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Thursday, 4 December 2008
Page: 8148


Senator LUDLAM (12:26 PM) —I would like to follow on with some comments, in the same vein as those of Senator Milne, about the importance of seeing these funds as essentially a once-in-a-generation opportunity to contribute to the transition to a low-carbon economy that Australia so desperately needs. I would like to preface my remarks by saying that there was an unreasonably short time frame given for the Nation-building Funds Bill 2008, the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008 to be reviewed. The very brief inquiry of the Senate Standing Committee on Economics essentially heard quite unrepresentative comment and input from only five organisations. There were no independent experts and there were no non-government organisations that were really given the ability to comment in the time provided. So what we are seeking to do, particularly with the foreshadowed amendments and the proposal for a joint standing committee on nation building, is to provide a measure of that accountability which, unfortunately, was lacking in the run-up.

This really goes to the question: what are these funds for? Are they preparing Australia for the challenges of the 1950s or the challenges of the 21st century? That is really what this debate rests on. The global economic crisis has prompted the call for swift passage of the bills, but, given the sums of money involved and the problems that would result from policy of this kind being made on the run, it would be worth taking a little more time than has been allowed to improve the transparency and accountability measures and to reach a consensus on how these funds should be managed and invested, particularly given the concerns that the committee heard from the Australian National Audit Office.

As Senator Milne has said, the overarching principles of the bills that we are addressing today do not touch on the urgent and fundamental priorities of reducing greenhouse gas emissions, adapting to climate change impacts and preparing for peak oil. I think that in the 21st century that is what nation building is really all about. If these principles were to be incorporated, the Nation-building Funds Bill and the COAG Reform Fund Bill would represent a real opportunity to build the infrastructure that we need for this important transition.

This morning was the occasion of the launching of, I think, the first ever Senate inquiry into public transport. I want to make a few comments about the central role that public transport can play, if we are going to be talking about nation building, in refashioning Australia as a renewable economy. In Victoria alone, emissions from the transport sector are growing four times as fast as general energy use. This is not necessary. Not only is an efficient mass transit system an essential component of any carbon reduction strategy, but improving mass transit means Australians will spend less on petrol, waste less time in traffic jams, reduce congestion and be able to access the services that they need. Other benefits of course include clean air, the increased safety of our communities, more open spaces and so on.

What we have now are some of the most car-dependent cities anywhere in the world. They have a very high ecological footprint, but they also come at a very high cost to the people who live there. Our cities rely on the availability of cheap fossil fuel, which will shortly be running out. The dip that we are seeing in world oil prices at the moment, due to the global economic uncertainty, should be seen as very much a transitory stage. It perhaps gives us an opportunity to address peak oil before we are in the midst of an oil shock, when it will be all that much more difficult.

The people who are shouldering the real cost burden at the moment are people living on the outer fringes of Australia’s cities because these areas have vastly less access to public transport services and are thus greatly more vulnerable to the sort of oil price shocks that we are going to be seeing down the line. These are the people who will be left stranded by us if the funds that are to be shortly administered under these bills are not directed to genuine sustainability initiatives. It is in these postcodes—if you look at the most recent figures—that the mortgage defaults are occurring. It is the people stranded on the outer fringes of cities who are most acutely vulnerable to rising transport costs and falling land values. Bringing in public transport and beginning, for the first time, genuine Commonwealth funding commitments to public transport would have quite lasting and quite profound impacts on the way our cities are designed and the way that we live in them. Because public transport, particularly fixed infrastructure public transport like bus rapid transit or light rail, creates high-density cores where people can invest and in which land values improve. In addition, jobs and services can be concentrated close to public transport nodes. That is one way of rescuing land values on the fringes of our cities, rather than leaving people stranded and leaving them to mortgage defaults.

We know, after years of research, that building road capacity does not make public transport a more attractive travel alternative. It does not encourage people to make more sustainable transport choices. The opposite, really, is true. Any gains made on improving public transport patronage are immediately cancelled out by incentives to travel by car. We have seen this in some of the sketchy detail that is available on the bids that the state and territory governments have been putting forward to the Building Australia Fund. One small example is in Western Australia where the new Premier, Mr Barnett, has proposed half a billion dollars worth of Commonwealth funding on further freeways—which we simply do not need—around the airport. This is one of the reasons why we were proposing the joint standing committee to look at the appropriateness of the sorts of bids that are coming through these funds. We were proposing it in order that we do not end up just building infrastructure fit for the 1950s. The minister is required to have regard to the advice that is provided by the various advisory boards but, as yet, no evaluation criteria have been developed to which Infrastructure Australia and other advisory bodies have to apply when giving this advice. The details obviously require some further refinement, and the principles and scope of these evaluation criteria ideally should have been included in the legislation.

As recently as October, in estimates hearings, the department was unable to tell us how they were modelling oil prices and future carbon prices into their evaluation criteria as to which projects would be funded. Obviously, a choice of whether to fund half a billion dollars worth of freeways or urban public transport would rest very, very heavily on assumptions about where the price of energy is going. So we would—very much—like to see the establishment of this parliamentary joint committee as a crucial accountability mechanism so that these funds are put absolutely to their best use, and so that we take full advantage of this once-in-a-generation opportunity.