3AW interview with Neil Mitchell

NEIL MITCHELL:

Federal budget tomorrow, meaning cuts, meaning spending which I think we need. Today the Federal Government is claiming a new 1.1 billion dollars investment in Victoria, in building. It's mostly regional, a lot of it's regional. Barwon Heads Road, Shepparton Rail Upgrade Stage 3, Warrnambool Upgrade Stage 2. On the line is the Minister for Population, Cities and Urban Infrastructure Alan Tudge. Good morning.

ALAN TUDGE:

Good morning, Neil.

NEIL MITCHELL:

Where's the Airport Rail Link?

ALAN TUDGE:

It'll be coming. We've got $5 billion on the table as you know, and it's scheduled to start in 2022. We certainly need this. It should have been built probably two or three decades ago, Neil, but we will get it done starting in 2022.

NEIL MITCHELL:

Just to get it clear. None of this is dependent on the billion dollars that you were debating over the East West Link.

ALAN TUDGE:

No, no. That's another project which obviously we want to get done and we have the full public funds set aside to do this project, but the State Government is resisting to do it unfortunately. It would create another 4,000 jobs immediately if they decided to get under way with it.

NEIL MITCHELL:

But what we're announcing then are not new projects. You've pledged money here before. It's a matter of you're now going to pay a larger slice of what the State Government was putting in, aren't you? Isn't that how it works?

ALAN TUDGE:

These are all new projects that we're announcing today. Now some of them, for example the Shepparton rail upgrade is stage 3 of the rail upgrade but it's still a huge amount of money, $300 million going in. That work will begin next year and be completed a couple of years thereafter. Just making that line, for example, more reliable, safer and more resilient for weather events and the like.

NEIL MITCHELL:

That wasn't funded until today, or tomorrow?

ALAN TUDGE:

Yes, that's correct. This is all new money. We've had money going into that line in the past. This is new additional money going into that rail line. As you said, going to many other regional rail lines. In part, we have focused on the regions today and tomorrow in the budget because they're projects which can get started more quickly whereas sometimes in the city they take a little bit longer to get started. Nevertheless, there still are a bunch of projects, smaller scale ones, that we're also funding in the budget tomorrow as well.

NEIL MITCHELL:

But I was looking at some of them. It seems the State Government contribution has been cut back and your contribution has been increased, is that correct?

ALAN TUDGE:

We've not had any contribution towards these projects to date. These are projects which we've been in discussions with the State Government about over the last, you know, couple of months, myself particularly with Jacinta Allan and with the Deputy Prime Minister. They're the things they wanted to see supported. We have agreed to those so that they can get cracking. The most important thing about all of this is that it will create 4,000 jobs. And we desperately need these jobs.

NEIL MITCHELL:

When?

ALAN TUDGE:

All of them have been decided, all of them have been chosen because they can begin immediately or certainly within about 12 months. Obviously we're funding projects which want to get cracking soon and that's how these have been designed.

NEIL MITCHELL:

Who will choose ‑ who will manage them, State or Federal?

ALAN TUDGE:

So the State Government will manage all of these projects, yes.

NEIL MITCHELL:

Who will choose the contractors?

ALAN TUDGE:

The State Government.

NEIL MITCHELL:

Will it be open to international contractors like the Chinese companies they love using?

ALAN TUDGE:

Those decisions will be made by the State Government, but as you know we're introducing a foreign relations bill, which once passed, which we expect later this year, will mean that no agreement, which is contrary to Australia’s foreign policy, will be able to go ahead.

NEIL MITCHELL:

But how will it be contrary to Australian's foreign policy to say, "We're going to employ a Chinese construction company to do the Barwon Heads Road upgrade", that wouldn't fall under that category, surely?

ALAN TUDGE:

Each individual case would need to be assessed against the Act, and it depends on the nature of the particular company. Now, ideally ‑ not ideally, I certainly would like to see an Australian company do that work employing Australian people on the ground. I mean we've got great Australian construction companies.

NEIL MITCHELL:

But there's no strings attached. I mean if the State Government, which is in love with China, if the State Government wants to bring in international companies to do it, they can, correct, and you still provide the money?

ALAN TUDGE:

Well there's international companies who are based here already, ACCIONA for example, a Spanish company.

NEIL MITCHELL:

John Holland, yes.

ALAN TUDGE:

John Holland, et cetera. So they do some of the big work already. We provide the money; the State does make the selection. But I do put this rider on, because this has been really important for the Federal Government, is that State Governments once this foreign relations bill has been passed will not be able to enter agreements which undermine our foreign relations, undermine our national interest in foreign policy.

NEIL MITCHELL:

Yeah, but I'm worried about two things. One, where the profits go. But second, it's been argued with some of the Chinese projects in particular it's sent jobs offshore. Can you be sure that every dollar of this will be spent employing and getting work for Australians?

ALAN TUDGE:

I can assure that every dollar that is spent will be going to people in Australia, absolutely. All of these projects, I mean the nature of construction projects is that they have to be done here on the ground. Whereas of course if you're buying a new TV or something that manufacturing can occur somewhere else.

NEIL MITCHELL:

Okay. Is this dependent on ‑ as much of the budget is really ‑ is this dependent on the discovery of a vaccine?

ALAN TUDGE:

No, it's not. These will go ahead regardless and, you know, one of the good things that has occurred across the country, and this has been different actually compared to somewhere like New Zealand, is that the entire construction sector has managed to be maintained throughout the pandemic, even here in Victoria, which has obviously had the most severe restrictions anywhere in the country. These projects will still go ahead. We're providing the bulk of the money for them and we want to get those jobs under way.

NEIL MITCHELL:

I understand you're providing the bulk of the money but on what I read the budget is predicated on a vaccine being established and obviously if that doesn't come in then the bottom lines not as healthy, does this money come through in the same time?

ALAN TUDGE:

Well the money will absolutely come through at the same time.

NEIL MITCHELL:

What's that? How long before it's actually on the table and we're digging holes?

ALAN TUDGE:

Well the money will be there as of budget night and as soon as construction is underway that's when our money flows. The Federal money always flows according to the construction schedule. We don't give it upfront and say, "Good luck with it". We always hold it back. When you reach the milestones, we hand over the money.

NEIL MITCHELL:

Nothing for the North East Link or the Metro Tunnel, Suburban Rail Loop. Why?

ALAN TUDGE:

North East Link we've already got from the Federal perspective $1.7 billion committed for that and the State Government and private contributions are funding the rest. That's ready to go. That's 10,000 jobs and the early works are under way.

NEIL MITCHELL:

Yes.

ALAN TUDGE:

Massive project.

NEIL MITCHELL:

Suburban Rail Loop, no?

ALAN TUDGE:

Suburban Loop, we had offered money in the past and it was rejected by the State Government, so from memory we had offered a billion dollars. But we've got money in so many other projects here in Victoria, as we do around the country, and infrastructure is so desperate right now because it creates local jobs and that's what this entire budget is going to be about.

NEIL MITCHELL:

How much of this is going to be spent on business cases and studies as distinct from digging holes?

ALAN TUDGE:

In most of these projects have already had the work undertaken to do the preparatory work, if you like.  There are one or two projects, which are specifically funding for business cases, for example, further work on the electrification of the Wyndham Vale and Melton lines, which obviously become important, and they'll be multi‑billion dollar projects in the end. We want to get that early work underway.

NEIL MITCHELL:

Thanks for your time. Who was right at the weekend then, Josh Frydenberg or Daniel Andrews, who won the war of words? Who was right?

ALAN TUDGE:

I'll always back my Treasurer.

NEIL MITCHELL:

Okay, thank you very much Minister for Population, Cities and Urban Infrastructure Alan Tudge.

Well, there's a lot of projects, there's a lot of money and they'll all blow out, of course. Let's hope it's spent in the right place.