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Thursday, 13 March 2008
Page: 1809

Mr SHORTEN (Parliamentary Secretary for Disabilities and Children’s Services) (11:08 AM) —It gives me great pleasure to speak in support of the Infrastructure Australia Bill 2008. I have been talking for many years about the vital importance of infrastructure, not just to the former members of my union, the Australian Workers Union, who built this infrastructure in so many parts of Australia, including regional and remote Australia, but also to business leaders and financiers involved in infrastructure projects. In my previous role I was involved in the EastLink project in Victoria, the largest road infrastructure in Australian history. It is worth $3.2 billion and I am pleased to say it is well ahead of schedule. I was involved in negotiating the industrial relations employment structure of the project. There has been enhanced productivity, with great wages and profitability for all concerned. As a result, this project will actually be delivered ahead of time, with, for a project of its size, an almost unprecedented safety record and a great degree of industrial harmony—all done pre Work Choices.

We all recognise that infrastructure is essential for economic growth. I do not believe that, in Australia, financial capability is a problem. There is no shortage of money. Yet in too many areas in Australia we see there are backlogs and we see that state governments have been left to fix up a lot of the problems caused due to the absence of leadership by the previous federal government. To put it bluntly, we have had any number of years of growth, largely on the back of the commodities boom, but we have wasted a massive opportunity to put the building blocks in place for the next 15 years. It should never be forgotten that, if you look at the estimates from 2002-03 forward to 2010-11, the extra money which the federal government was projected to have was to come to $457 billion. Yet, when we look around at the infrastructure bottlenecks, we look at the armada of bulk commodity carriers blockading Australia’s coal and commodity ports, we see massive neglect. In fact, $435 billion of that $457 billion was given away by the previous federal government.

It is time for a more strategic and long-term approach. We have shied away from a strategy for the development of Australia. We see blockages in how we fund projects. We have disputes and regulatory uncertainty which have to be dealt with. We often have a disconnect between what a regulator will view as a fair return, and on what cost basis, and what returns we need to give investors the incentive to invest in projects. Certainly the pricing of infrastructure in Australia is complex, but fortunately we have this bill, which will start the process of providing certainty for investors and Australians generally.

We need an overhaul of our federal-state relations, helping to define each level’s responsibilities. This proposed legislation, in conjunction with the new government’s approach on federal-state relations, will help to at least put some real teeth into the development of Australia’s infrastructure. The public want quick fixes, and that is understandable. Quite often we see that local activists can be more powerful than perhaps the large strategic direction. Without the sort of legislation we see in front of us, we face the risk that Australian investment money will go overseas to where the return is and where the opportunity is. In the competition for global capital, if we do not start focusing nationally on a strategic direction for our infrastructure, we will lose capital and we will lose the global race to nations with strategic priorities and good execution.

When we look at the serious bottlenecks, particularly in transport, water and broadband, we realise the nation’s capacity is being held back. To create economic growth we need to invest in infrastructure. Not only does infrastructure enhance economic growth; what we will do by improving infrastructure, particularly transport and energy infrastructure, is reduce the cost of doing business. Reducing infrastructure bottlenecks will help to try and re-cork the not so affectionately named ‘Liberal inflation genie’ which was released from the bottle by the previous government.

Developing our infrastructure will help us to capture export growth opportunities. For example, improving the rail links to major iron ore and local ports in the northern part of Western Australia and in New South Wales and Queensland will help capture opportunities to meet the high level of demand from China and India for our resources. As a young union official flying around the country, talking to workers in all of the energy producing and primary producing areas of Australia, it was a source of some national shame to see all these ships tied up offshore when in fact, if we had had national strategic leadership on this question, we could have been capitalising even further on the remarkable minerals boom globally.

We need leadership in infrastructure. That is what this legislation provides. I believe that politics in Australia needs to understand that there is a bigger risk of underreacting to infrastructure than there is of overreacting. Leadership is what this bill will provide—leadership that has long been on holiday in this nation. It will come as no surprise that it is a Labor government that is putting forward this bill, because Labor has always been the party of nation building, the party of the future, not the party of the past. Labor has always had long-term vision. Without long-term vision it is impossible to build the infrastructure this nation needs.

Early last year we celebrated the 75th anniversary of the building of the Sydney Harbour Bridge, a remarkable accomplishment. Look at the pictures of the Sydney Harbour Bridge when it was first opened. When it was planned and built in the early part of last century, when horses were still common in the streets of Sydney and cars were the province of the wealthy and the lucky, someone decided to build a bridge with eight car lanes. Who on earth, these days, is thinking about building roads which will cover our future needs as opposed to just our immediate needs? I think that that is the sort of planning for the future which we need to recapture.

Mr Windsor —Build a new bridge!

Mr SHORTEN —I am not saying we need a Harbour Bridge everywhere, but certainly over the water. I do believe that Labor have that kind of vision where we are concerned not just about the next election or the opinion polls but about leaving a legacy which carries on after we have departed. The proof of this is that as early as May 2005 Labor announced that we would establish Infrastructure Australia. In August 2007 our Prime Minister, Kevin Rudd—who was Leader of the Opposition then—reiterated that pledge. Kevin Rudd, our leader, said that Infrastructure Australia would deal with policy and regulatory issues, audit the adequacy of the nation’s infrastructure, identify weaknesses, prioritise projects, evaluate the business case of projects and financing options and manage the probity process.

The bill we are speaking to today has been years in the planning. The member for Cook has said that the Prime Minister is a new ‘father of federation’; it is certainly not a mantle that one would bestow on the most recent previous occupant of the prime ministership. Members of the opposition might not be aware that once upon a time we used to extol the virtues of nation building. It used to be something that our national government did as a matter of course. But for the last 11 years, regrettably, this nation’s national leadership has been asleep in some sort of infrastructure coma, from which Labor has had to awaken the nation.

Back in 2003 the Allen Consulting Group prepared a report for the Property Council of Australia about financing urban public infrastructure. They pointed to compelling evidence linking investment in public infrastructure with productivity growth and economic prosperity.

Mr Danby —You will not hear this from Warren Truss.

Mr SHORTEN —We will come to the National Party in a moment, Member for Melbourne Ports. The report argued that, in addition to underpinning economic performance, public infrastructure also features in the social and environmental capital that binds our communities and makes them livable. Two years later, in 2005, that notorious ‘left-wing’ organisation the Business Council of Australia called for urgent action on Australia’s infrastructure problems, warning that the problem of infrastructure blockages was the single greatest barrier to our future prosperity. Unfortunately, whilst the message was put in the bottle, no-one in the government ever collected the message on infrastructure from the beach.

There has been no coherent nationwide planning, coordination or strategy in respect of this nation’s national infrastructure needs. What we inherited from the last government—other than high inflation, foreign debt and slip-sliding productivity—is costly bottlenecks in our export and supply chains. Unfortunately, many of our industries still have to rely on inefficient and outdated infrastructure. And let us not forget education infrastructure. That has been forgotten for too long—for the last 11 years, under the last government.

While Labor has a long-term vision, the previous government lived in a mendicant-surplus state from budget to budget, election year after election year, spreading its largesse in the most short-term of conclusions. Last year’s budget was a typical example of this mendicant tax banditry of the previous government. It was an election year budget that once again was long on short-term largesse but short on long-term ideas about the challenges facing the nation.

Mr Windsor interjecting

Mr SHORTEN —The member for New England again correctly identifies the failures of the previous government in infrastructure. The 2007 federal budget showed more than anything that the Howard government continued its failure to wisely invest the proceeds of the sustained economic growth brought on by the minerals boom. Parking large amounts of money in the Future Fund and not-so-large amounts of money in endowment funds, with virtually no detail of how it would be spent, is not planning for the future, especially when you actually ban your Future Fund from investing in infrastructure. If I were feeling polite—which I am—I would just say that this is fiscally sloppy. If I were feeling slightly more adventurous, I would look for the collective noun for a group of pork-barrels—maybe it is a piggery.

Mr Danby —Maybe it is a National Party!

Mr SHORTEN —Words fail me. When you cannot call a clear strategy or pathway from the opposition, do not be concerned that it is a temporary state of affairs. In government, the opposition certainly was not demonstrating any sort of foresight about how this country might look in 10, 20 and 30 years time. That was just never on the radar of the previous government.

What we saw for 11 years was the failure of the Howard government to invest in infrastructure. They sold more than they built. Thank goodness for the nation their reign has come to an end. We in the Labor government, given the trust of the Australian people, have inherited the consequences of these long years of mendicant investment in Australia’s infrastructure. Infrastructure Partnerships Australia—again, not another left-wing think tank—has estimated that there was a $25 billion underinvestment at the national level in pretty much everything from roads to sewage—everything from the letter A to the letter Z. That has been costing us around $6.4 billion each year in lost production.

The Reserve Bank of Australia has said over and over again—20 times in the last three years—that capacity constraints are constraining our exports and economic growth. In fact, Rupert Murdoch—not a notorious Fabian—kindly pointed out to us last year that the broadband services in this country were a disgrace. Australia has one of the worst telecommunications infrastructures in the Western world, and it has been left to our own minister for telecommunications, Senator the Hon. Stephen Conroy, to fix these problems. It has taken a while, and the release of a great Labor policy, for the former government to discover broadband, even though they went for an inferior option. They have been short-sighted.

I think Reg Ansett, talking about the 727s that he brought back from the United States in the late 1960s, spelled out the sorts of aspirations and dreams that we should have for our infrastructure. He said about these planes he purchased in the late 1960s:

They are the best technology (or planes) in the world so they are just good enough for Australia.

Reg Ansett understood that we should be ambitious for the best infrastructure in the world. We need the best in the world in order for Australia to be competitive and to drive growth and productivity. We are a small nation of 21 million people on the edge of the fastest growing economic miracle in the world—Asia—but the rest of the world does not owe us a living. We have to make our own future. Indeed, this bill is the start of the process of having a national voice and direction in terms of infrastructure. The new Labor government understands the need for Australia to have the best.

The reception of this bill outside of this place speaks volumes for the wisdom of this legislation. The chairman of Infrastructure Partnerships Australia, Mark Birrell, formerly Liberal leader in the Victorian upper house, in January this year hailed the creation of Infrastructure Australia. I must acknowledge that I have not always quoted what he said with approval in previous debates but in this one we are of one voice. He said:

The creation of Infrastructure Australia is the most important reform this sector has ever seen when it comes to having much-needed national leadership to meet Australia’s critical infrastructure needs.

Mark Birrell also applauded Labor’s inclusive approach. He said:

The Government’s infrastructure plan had been well communicated to construction and finance companies over the last year and there has been a detailed dialogue between business and the Government on how to deliver Australia’s next round of infrastructure.

Mitch Young, from Lighthouse Infrastructure, has called the plan ‘logical, necessary and politically courageous’. Engineers Australia called it a ‘long needed link to form a true partnership between the three spheres of government, business and the community’.

I served on the board of the second-largest superannuation fund in Australia—AustralianSuper—for 10 years and I know that the superannuation industry is excited about the prospect of investing in this nation’s infrastructure. Currently just 3.1 per cent of superannuation funds are directed at infrastructure but little of this, tragically, is spent in Australia because under the previous government there was no big picture to invest in. Sid Bone, CEO of a fund that I was formerly a director of, the Victorian Funds Management Corporation, says that he would like to invest in more Australian projects. We just need the opportunity.

This bill is an important part of our fight to try and recork the Liberal genie of inflation, carelessly and recklessly released over the last number of years. I believe this is a fiscally responsible bill; I believe it is a visionary bill. It is going to be good for the workers who build the great infrastructure projects of Australia. It is good for business, it is good for the economy and it is good for the future of our nation. It is good at last to see a Commonwealth government re-assuming its true leadership role in infrastructure. For me, this bill and all the discussion on infrastructure drill down to capacity building—to building Australian capacity for this 21st century.

When I think about capacity building, I think of physical infrastructure, of people, of generating ideas and innovation, of dealing with the current rigidity between the three levels of government, of education and skills, of public transport and health, and of reforming the regulatory frameworks, which should be a source of innovation and competition, not a dead hand to resist development. But when I think about this bill and about capacity building, I think about the encouragement of private investment. The private sector is the doing arm of the Australian economy, but what it needs is regulatory certainty, the reward of encouraging competition and long-term thinking. I understand that change not only comes from within this place; it also comes from outside this place. But, with this infrastructure bill, I think we are seeing politics catching up to where the community and business already are.