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Thursday, 19 June 2014
Page: 6700


Mr ALBANESE (Grayndler) (12:40): by leave—I move amendments (2), (3) and (6) circulated in my name together:

(2) Clause 18, page 18 (lines 5 and 6), omit "Minister who recommended the specification of the grant (see section 19)", substitute "Infrastructure Minister".

(3) Clause 19, page 18 (lines 7 to 16), omit the clause, substitute:

19 Recommendations about grants payments

(1) The Finance Minister must not make a direction under subsection 18(1) in relation to a grant for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.

(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to a grant for an infrastructure project unless:

   (a) Infrastructure Australia has:

      (i) given the Minister an evaluation of the project (see subsection (3)); and

      (i) advised that there are likely to be productivity gains from the project; and

(b) if the grant is for expenditure incurred under the National Partnership Agreement on Asset Recycling—the grant relates to a transaction approved by the Treasurer for the purposes of this paragraph.

(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subparagraph (2)(a)(i) must:

   (a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and

   (b) set out any other matter that Infrastructure Australia considers relevant to the project.

(4) For the purposes of paragraph (2)(b), the Treasurer must, by legislative instrument, approve a transaction relating to the sale of all or part of a specified State-owned asset.

(6) Clause 25, page 21 (lines 4 to 7), omit the clause, substitute:

25 Recommendations about payments

(1) The Finance Minister must not make a direction under subsection 24(1) for the purposes of making infrastructure payments for an infrastructure project unless the Infrastructure Minister has recommended that a direction be made.

(2) The Infrastructure Minister must not make a recommendation under subsection (1) in relation to infrastructure payments for an infrastructure project unless:

   (a) Infrastructure Australia has:

      (i) given the Minister an evaluation of the project (see subsection (3)); and

      (ii) advised that there are likely to be productivity gains from the project; and

(b) if the payments are for expenditure incurred under the National Partnership Agreement on Asset Recycling—the payments relate to a transaction approved by the Treasurer for the purposes of this paragraph.

(3) Infrastructure Australia's evaluation of an infrastructure project mentioned in subparagraph (2)(a)(i) must:

   (a) contain a cost benefit analysis of the project, including an estimate of the productivity gains from the project; and

   (b) set out any other matter that Infrastructure Australia considers relevant to the project.

(4) For the purposes of paragraph (2)(b), the Treasurer must, by legislative instrument, approve a transaction relating to the sale of all or part of a specified State-owned asset.

These amendments improve governance around the way in which grants are made from this so-called Asset Recycling Fund. Amendment (2) consolidates infrastructure approvals with the minister for infrastructure. The range of infrastructure that can be approved is not restricted. Amendments (3) and (6) are critical amendments that place proper process around approvals given to projects by the infrastructure minister. These are preconditions to grants or payments from the Asset Recycling Fund, including under the Asset Recycling Initiative. That initiative proposes a Commonwealth contribution to a state or territory totalling 15 per cent of the reinvested proceeds from a privatisation. The bill provides no criteria for deciding how scarce Commonwealth funds will be prioritised to competing projects.

Labor's amendments propose to fix that. As the Parliamentary Library has noted in its Bills Digest, the strong selection criteria that Labor applied under the Building Australia Fund has not been replicated in this bill. As this bill proposes to empty out the BAF and the EIF, which also had very strict criteria around them, these amendments that Labor is moving will retain independent and transparent approvals processes around project selection. This retains the rigor that Labor had in place under the BAF and the EIF, nothing less. Good governance follows the money. It is absolutely critical that this process be got right. If these amendments are not carried it will be a blank cheque to fund whatever they like out of the Asset Recycling Fund, whether or not it represents value for money for the Australian taxpayer, a good outcome in terms of productivity, and a good outcome in terms of jobs and economic growth. That is why we put in place the structures around the Building Australia Fund and the Education Investment Fund.

Those opposite do not seem to get the idea that it is fundamental that we have proper processes in place and that money from the Commonwealth goes to where it will have the most impact on the economy, not on the margin of electorates. That is why we are moving these amendments, because we have seen with projects like the Perth Freight Link project, no cost-benefit analysis, no plans and no detail in terms of environmental assessment. Indeed, the WA parliamentary secretary responsible in the estimates process in the last week has called upon federal ministers to stop with their rhetoric without any detail. And that is the problem with this government's approach.

These amendments are absolutely consistent with the government's stated position, which is that for all projects above $100 million there has to be a proper assessment. These amendments are also consistent with the broad call for independence and transparency of project advice from important stakeholders such as the Business Council of Australia, Infrastructure Partnerships Australia, the Urban Development Institute, the Bus Industry Confederation and the Tourism and Transport Forum. They are consistent also with Labor's foreshadowed amendments to the Infrastructure Australia Amendment Bill and those we have already moved to the Land Transport Infrastructure Amendment Bill.

These amendments align with the Productivity Commission's recent finding in its interim report on the funding of public infrastructure, where they say:

The overriding message of this draft report is the need for a comprehensive overhaul of processes in the assessment and development of public infrastructure projects.

In the case of either a grant, amendment (3), or a payment, amendment (6), to a state, territory or other entity, the infrastructure minister must first have received an evaluation of the project from Infrastructure Australia and advice from it that the project is likely to produce productivity gains. IA's evaluation must include a cost-benefit analysis of the project. Of course, that must be transparent.

Additionally, for a project involving the privatisation of a state or territory owned asset and recycling of the proceeds into another asset, the infrastructure minister cannot recommend a project unless the Treasurer has approved the privatisation transaction as eligible for a Commonwealth contribution from the Asset Recycling Fund. The mechanism for this approval will be via a disallowable instrument for each transaction.

This proposed change reflects Labor's view that there are good and bad privatisations. We do not believe, unlike those opposite, that privatisation is good on each and every occasion. Nor do the Australian people, which is why we are not prepared to give a blank cheque, politically or economically, to those opposite with this existing flawed legislation. Labor believes, for example, that the Commonwealth should not reward states who are selling assets in a fire sale or without adequate regulatory protections. We on this side of the House have a balanced approach to these issues. If the government were at all fair dinkum, they would be supporting these amendments that we foreshadowed to the government.

We have seen over in the other place this week that the government had to fold their position on the Infrastructure Australia legislation because there was such pressure from those in the business community and others who understand infrastructure policy. The legislation that they had there was about undermining the independence of Infrastructure Australia. They gagged debate on the Infrastructure Australia bills last year. They still have not begun debate in the Senate and it is now June. That is how prepared they were to avoid scrutiny.

Members might remember being here till after 11 pm on the night they gagged that legislation, even though there was no urgency whatsoever. The fact that the government will not bring those bills on until next week confirms that. But these amendments go to the same principles—the same principles that the government talks about but will do anything to stop from being in the legislation. These amendments should be supported by this House. The opposition commends the amendments that I have moved.