Mr LLOYD (Minister for Local Government, Territories and Roads) (6:35 PM) —I take this opportunity to thank all honourable members for their contribution to this debate. Today is a very significant day in this parliament, where we will see the passing of the AusLink (National Land Transport) Bill 2004 and the AusLink (National Land Transport—Consequential and Transitional Provisions) Bill 2004 through this House.

These bills represent major reform legislation. They herald the most important change to national land transport policy in the past 30 years. The AusLink program has a generational commitment to transport infrastructure improvement. It will help deliver on the government's vision for a land transport system that can both meet the challenges of the transport task and make its contribution to a stronger economy. Since coming to office, the Australian government has already taken major steps towards positioning Australia to sustain long-term economic growth. It has significantly reduced public debt by some $70 billion and fundamentally restructured the tax system. High performing land transport infrastructure is a further prerequisite to ongoing improvements in our national productivity and competitiveness as our population ages over the next 20 to 30 years.

The AusLink initiative introduces a new, modern and innovative approach to land transport infrastructure planning, decision making and funding. It backs these reforms with a massive increase in funding which our sound economic stewardship has enabled us to provide. The overwhelming bulk of the AusLink investment—over $8 billion over the next five years—will be directed to the new land transport network. The new AusLink national network brings together for the very first time previously separated planned and funded road and rail networks into a single, integrated network which will be an essential foundation for a fully effective national transport system.

The government is providing the platform for the revitalisation of the national rail network. Without an effective interstate rail freight system, Australia's transport system cannot work. For the first time, the Australian government's transport infrastructure funding will be guided and underpinned by an announced five-year national plan. The five-year plan focuses on the highest priority projects that provide economic and social benefits from a national perspective. Importantly, we are also providing a five-year funding commitment which gives certainty to state and local governments, and to transport and construction industries. This is unprecedented and provides for certainty of investment.

AusLink provides the framework for a planned national system whereby all levels of government will be working to deliver the best transport investment. The Australian government has set out a clear strategic direction which governs the priorities it has established for the next five years. In brief, these priorities are: establishing long-term and integrated planning; improving the eastern seaboard's north-south corridors; improving interstate and interregional corridors; addressing urban congestion on key freight links; utilising technology where it can enhance and improve efficiency, safety and security on the national network; improving safety and security overall; protecting the Australian government's past investment in major links; and supporting regional and local economic growth. At the project level, the program provides for substantial investment in Australia's most important land transport links, including the F3 and Pacific Highway, the Hume Highway, the Sydney to Brisbane and Sydney to Melbourne interstate railways, and the Bruce and Calder highways.

The program enables many critical projects to be undertaken—the Geelong bypass, the Peel deviation in Western Australia, the Port River expressway in South Australia and the Bridgewater Bridge in Tasmania are just a few examples. It is absurd to suggest that investment in such projects will not yield major economic benefits at both the national and local level. This will be the first time that a national government will be putting in place arrangements that look beyond the current five-year program through a development of long-term corridor strategies developed against a 20-year time horizon. Corridor strategies will provide the basis for identifying shared government priorities and provide non-government stakeholders with the opportunity to contribute to the longer term planning and funding of national land transport infrastructure in Australia.

Corridor strategies will be supported by a range of rigorous studies to determine corridor needs, deficiencies and future priorities. They will focus on identifying the best solution to the transport needs of each corridor, irrespective of the transport mode. Industry and stakeholder consultation will be a critical source of information. Work on developing corridor strategies in conjunction with the state and territory governments will commence in earnest this year. Initially we will focus on a small number of pilot studies and expand into larger groups as we gain experience.

There will be a nationally consistent project assessment methodology to inform the development of corridor strategies and the assessment of future project priorities. This methodology has been developed in conjunction with the states, territories and local government and has now also been agreed to by Australian Transport Council ministers. This is a key reform. The government has set up the framework for evidence based national investment. AusLink is about ensuring the nation invests in its best projects.

The opposition has made a number of proposals in its second reading amendment. The first relates to the discontinuation of the national highway system. The opposition amendment is critical of the discontinuation of the 30-year-old national highway system funding arrangement. The bill provides for the government to move beyond the single mode-focused national highway system to a broader and integrated network of nationally important road and rail links. A number of opposition members made comments during the debate which were also supportive of moving on from the old national highway system to a concept of a single, integrated network.

Under the announced AusLink program, all states and the Northern Territory will receive large increases in funding for construction projects on the national network. It is therefore quite ridiculous to suggest that the Australian government is somehow avoiding its funding responsibilities. The AusLink shared funding arrangements recognise that many projects on the national network as well as having substantial national benefits will also have benefits that are more local in nature. In these cases, funding contributions at both the national and state level are appropriate. The AusLink shared funding arrangements also recognise that the national network now includes links that previously had been totally or partly the responsibility of the states to fund—links that the Australian government previously had no responsibility for. At the same time, the Australian government is continuing to fully fund many projects on the former national highway system, particular those in rural and remote areas. The opposition's position is now an outdated approach to transport funding and, accordingly, the government does not support it.

The second part of the opposition amendment proposes the establishment of an independent national infrastructure advisory council. Whilst the government's AusLink white paper lays considerable stress on the importance of long-term planning for national land transport infrastructure, it cannot support the opposition's approach. Labor's proposal, which is lacking in any firm detail, is to set up another bureaucratic talkfest that will not provide effective advice on national priorities. Our view is that such advice is unnecessary at this stage, given that the national land transport network is premised on infrastructure investment priorities identified by the state governments. An example is the Pacific and Hume highways. Indeed, our priorities were reached following quite detailed consultation and advice from departments at the state government level. These governments will continue to work closely with us to establish corridor needs and priorities on the national network.

The AusLink white paper does moot in the future the establishment of a National Transport Advisory Council. The Australian Transport Council, comprising Australian, state and territory government representation, has already agreed to further consider the establishment of the National Transport Advisory Council in the future. If the council decides to establish such a body, it will provide strategic analysis and advice on long-term planning for the national transport system involving all stakeholders, including the private sector.

The Leader of the Opposition is completely wrong in his claims that AusLink is promoting tension between the Australian government and the states and territories. AusLink is intended to promote a cooperative approach between all levels of government in Australia for long-term transport infrastructure planning and implementation. The process that is already underway to establish agreed priorities on the national network is clear evidence of that. As a government, we will not abrogate our responsibilities to take decisions in the nation's best interests. We are setting priorities and making the investment. We work cooperatively with the states, territories and local governments, but we will not agree to Labor's amendment.

The third part of that second reading amendment is the broadening of the Roads to Recovery funding purpose. The AusLink bill also demonstrates the Australian government's continuing commitment to local communities through extending the very successful Roads to Recovery program beyond its initial time frame of 2005, a program that I recall the Leader of the Opposition called a `boondoggle' when it was first introduced, but it has been one of the government's greatest programs and well received, particularly with local councils throughout Australia.

I was also pleased to hear that many opposition members are convinced of the worth of this program, which has been, as I said earlier, of enormous benefit to local councils throughout Australia. Local councils know that it is a good thing, and opposition members also know that it is a good thing. In 2004-05 some $253 million is being provided for local roads in the final year of the current four-year Roads to Recovery program. By the end of this current program, some 12,000 local road projects will have been funded. In the four years from 2005-06, and 2008-09, a further $1.2 billion will be provided to local councillors on the basis of a similar funding formula arrangement that has applied under the current Roads to Recovery program.

That sends a very strong signal that this government is determined to continue to help achieve a vibrant economy and social outcomes for local communities. Councils will continue to have wide discretion in determining the projects to which their formula based applications are applied. The key condition is simply that it be spent on the construction and maintenance of roads. The government's firm view is that the planning and funding of public transport services is a state and, in some cases, local responsibility. That said, it is open to local councils to apply funding to road construction projects which might assist, for example, the efficient and safe operation of road based public transport. Honourable members might also like to note that the definition of a road in this bill already includes a path for the use of persons riding bicycles. We do not propose to extend the criteria beyond those for which we have currently provided.

Early passage of this legislation will enable local governments across Australia to be given certainty about the future of funding and the conditions applying to this important stream of funding to improve and maintain local roads. I urge the opposition to enable this legislation to pass not only through this House but through the Senate as quickly as possible so that this important program can again be funded for local councils.

In addition to the $1.453 billion, which will be distributed to councils on a formula basis, $150 million will be provided over the five years from 2004-05 to 2008-09 for local road projects of strategic regional importance. This will include funding for local roads in unincorporated areas. I emphasise that this is additional money. This is new money which is important to local councils. This funding for local roads under the Roads to Recovery money is in addition to the $2.55 billion over the next five years that will be provided to local councils as untied local road grants.

The government is concerned to see not only effective planning in investment decision making but also efficient project delivery arrangements. The application of the national construction code and implementation guidelines is a key part of the government's drive to improve the efficiency of the construction industry and eliminate uncompetitive practices. It is therefore an important element of the AusLink five-year funding agreements currently being negotiated with the states. I am delighted that the Victorian government has agreed to apply unchanged the national construction code to AusLink projects in Victoria.

Consistent with the government's longstanding undertaking to consult with the states and territories on any proposed changes to the code, the government will consult with the Victorian government on possible future changes to the code and implementation guidelines. A formal agreement is yet to be finalised where, for the purposes of the code, AusLink funding to Victoria would be considered as one project. Agreement to the code paves the way to settle the bilateral AusLink five-year funding agreement with Victoria. This development follows agreements being reached between the Australian and South Australian governments on joint implementation guidelines that will apply to major AusLink projects in South Australia. I strongly encourage the remaining states and territories to now follow South Australia and Victoria's lead.

In conclusion, I reinforce that the arrangements to be established by these bills will drive the development of our key road and rail links and ensure that they are forged into one single high performing and safe national network. They will move beyond the entrenched arrangements for separate road and rail funding which hampered rail development, recognise the critical importance of our links to our ports and airports in supporting a globally competitive transport system, and drive the upgrading of local road networks and the development of key regional links. The Howard government is investing in Australia's future. These bills will provide for the planning and evidence based investment decision-making framework which Australia needs. The government will also provide unprecedented levels of funding for our national road and rail infrastructure. I commend both of these bills to the House.

The DEPUTY SPEAKER (Hon. I.R. Causley)—The original question was that this bill be now read a second time. To this the honourable member for Wills has moved as an amendment that all words after `That' be omitted with a view to substituting other words. The immediate question is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.