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Thursday, 19 June 2014
Page: 6687


Mr ALBANESE (Grayndler) (11:31): I rise to speak to the amendment that has been moved to the Asset Recycling Fund Bill 2014 by the member for Melbourne—

Mr Katter: And the member for Kennedy!

Mr ALBANESE: and seconded by the member for Kennedy! I indicate that the opposition will not support this amendment. It has been moved as a second reading amendment and would have the effect, because it deletes all words after 'That', of changing the title of the bill. It would have the effect of negating the further debate on this important issue.

I do want to indicate that there is a very good argument, which I am sure may well be pursued by the member for Melbourne and the member for Kennedy, to change the name of the bill. It could well be a consideration-in-detail amendment. They do make the point that it is perhaps more transparent a description of what this legislation is than the 'asset recycling' terminology, which is an attempt to encourage privatisation without actually saying that this legislation is about encouraging privatisation. But we will come to that point when we get to the consideration-in-detail stage.

I have indicated that I will move substantial amendments in the consideration-in-detail stage to this legislation. This is to improve the operations of the bill and to make sure that it is transparent. The opposition's amendments will go to the issue of making sure that there is proper cost-benefit analysis so that investment in infrastructure has to be in the most productive infrastructure possible, rather than infrastructure based upon a political decision. We want the economic growth and jobs to be the key factor, not the marginality of seats—frankly, given the National Party's record on these issues and the fact that in the budget that has just been handed down there are projects like the Perth Freight Link project. The WA government have said themselves that there is no plan, there is no detail and there is no cost-benefit analysis, but it is just appeared in the budget. So, I certainly understand the motives of the member for Melbourne and the member for Kennedy for their amendment, but we will not support it at the second reading stage.

In terms of the proposition: we also indicate that it is our view that should any asset be privatised then that needs to stand by itself—whether that is indeed a positive thing for any state or territory jurisdiction. We do not have a view, unlike those opposite, that 'public, bad; private, good'. That appears to be the motivation of those opposite. I indicate some surprise that during this debate no government member up to this point—and their speaking list has been exhausted—not one, has mentioned the budget initiative from last year of the tax loss incentive that was put in the budget for designated infrastructure projects.

This came about through an exhaustive consultation process by my department with the sector. It came into effect on 11 July 2013 after legislation was carried in this parliament. This legislation was about encouraging private investment into nationally significant infrastructure. We on this side of the House recognise that government cannot do it all by itself. We need to encourage private sector investment. And we did that with very practical initiatives in legislation, ones which we know the now government paid no attention to in terms of detail over the previous term of parliament. Now that they are the government they should actually have a look at what legislation is in place that provides an opportunity to encourage investment in infrastructure.

The infrastructure investment incentive uplifted the value of carry-forward losses by the 10-year government bond rate and exempted the carry-forward losses and bad debt deductions from the continuity of ownership and the same-business tests. That is, an asset that was a brownfield asset where there was no incentive for private sector investment because the loss of capital that comes in at the front end of any infrastructure project through the construction phase could not be picked up if there were a change of ownership of that asset. We introduced this practical change with a support of up to $25 billion in new private sector infrastructure investment to apply from the previous financial year. In order to receive the tax loss incentive, applications had to go through the Infrastructure Australia process, and that is the point of our amendments that I have foreshadowed. It has to be for nation-building infrastructure. That is why we build it into the process.

But there is another reason as well. The money for this fund is not new money. It is money that was already in the budget in the Building Australia Fund and the Education Investment Fund. That money of $5.9 billion was there with a system around it to ensure proper expenditure. The BAF could only be used for priority projects as recognised by Infrastructure Australia. The EIF could only be used after recommendations by experts and a panel, meaning that this was making a significant contribution to the national effort in terms of science and research, producing, therefore, future productivity and future benefit for the nation. Indeed, in this year's budget—with the rhetoric of those opposite about private sector investment—cuts were made to the existing funding that had been made available in the 2013 budget for the Brisbane cross-river rail project and the Melbourne Metro project. What we had there was a system whereby there were upfront payments from the government but the government also put it forward an offer of 50 per cent of an ongoing availability payment for the capital cost. As well as that, there was an Australian government guarantee on private debt to enhance the projects' creditworthiness and help reduce the cost of capital.

So here you have practical examples of measures to encourage private sector investment into infrastructure. We had agreements worked out with the Queensland and Victorian governments that they walked away from because of the ideological position of those opposite who say that any Commonwealth engagement in public transport is bad. What that does is stop proper investment in productive infrastructure because, if you are about addressing urban congestion, you need strategies based upon public transport as well as roads. You need to make sure there is an integrated transport strategy in our major centres.

To give two other examples, we had the Moorebank intermodal project, a model in which the government established a government owned entity to establish that project to make sure it was ready to go out to market to encourage private sector investment. Without that government entity being involved in the Moorebank Intermodal Terminal, it would not have happened. This is a one-off opportunity to use this large tract of defence land in South-West Sydney to create an intermodal project that will take 3,300 trucks off Sydney's roads every single day and to make a big difference in terms of rail freight. Those opposite did not seem to understand it at all. By establishing the process that we did, we covered some of the preconstruction risk that would have prevented this project going ahead. It was a win for motorists, a win for the environment, a win for our economy and a win for productivity. But what was the position of those opposite on this issue? They opposed it. They actually did ads during the 2010 election. The member for Hughes was very prominently out there opposing this practical proposal.

Also in last year's budget we had the F3-M2 proposal. It was a proposal that was around and was promised by the Howard government. They just did not get around to doing anything about it. We sat down with the New South Wales government and Transurban to come up with a proposition of $405 million from each level of government. It was up to that figure—it may well be that that figure is not needed—to make sure that this long-overdue 7.7-kilometre link road would be built. It will take out the traffic lights and congestion that is currently there in that northern part of Sydney and ensure, because of the link with the M7, that people who are not going to Sydney can get around and through Sydney without going through a single set of traffic lights. It is a great example of the federal government harnessing private investment to build much-needed public infrastructure.

Those opposite of course have sat down with the New South Wales government since, even though the agreement was signed and the money started to flow in the 2012-13 financial year, renamed it NorthConnex and pretended it is a new project. They had a grand press conference as part of the 'magical mystery infrastructure re-announcement tour' by the Deputy Prime Minister and his errand boy, the member for Mayo. They run around the country making re-announcements but they are not actually delivering new investment.

The Labor Party are up for investment by government in infrastructure. We are also up for encouraging private sector investment in infrastructure. What we are critical of is this pretence that money that was already allocated in the budget is somehow new and is an additional incentive into infrastructure. So we will be proposing amendments which, firstly, ensure that the funds from this can be made available on the basis of a proper cost-benefit analysis that is transparent and published and done through the recommendation of Infrastructure Australia. If those opposite do not do that they will be taking away funds that were protected and that legislation ensured would be used for the productive side of the economy, just putting it into wherever they want it to go. Secondly, our proposed amendments will go to making it a disallowable instrument, because this parliament should get to have a say about issues if money is going to be used for those issues. Unlike the other side of the parliament, we do not just say that any privatisation is good. We want this parliament to get a say in that process, and that is why we will be moving amendments in the consideration in detail stage and why we will not be supporting the second reading amendment by the member for Melbourne and the member for Kennedy.