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Wednesday, 4 June 2008
Page: 4446


Mr TREVOR (2:21 PM) —My question is to the Minister for Infrastructure, Transport, Regional Development and Local Government. Will the minister outline to the House why a strong surplus is needed to deliver nation-building infrastructure?


Mr ALBANESE (Minister for Infrastructure, Transport, Regional Development and Local Government) —I thank the member for Flynn for his question. The government has indeed delivered a strong budget surplus of $22 billion that ends wasteful spending and sets aside the vital funds to begin to make up for years of neglect. The government is taking the steps necessary to drive down inflation and drive down interest rates. I refer to the statement by the Governor of the Reserve Bank yesterday where he again, on top of the 20 warnings about capacity constraints in the economy leading to increases in inflation and increases in interest rates, indicated that the capacity constraints in the economy were what had led the Reserve Bank to address demand in the economy by increasing interest rates through 12 consecutive rises.

But you can only invest in infrastructure and address these long-term issues if you have responsible economic management, and that is what the advisory council members of Infrastructure Australia who met for the first time here in parliament today are making a contribution to. The Infrastructure Australia Advisory Council will make recommendations to the government on a range of issues. Firstly, addressing infrastructure is not just about new investment; it is actually about using more efficiently the infrastructure that we have. It is also about making sure that we have greater harmonisation of guidelines and regulations, including on public-private partnerships.

They will also be conducting a national audit into infrastructure and will produce a national infrastructure priority list at the COAG meeting in March 2009. This will be aimed at addressing the infrastructure bottlenecks that those opposite might ignore, not just in speech but in practice, by their $22 billion raid on the surplus. But those who acknowledge that infrastructure bottlenecks are a major capacity constraint on the economy, along with skill shortages, know that we need that long-term planning. The Rudd government is determined to do that. We have the structures in place to do that through Infrastructure Australia. We have put our money where our mouth is by investing in these long-term infrastructure funds, not just in the Building Australia Fund but also in education and health. If we are serious about addressing these issues, we have to be also serious about being responsible economic managers. That means maintaining a commitment to a strong budget surplus as the first point in the Rudd government’s five-point plan to fight inflation.