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Tuesday, 18 March 2008
Page: 1121


Senator WONG (Minister for Climate Change and Water) (4:05 PM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Introduction—the case for national action

Lifting investment in new physical infrastructure while at the same time making better use of the nation’s existing infrastructure is a key element of the Rudd Labor Government’s plan to raise productivity, fight inflation and maintain economic growth.

Well-planned infrastructure is the arteries of a successful, modern economy and essential to:

  • making our cities liveable and improving public health;
  • bringing economic opportunities to regional and rural communities, generators of 65 percent of the nation’s export income;
  • delivering products to markets;
  • reducing business costs;
  • connecting local companies to the global knowledge economy; and
  • reducing pollution and greenhouse gas emissions.

And in the case of a country like Australia with its vast distances and highly urbanised population, the delivery of good, reliable infrastructure takes on even greater economic and social importance.

By contrast, a failure to fix infrastructure shortfalls, supply chain bottlenecks and urban congestion puts a brake on economic and productivity growth, creates inflationary pressures, and over the longer term, will leave us ill-equipped to respond to the challenges of climate change, an ageing population and globalisation.

What’s more, in modern, industrialised countries such as Australia, the various infrastructure systems are interacting ever more closely, creating interdependencies that heighten the risk of problems in one flowing onto another.

For example, capacity constraints on railways can affect the functioning of ports; water shortages can impede industrial production; and improvements to an arterial road can simply distribute the traffic snarls elsewhere.

In 2004, the Australian Council for Infrastructure Development estimated that the lack of investment in the nation’s infrastructure over many years cost the economy around $6.4 billion a year in lost production.

In addition to slowing economic growth, poor and inadequate infrastructure has a direct impact on family budgets and the bottom line of businesses.

The cost of urban congestion in our major cities alone was estimated by the Bureau of Infrastructure, Transport and Regional Economics at $9.4 billion in 2005, and in the absence of reform, will climb to more than $20 billion by 2020, with the total length of congested roads likely to treble.

But the costs cannot simply be measured in economic terms.  For many families urban congestion means parents spending more time commuting in their cars than at home with their children.

When it comes to ‘keeping the lights on’ here too we have much work to do, with an estimated 30 to 35 billion dollars worth of investment required in the nation’s energy sector by 2020.

Australia’s international gateways—our ports and airports—will also need to modernise and expand in response to growing and changing demand.  For example, international container trade will almost triple by 2020 and air travel is set to jump by 160 per cent over the first quarter of this century.

And with many of our infrastructure challenges I am not just talking about the need for ‘big things’.

In this regard, I would like to quote Sir Rod Eddington, a director of News Corporation, Rio Tinto and China Light and Power—among others—and author of the Eddington Transport Study for the British Government:

“This does not always have to entail large-scale projects.  Some of the best projects are small scale—tackling bottlenecks in the existing network—such as rail platform lengthening and roads linking to ports….”

A clear vision for action

The infrastructure challenges inherited by this Government—some of which I’ve just outlined—are the result of decades of poor planning and underinvestment.  In fact, the OECD ranks Australia 20th out of 25 countries when it comes to investment in public infrastructure as a proportion of national income.

This Government is determined to bring a fresh approach to developing and modernising the nation’s physical infrastructure: replacing neglect, ‘buck passing’ and ‘pork-barrelling’ with long term planning where governments predict and anticipate infrastructure needs and demands, not merely react to them.

In short, the Commonwealth Government is back in the business of nation-building.

The need for cooperation between governments and with the private sector

Nation-building requires the cooperation of all Australian government—particularly in a federal political system like ours with its divided responsibilities—as well as the involvement of all sectors of the economy, both public and private.

Put simply, nation-building requires coordinated solutions.

Unfortunately up until now, the provision of nationally important infrastructure has been considered separately, within different levels of government and in isolation from each other.

Access to ports, for example, can involve the three levels of government, the rail and road transport industry, the port owners and stevedores.

And as the recent capacity constraints in the Queensland and Hunter Valley coal chains have shown, a lack of coordination between governments and the private sector inevitably results in a loss of national income and reduced opportunities for our export industries.

At the same time governments, industry and the investment community need the certainty in planning and evaluation that guarantees good returns—both in profits and the benefits delivered to the community.

Infrastructure investment needs to be determined objectively and according to long term need, not short term political interests—thereby creating an environment conducive to greater private investment in public infrastructure.

So nation building requires not only foresight, but a more nationally-coordinated approach to infrastructure reform and investment—something the business community has long championed.

The Business Council of Australia in its Infrastructure Action Plan for Future Prosperity report called for “…an integrated long-term planning framework across jurisdictions for the coordinated provision of infrastructure … to underpin sustained strong economic growth.”

We need a mechanism that will achieve both these ends—and in so doing, lock in Australia’s future prosperity and higher productivity.

Today we don’t have one.

Infrastructure Australia

Since coming to office last November, the Rudd Labor Government has moved quickly to respond to the nation’s growing infrastructure challenges, restoring infrastructure planning to the heart of national economic management.

For the first time since Federation the Commonwealth Government now has an infrastructure minister and an infrastructure department.

And today I am tabling legislation which once approved by the Parliament will establish Infrastructure Australia—fulfilling our pledge to create this new national body within our first 100 days.

This legislation marks a new approach to the provision of public infrastructure, creating a new body charged with developing a truly national, long term approach to this task.

Mr Peter Taylor, the Chief Executive of Engineers Australia, has said:

“For more than a decade, Engineers Australia has maintained that infrastructure throughout Australia needed better coordination and long-term integrated planning.  The Federal Government’s inclusive approach, through Infrastructure Australia and its close ties to CoAG, is the long needed link for Australia’s future.”

Infrastructure Australia is all about lifting investment in the nation’s physical infrastructure while at the same time getting the most our existing assets.

An Action Plan

The legislation I’m tabling today establishes Infrastructure Australia as a statutory advisory council to develop a strategic blueprint for the nation’s future infrastructure needs.  In partnership with the states and territories and in consultation with the private sector and local government, we will oversight the blueprint’s implementation.

Infrastructure Australia will provide advice about infrastructure gaps and bottlenecks that hinder economic growth and prosperity.

The Infrastructure Australia Council will have 12 experienced members drawn from industry and all levels of government.

The new office of Infrastructure Coordinator will be a statutory office within the Infrastructure, Transport, Regional Development and Local Government portfolio, supported by a small team of professionals.

Infrastructure Australia’s immediate task will be to undertake a National Infrastructure Audit to determine the capacity and condition of nationally significant infrastructure including in the areas of water, energy, transport and communications, and in so doing it will consult widely—including with the owners and operators of existing infrastructure assets.

The Audit will identify gaps, deficiencies, impediments and bottlenecks across these important sectors of the national economy as well as take into account expected future demand.  This information will inform the development of the Infrastructure Priority List to guide future investment decisions.

Infrastructure Australia’s first priority list will be completed within 12 months and presented to the Council of Australian Governments.

This work will allow us to better match investment dollars with the nation’s infrastructure priorities.

In addition, Infrastructure Australia will be expected to provide advice on regulatory reforms that can improve the utilisation of existing infrastructure and streamline new proposals.  It will propose ways to harmonise legislation and regulation across jurisdictions.

For instance, it will have the capacity to examine the potential for standardising tender processes and contract documentation between Commonwealth and state jurisdictions, improve procurement processes and expedite decision making.

It will make recommendations to achieve consistent guidelines of public private partnerships.

Conclusion

As I have indicated, Australia’s physical infrastructure—including strategic energy, transport, communication and water assets—provides an essential input to virtually all economic activities and contributes directly to community well-being.

The Infrastructure Australia legislation is a continuation of a century long Labor tradition.

Labor has always been the party of nation building—it is in our DNA and when it comes to delivering major infrastructure projects we have the historic runs on the broad.

Let’s not forget it was Ben Chifley that courageously started the Snowy Scheme and initiated post-war Reconstruction; it was Gough Whitlam that fixed the sewerage systems of our major cities; and it was the Hawke/Keating governments that invested in urban renewal and built social infrastructure such as Medicare and compulsory superannuation.

Each of these governments demonstrated what is possible with national leadership.  And I can assure the House the Rudd Labor Government will be a government which adapts the strong Labor tradition to the needs of the new century.

Infrastructure Australia is the right innovation for today’s infrastructure challenges.

Or to take the words used by Ben Chifley when announcing work would start on one of this country’s greatest infrastructure projects, the Snowy Scheme:

“It is a plan for the whole nation, belonging to no one State nor to any group or section.  This is a plan for the nation and it needs the nation to back it.”

Debate (on motion by Senator Wong) adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.