designated by Infrastructure Australia – there’s only seven projects on that list around the country – it’s been through a thorough planning process, delivers substantial economic benefits, lifestyle benefits, safety benefits. This is a very desirable project.

Peter Van Onselen: I get all of that, but it’s not going to go ahead if Labor wins and Labor, let’s face it, are going to win. It’s going to be a real turn up- it’ll be one of the biggest upsets in Australian political history if they didn’t win, based on where the polling is at this close to polling day. So they’re not going to go ahead with it, so does that mean that they can’t bank on those funds going somewhere else?

Paul Fletcher: Well again, I repeat the point that the Prime Minister has made, that Mathias Cormann has made: the money the Commonwealth has allocated is for a particular project, following a particular process. Can I make one other point about Labor’s so-called Metronet. The first stage of Metronet is the Perth to Forrestfield and Airport Rail Link, which is already proceeding. The Barnett Government is doing that now. There’s $490 million of Commonwealth money in it. That has been through all of the approval processes. We do have these approval processes in place for a reason, so that we are properly assessing projects, assessing their economic benefit, rather than just cobbling things together and making announcements in a political process. We need to go through a proper public policy process. That’s what has happened in relation to Perth Freight Link, and the economic and social and safety benefits of it will be very significant.

Kristina Keneally: On that subject of state governments rejecting infrastructure funding for projects they don’t want to do, and back to your Western Sydney deal, in 2011 when Barry O’Farrell was elected here in New South Wales he said thanks but no thanks to the Commonwealth’s commitment of $2 billion for the Parramatta to Epping Rail Link. Now, if he had accepted that money that would be built right now, you would have a rail link between Parramatta and Epping. Is that the type of project you’re going to look at in your Western Sydney City Deal?

Paul Fletcher: Well, certainly at the core of the Western Sydney City Deal is the Western Sydney Airport. In relation to ground transport connectivity, there’s a $3.6 billion Western Sydney Infrastructure Plan: the M12 will connect from the airport to the M7; the Northern Road will be upgraded to four lanes all the way, so very good ground transport connectivity. Separately, in relation to rail, there’s a joint scoping study being carried out for the two governments – New South Wales and the Commonwealth – that’ll report by around the middle of this year.

Kristina Keneally: I mean, the Parramatta to Epping, though, has been studied to death for years. The Liberal Mayor of Parramatta at the time really wanted it, came out and endorsed it. I mean, this is the type of thing that is exactly to your point. This is a project that’s been through all kinds of assessment and processing and recommended to get people to move from jobs to homes in Western Sydney. Surely it’s got to be on the list?

Paul Fletcher: Kristina, I’m just smiling because of the number of times that the state Labor government announced and then cancelled rail projects.

Kristina Keneally: I know. Sure, and Barry O'Farrell cancelled this one because it wasn’t in his election platform.

Paul Fletcher: It wasn’t- well, can I make the point, the O’Farrell, Baird, and Berejiklian governments are delivering transformative rail and transformative infrastructure all around Sydney.

Kristina Keneally: Alright.

Paul Fletcher: The Northwest- the Sydney Metro Northwest which will run from Cudgegong Road in Rouse Hill down to Chatswood, the Sydney Metro. The city …

Kristina Keneally: And you’ve got to change at Chatswood, don’t you? It’s not a straight line into the city. That’s what was promised.

Paul Fletcher: Then the Sydney Metro Southwest is the next stage of that which will be opened- scheduled to be opened by 2024. So, that will be a line going down to North Sydney, a new tunnel under the Harbour; Barangaroo, Martin Place, and then into the Bankstown Line. So, all of that is planned, in place, work substantially underway. I saw progress- I had a site visit just recently on Sydney Metro Northwest, extremely impressive.

Peter Van Onselen: Just, I mean, as loathe as I am to weigh into New South Wales-centric debate going on between two people that know a lot more about it than I do, what’s this I hear about the idea of there being some sort of freeway connection on the Northern Suburbs that has long been talked about but never happened that would alleviate congestion across The Spit as well as that track of Mosman? Is that actually happening?

Kristina Keneally: But wait a minute, it announced around … or mooted around the time there was going to be a by-election.

Peter Van Onselen: Is it actually happening though?

Paul Fletcher: Well, I think the starting point here is that WestConnex, which is a very substantial $16.8 billion motorway project, has built within it the capacity for future expansion. So, the Rozelle Interchange will have tunnel stubs, what are called tunnel stubs. That’s connections for a future under the harbour tunnel. There are some tunnel stubs in other parts of the plans as well.

Peter Van Onselen: Is it going to happen, the one that’s being talked about that will relieve congestion on Military Road?

Kristina Keneally: Not once those residents up there work out how many more people could pour into their suburbs.

Paul Fletcher: I guess I’d make two points. The specific decision on that would be for the New South Wales Government but in terms of WestConnex, which is supported by Commonwealth funding as well as state government funding, that’s really being designed as the centrepiece that brings together a number of existing aspects of the Sydney motorway network and will allow other components to be added in efficiently at a later stage.

Peter Van Onselen: I want to ask a broader question now. If paying back debt is so important, why are so many billions of dollars getting pumped into infrastructure that could go into debt reduction? And if the argument is that infrastructure is important, why wasn’t it important enough to get pumped into during the Howard years when you had massive surplus?

Paul Fletcher: Well, the Turnbull Government is delivering on a $50 billion infrastructure program. Between 2013-14 and 2019-20, our infrastructure spending will reach $50 billion, and that’s a whole range of projects around the country. All of that is factored into, of course, our plans to bring the budget closer towards balance over a number of years.

Peter Van Onselen: But are you factoring in the fact that this notion of bringing the budget closer to balance over a number of years has missed the mark repeatedly over the number of years before it? So, if it’s missed the mark that many times in a row, it’s likely to do it again and if it’s going to do it again, then you’re not going to get to the surplus that you’re projecting by the time- despite spending billions of dollars in infrastructure.

Paul Fletcher: My point is, you are seeing the discipline from us on budget improvements, some $22 billion of budget saves since the election have now been achieved. This is ongoing hard work that as part of that also, we’ve factored in very substantial infrastructure spend, funding for WestConnex, for NorthConnex, Toowoomba Second Range Crossing, Northern Connector in Adelaide, Perth Freight Link, Tullamarine Freeway, Midland Highway in Tasmania, Sydney Metro Southwest Rail Project, Inland Rail.

Peter Van Onselen: When there was cash in the bank, could the Howard Government have done more on infrastructure?

Paul Fletcher: Well, I’m not here to provide a commentary, a historical commentary on the Howard Government. There are plenty of people who can do that.

Kristina Keneally: People might’ve written whole books about it. Can I ask you, though, didn’t the Department of Regional Development and Infrastructure say that it’s 38 billion over the first five years you’re in government and then some 8 billion onwards beyond that?

Paul Fletcher: No, the Opposition spokesman took a particular answer from the Department of Infrastructure out of context and just ignored two years. He chose to ignore the 2013-14 year and the 2019-20 year. Our commitment’s very clear: 50 billion from 2013-14 through to 2019-29 on infrastructure spend, spending at record levels. This year it’ll be about $9 billion and there’s a whole range of infrastructure projects around the country.

Kristina Keneally: Is there any risk any of that’s going to get pushed out beyond forward estimates as a way to make the forward estimates look better in this budget?

Paul Fletcher: Look, there is always a process. We’re planning over a number of years and, of course, you need to deal with the circumstances as they arise. But beyond that you’ll have to wait and see what’s in the budget.

Peter Van Onselen: Do you take the view that we need a better more nuanced debate about good versus bad debt in this country? Professor Richard Holden, the economist from UNSW, has talked a lot about this, that the way that – and you come from a senior business background so you’d understand this as well as anyone – businesses have a very different way of budgeting and describing their good versus their bad debt. Government lump it all in together, recurrent expenditure and infrastructure spending which can bear productivity-enhancing fruit. Do we need to have a more nuanced debate about this?

Paul Fletcher: Look, I’ll leave the definitional and technical issues there to the Treasurer and the Finance Minister, but the point I would make is this that we are obviously running a deficit at the moment, the deficit’s getting steadily smaller, but we are running a deficit. Part of that is because- or part of that is going to find very substantial infrastructure projects which deliver material productivity benefits as well as safety and lifestyle benefits. I mean, let me give you the example of the Pacific Highway: 5.6 billion between now and 2019-20 to have a four-lane highway all the way from Sydney to the Queensland border. When that’s completed, the total time saving compared to the starting point is two-and-a-half hours in each direction. Multiply that- I mean, that’s five hours on a return trip. Multiply that by all the trucks going up and down the Pacific Highway, that is a material productivity gain.

Kristina Keneally: Can I ask you on another subject, One Nation Senator Pauline Hanson says she can’t distinguish in a line up between good Muslims and bad Muslims.

Peter Van Onselen: It’s hard to.

Kristina Keneally: It’s hard, it’s hard. Well, she said, she can’t point …

Peter Van Onselen: I find that with the Dutch.

Kristina Keneally: I do find that with the Dutch, I find that every day. But anyway, your thoughts on those types of comments.

Peter Van Onselen: Are they sophisticated?

Paul Fletcher: Look, my view is that the people in the Muslim community in Australia make a very good contribution, there are hardworking, motivated citizens like everybody else.

Peter Van Onselen: Do you agree with her when she says it’s hard in a line up to tell the difference between the good Muslims and the bad Muslims when you line them up?

Paul Fletcher: Look that’s not an observation that I would make.

Kristina Keneally: So, do you take on board Duncan Lewis’ comments, the head of ASIO’s comments that 99.9 per cent of Muslims in Australia are of no concern to security agencies?

Paul Fletcher: Well, that is the advice that the Government is receiving from security agencies. Perhaps I can refer you to Peter Dutton’s comments in the House of Representatives the other day. He made the point that- I think he used the figure 99 per cent of Australian Muslims are law-abiding citizens making a good constructive contribution. Look, we are one of the most successful multicultural nations in the world.

Peter Van Onselen: How much longer, though? This is my point, and in fairness I … both David Speers and I gave Peter Dutton player of the day for the way that he handled that question. Ed Husic on NewsDay with me made the point, he made public the point that he phoned Peter Dutton on the way that he handled that question that he received from Bob Katter. But my question about- in response to you saying about us being a successful multicultural country, which I don’t disagree with, is for how much longer? With some of the commentary from politicians and elsewhere that seems to be, if not condoning, implicitly condoning what’s happening, it’s getting to an uncomfortable point.

Paul Fletcher: I have a high confidence in our successful multicultural society and economy. Because let’s not forget what a powerful economic asset it is to have the diversity that we have. The experience that strikes me as a Member of Parliament is going into schools into my electorate, and my electorate is a very multicultural electorate, it’s an affluent electorate but it’s affluent electorates as well as less affluent that are very multicultural, that’s modern Australia. My electorate’s 9 per cent Chinese, 4 per cent Korean, 4 per cent Indian. Children in schools today just expect to be learning with children from all around the world. That diversity is part of the experience of growing up in Australia today and that is a great strength for our capacity to operate across multiple cultures, for our capacity to operate in modern Asia, the diversity of language skills and backgrounds that it gives, so this is a great economic strength. It’s also a great cultural strength and so I am very confident that we are going to maintain and build on that strength and that’s because of the way that Australians are conducting themselves.

Kristina Keneally: Alright, Minister Paul Fletcher, thanks for joining us on To The Point.

Paul Fletcher: Thank you.

Peter Van Onselen: Thanks for your company.