Transcript - 3AW interview with Neil Mitchell

NEIL MITCHELL:

As I said, there's a Small Projects Fund. On the line is the federal Minister for Population, which is where immigration comes in, Cities and Urban Infrastructure, Alan Tudge. Good morning.

ALAN TUDGE:

G'day, Neil.

NEIL MITCHELL:

Hey, just first on the matter of infrastructure, are you comfortable with the Andrews Government dealing, Daniel Andrews' Government dealing with China to get money to build infrastructure?

ALAN TUDGE:

I will leave it to them in terms of where they access their money. We've certainly got concerns in terms of them signing up to the Belt and Road Initiative. That is something that we didn't support at the federal level. They have to answer that question as to why they did, why they're the only State that do it.

From the federal perspective, when we access the markets for debt, which we obviously have to do now, because we're back into deficit, we go onto the broader international markets. Now that will come from all over the place but some of it will probably come from China as well.

NEIL MITCHELL:

Some of the federal money?

ALAN TUDGE:

Some of the federal money but you go to the international markets, we don't go to China and ask specifically for money from China, we go to the international bond market. The recent bond offering, by the way, which the Federal Government put out, was mainly subscribed by Australian banks who provided the money as opposed to even internationally.

NEIL MITCHELL:

Okay. Now, the Small Projects Fund, how much will the average council get?

ALAN TUDGE:

So the average council gets almost about $3 million extra between that $500 million of new money, plus the bring forwards of another $1.3 million from out years into this upcoming financial year.

NEIL MITCHELL:

Sorry, I don't understand. They are going to get $3 million each?

ALAN TUDGE:

About a $3 million boost that they're going to get on average.

NEIL MITCHELL:

How do you make sure they just don't spend it on more mayoral lunches or cars or fat cat chief executives who are already overpaid? How do you make sure how they spend it?

ALAN TUDGE:

They have to put forward the series of projects that they want to spend their money on. Now, we already have a formula for doing this called the Roads to Recovery money, where they get about $1 million each year from us already, and how that works is that they will put up their projects and as long as those projects fit within the criteria, they go ahead with them. So we don't select the projects as such, but we ensure that they are consistent with the guidelines.

So this will almost be a quadrupling of the money which they will get from the Federal Government next financial year. So a big boost for them and we want to see those projects get under way as quickly as possible to provide what will be thousands of extra jobs and local stimulus at every single local town across Victoria.

NEIL MITCHELL:

What sort of thing would you hope it to be spent on? Is it roads? Is it parks? What is it?

ALAN TUDGE:

A combination of things. So typically we give them money for roads. In this instance, we're broadening the criteria so it can be local roads that need to be fixed but also if they've got local community infrastructure which has been on the drawing board for a while but hadn't got the money for it.  So this is an opportunity for that.

NEIL MITCHELL:

What, the local footy ground?

ALAN TUDGE:

Or it could be community infrastructure such as that. 

NEIL MITCHELL:

And improving the grandstand or something?

ALAN TUDGE:

Yes, absolutely.

NEIL MITCHELL:

Okay, roads, footy grounds, infrastructure, it can't be used in just day-to-day stuff like collecting the rubbish?

ALAN TUDGE:

No, it can't be used for operational expenses. It has to be for capital infrastructure and it has to be for projects which they otherwise wouldn't be doing. And so this is bringing forward and adding to the amount of activity which is going on. That's the whole idea of it, Neil, is to create more economic activity, more jobs in every single location across the country.

NEIL MITCHELL:

Okay. Can you be sure, though? I mean there's a habit in public service, "Oh, gee, we're coming to the end of the financial year.  Let's go and spend this money quickly because if we don't spend it we lose it." Can you be sure it will actually go on worthwhile projects?

ALAN TUDGE:

Generally, yes, because we do have the guidelines and we already have a mechanism to do this. We take a look at what they put up. We don't determine what their projects are, but as long as they fit within those guidelines and there's some surety around that, then we kick off on it and they get going and we do want to see them get cracking immediately though, because the job requirements are now and that's what this whole thing is about. 

NEIL MITCHELL:

Who overseas it? I'm not a great fan of local government and their waste, in fact I think we can do without them, but who oversees it? Who makes sure they're actually spending where it has to be spent?

ALAN TUDGE:

It's a combination of two things, at the local council level they have their own integrity measures to ensure that if they are signing a contract with the Federal Government that they're abiding by that. But equally, they will have to illustrate to the Federal Government departments as well precisely where they are going to spend their money and enter into a contract and have to abide by that contract. 

NEIL MITCHELL:

Any estimate how many jobs?

ALAN TUDGE:

No, it will be thousands of jobs but I don't have a precise estimate.

NEIL MITCHELL:

And how much money?

ALAN TUDGE:

So it's $500 million of new money of which about $100 million will go to Victoria and then on top of that $1.3 billion of money which was in the out years if you like which we're bringing forward.

NEIL MITCHELL:

Okay, but $500 million new money. A listener wants to know if the Federal Government's likely to get money from China, we don't sign any Belt and Road deals, do we? Federally?

ALAN TUDGE:

No, we wouldn't do that and we've been critical of Victoria signing up to that initiative.

NEIL MITCHELL:

Why?

ALAN TUDGE:

Well, it's an initiative which is a foreign policy tool for the Chinese Government, for the Communist Party, and it's not something that we have believed that Australia should sign up to.

NEIL MITCHELL:

Is it an attempt to buy influence in a State or I know some of the poorer countries are effectively taking them over.

ALAN TUDGE:

I mean it is a foreign policy tool of the Chinese Communist Party Government, of course, to have some influence.

NEIL MITCHELL:

So they're buying influence with it.

ALAN TUDGE:

It's a question for the Victorian Government as to why they signed up and other States have not signed up and the promise, of course, which has been documented in the newspapers, was that this was going to lead to better trade relationships.  But that hasn't been the case and we've seen this already.

NEIL MITCHELL:

That's right. Okay, do you think they've been spouting Chinese propaganda as was alleged when Tim Pallas said it was the Federal Government fault that there was a tariff on barley?

ALAN TUDGE:

Well, I mean I was pretty disappointed in those comments of Tim Pallas because we've taken the strong position in Australia's interests and that position is not an unremarkable position to say that there should be an international inquiry into what occurred with this virus. Given the massive global devastation which the virus has caused, surely there should be an international inquiry into it.

Now, the World Health Organization has now agreed to that, which is good. But we're always going to stand up for Australia's interests and Australia's values. And to suggest that our standing up for Australia's interests and Australia's values is somehow -

NEIL MITCHELL:

I notice that China, through the Global Times, are saying it doesn't actually look at the origins of the virus but that's something else that's to be pursued elsewhere.  And the other question is, well, if some of our borrowing will come from China, how much? What percentage?

ALAN TUDGE:

I don't know the answer to that question. I just don't know the answer to that question, Neil.

NEIL MITCHELL:

Okay. Other thing, immigration. As you'd be aware, the Property Council wants a campaign to increase migration, to bring more migrants here post-pandemic. What's the right way to go post-pandemic, as it eases? Do we increase migration or decrease migration?

ALAN TUDGE:

Inevitably, it will be lower for some time to come. Now, migration levels, in terms of net overseas migration, was tracking at, say, about 230,000 per annum. It is now almost zero because we have shut the borders and that was one of, if not, the most important thing we did to control the pandemic. Next financial year we're forecasting that migration will be 85% down on what was previously forecast. 

NEIL MITCHELL:

For health reasons or economic reasons?

ALAN TUDGE:

No, largely for health reasons because our borders will still be closed and, you know, you think through where the various categories of migrants come into the visa classes. You just can't imagine having those sort of numbers coming into Australia when we're coming from a zero position. At the moment, we know that many of our source countries still have great difficulties in terms of the virus going through their countries, you know, think about India, for example, and so it will be still some time to come before we have open and free borders. In fact, it may be that we need to have a global vaccine before we have open, free borders. 

NEIL MITCHELL:

What, a global vaccine before we can return to full migration?

ALAN TUDGE:

Before we can return to full free borders because, you know, when you think about it as well, most of our border crossings, Neil, are actually from international tourists. We might say, have about 10 million border crossings from international tourists each year. Now, that is a very difficult thing to do at the moment.

NEIL MITCHELL:

I understand that, but I'm looking at the migration thing. Effectively, there's no migration until we get a vaccine, is that right?

ALAN TUDGE:

Well, there will be some limited migration. So we already have, you know, a tiny bit of migration on an exemption basis whereby if somebody honestly believes that there are very compelling reasons to be in Australia they can apply for an exemption. Next year, we've already foreshadowed that we're examining some things such as can we progressively introduce international tourists, for example? Can we have what we're calling a bubble arrangement with a country like New Zealand or a Pacific Island which are very safe countries from a COVID perspective as well, and have effectively free travel between those two countries?

NEIL MITCHELL:

But once we get through when they get a vaccine and open up the borders, do we then have a surge in the number of people being brought here to live, migrants, not tourists, migrants coming to live here? Do we for reasons of economy, as the Property Council says, do we need a surge in migration or do we set more carefully than that?

ALAN TUDGE:

I think it's very difficult to predict, Neil, because it's still going to be some time away. I mean that presupposes that we do have a vaccine which is globally available because the migration system is quite complex and most people do come here on a short-term visa to start with before they might then apply for a permanent residency visa. So you've really got to look at each of those classes of short-term visas and what's likely there. 

Now international students have been a great source of both income and people for Australia, that's something that we could potentially get going and build up over time. You look at some of the skilled migration, now that will inevitably be down in any case because most of that is sponsored skilled migration, you can only sponsor if you can't find an Aussie. Now there will be a lot more Aussies available over the next year or two so I imagine that will be down as well. 

NEIL MITCHELL:

Thank you for your time. 

ALAN TUDGE:

Thanks very much, Neil.