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National Press Club -

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(generated from captions) welcome to the National Press Club

and today's National Australia Bank

Address and welcome back to Peter

Taylor. Peter Taylor is chief

executive of Engineers Australia

which is an organisation of some 80,

80,000 professionals in that sector. which is an organisation of some

And they've been very involved in

examining Australia's

infrastructure needs both in terms

of the economy and in some

respects, the new emphasis on

terrorism in recent years, and

this, as you've just heard, is an

opportunity to present the last

part of the latest survey on that

infrastructure report card. I

might say we're very pleased to

have here today the President of

the world federation of engineering

organisations of which Engineers

Australia is a part. The findings

of this survey by Engineers

Australia is very important for a

number of reasons, and they will be

received with obviously different

reactions by different people. But

in terms of an informed debate,

just the sort of thing we're into in terms of an informed debate, it's

and I'm glad you're all here today

to welcome Peter Taylor. APPLAUSE

Thank you, Ken, and good

afternoon, ladies and gentlemen.

A week or so ago, I was listening

to the ABC local gardening

talkback show and the presenter

was waxing lyrical about the

of spring. He was talking about was waxing lyrical about the onset

beautiful wattles around the place of spring. He was talking about the

that come out in spring time, he

talking about walking by the lake that come out in spring time, he was

and the blue skies and so on, and

invited listeners to ring in and and the blue skies and so on, and he

him know what they thought of invited listeners to ring in and let

spring. There were a few responses.

Some were talking about the new

growth that was happening around

the place. Others talked about

beautiful new blossoms. Then the place. Others talked about the

lamented about the onset of hey beautiful new blossoms. Then others

fever. When infrastructure report

cards are in the air, government

reactions tend to be of the

kind, taking the form of reactions tend to be of the allergic

media strikeser or assertions we kind, taking the form of pre-emptive

motivated by self-interest. I'm media strikeser or assertions we are

pleased to assure you that our

reasons are very much purer. We

to raise awareness that reasons are very much purer. We aim

infrastructure underpins the

of life and poor infrastructure infrastructure underpins the quality

impedes poor economic and social

growth. We also want to generate

debate on the quality and quantity

of infrastructure to meet society's

needs and encourage best practice

based on asseten-management

principles and sustainability and

demand management. In 2000, we

produced a basic report card on the

nation's infrastructure to

problem areas. That was followed nation's infrastructure to highlight

with a more extensive Australian

infrastructure report card in 2001.

We then embarked on a detailed

state-by-state assessment. New

South Wales and Queensland were

remain completed in 2003 and 2004. And

remaining State and Territory completed in 2003 and 2004. And the

cards have just been completed. By remaining State and Territory report

weighting these results, according

to the State and Territory

economies, we have compiled this

new, comprehensive update of Australia's infrastructure. Unlike

in the 1990s and earlier this

decade, infrastructure has become

flavour of the month and we applaud

the public discussion that is

occurring. Many associationings

consulting firms are publishing occurring. Many associationings and

reports about infrastructure with

similar themes to those that we

been presenting for many years. similar themes to those that we have

Although we have outlaid a very

significant sum on this project, we

have not been able to cover all

school infrastructure types. Hospitals,

schools and communications are the

more obvious omissions. I think,

really, in recent times,

telecommunications have been done

death, but we are currently scoping telecommunications have been done to

a broader communications review

we may tackle next year. I'm vae a broader communications review that

grateful to Leanne Hardwick who

coordinated the entire project, and

our many volunteers who formed

expert teams in each State and

Territory to research, document and

review the reports in consultant

with our con tul tant, GHD Pty Ltd.

They rely heavily on publicly

available documents, complemented

revenues and industry groups. available documents, complemented by

ratings from A, very good, to F, revenues and industry groups. Using

inadequate. This report provides

up to date strategic overview that inadequate. This report provides an

can be used to assess the adequacy

of particular classes of

infrastructure and to determine of particular classes of Australia's

priorities for maintenance and

capital expenditure. So just how

important is Australia's

infrastructure? For most of the

Century, Australian governments infrastructure? For most of the 20th

iconic infrastructure projects as Century, Australian governments used

catalysts for national and regional

development and to create

employment. The snoeny mountains

hydroelectric scream, the Ord River

damn are a few examples that spring

to mind. By and large, governments

did not run their infrastructure

businesses on clear principles and

decisions often reflected political

considerations. There were many

cross-subsidies and community

service obligations. Prior to

national competition reforms, many

services were unprofitable, had

underutilised capacity

underutilised capacity and many

inefficient. I think most underutilised capacity and many were

now would agree that the situation inefficient. I think most observers

is considerably better.

infrastructure is vital to the is considerably better. World-class

Australian economy. The Allen

Consulting group has identified

services stemming from economic Consulting group has identified that

infrastructure account for more

12% of gross domestic product and infrastructure account for more than

employ 6.5% of the workforce. An

investment of $1 billion in urban

arterial roads is estimated to

increase GDP by $810 million per

year, and create 19,000 jobs. The

big question is: Have we lifted our

performance since 2000?. I'm

pleased to report that

Australiawide, the improving trend

from the abusiness mall D-plus in

2000, to a C-minus in 2001 has

continued to an overall rating of C

opinion plus today. National,

and local roads, rail, goes, opinion plus today. National, State

drinking water, waste water,

stormwater and irrigation have all

improved slightly since last time.

Airports have made their good

rating, but it is really

disappointing that --

that electricity and ports have disappointing that -- disappointing

slipped backwards. Well, we

really made huge progress. Overall, slipped backwards. Well, we haven't

the results are heading in the

direction. Let's have a quick look the results are heading in the right

at each of the infrastructure types.

In 2001, the overall rating for

roads was C-minus. It has now

improved slightly to C. This

improved slightly to C. This means that our roads are adequate, but

they require major attention to

ensure that they are fit for

ensure that they are fit for current and future purposes. National

and future purposes. National roads at C-plus overall are only adequate,

despite upgrade work on the eastern

seaboard. Improvements to the

Pacific Highway are commendable,

Pacific Highway are commendable, and since 1991, fatalities have halved.

However, heavy vehicles are

transferring from the nu England

Highway to the Pacific are greatly

adding to the problems on those

sections that are yet to be

upgraded. State roads vary in

quality, averagesing C. Increased

traffic on State roads in high

population areas reduces amenity.

In rural areas, maintenance and

upgrading is required to raise them

to acceptable standards. Local

roads only scored a C-minus with

South Australia and Tasmania being

in close competition for the

in close competition for the poorest performing local roads. A lack of

renewal expenditure on the local

road network has led to lower

quality of local roads, although

quality of local roads, although the roads to recovery program of $1.2

billion over four years is starting

to make a difference. In

Australia's major cities, the

relative convenience of the private

vehicle is placing unsustainable

demands on the road system. The

total cost of congestion is

estimated to be $3 billion per year,

and is expected to triple in the

next 20 years if immediate action

next 20 years if immediate action is not taken. Significant in

not taken. Significant improvements in public transport systems and

congestion pricing will be

congestion pricing will be essential elements in any effort to combat

this problem. A national framework

for planning and allocating

priorities for road funding has

priorities for road funding has been lacking. The AusLink initiative is

a good one, but will need greater

transparency if it is to be

successful in establishing a

framework for transport

infrastructure invest mept to meet

future needs. Between 2001 and

2005, rail improved from D-minus to

C-minus, and there have been some

notable improvements, but

notable improvements, but widespread delays remain and there are

uncertainties with new investment

sz. Many metropolitan rail

sz. Many metropolitan rail networks are becoming congested. Greater

integration of transport networks

integration of transport networks is needed to link regional centres and

to encourage the transfer of

commuters from road to rail.

Integrated ticketing and Smart card

systems are examples of some

positive action. Improved

intermodal facilities are required

to support road-rail operations.

Rail access to ports needs to be

improved significantly to eliminate

bottleneck hs and other capacity

constraints. The

Melbourne/Sydney/Brisbane corridor

is still substandard and affecting

viability. This and the major

problems in the Sydney area

contributed to the poor D rating in

New South Wales. There is an

New South Wales. There is an urgent need of funding to upgrade this

route or to establish an

alternative, such as the inland

alternative, such as the inland rail bridge. Other essentials include

better national coordinatation and

better national coordinatation and a less complex regulatory environment.

We commend the inclusion of rail

We commend the inclusion of rail in AusLink, but urban transport needs

to be added. The it remains to be

seen whether the requisite

improvements will be made a high

priority. Drinking water was

priority. Drinking water was graded C in 2001. In 2005, it has

C in 2001. In 2005, it has improved to B-minus. The latest rating

recognises increased investment in

renewing pipe networks, improved

treatment and reduced water losses.

However, expenditure on renewals is

not keeping up with the rate of

asset deterioration. Recent

droughts have highlighted the need

for greatly improved and efficiency

and new sources of sly. Problems

still exist with excess water use

and urban encrouchment on

catchments. Both are solvable

through appropriate policy

development, such as

development, such as reconsideration of pricing principles to reflect

of pricing principles to reflect the true value of water and more

appropriate integrated regional

planning schemes. Within the last

week, the Queensland Government and

Sydney Water announced significant

increases in water prices. These

will help fund water infrastructure

while sending important signals to

consumers. We must not, however,

overestimate the magnitude of gains

that might be achieved through

demand management. These will

require permanent community

behaviour or change, and will not

solve all of the problems.

solve all of the problems. Recycled water is a very underutilised

resource, but it, too,s requires a

substantial education program if

substantial education program if the usual emotional responses to this

source of water are to be overcome.

The rating for waste water was - in

2001 was a C-minus. It is now

C-plus. Rehabilitation of existing

infrastructure and improved

treatment have resulted in reduced

-- reduced discharge of pollutants

into waterways, but problems still

exist. For instance, upgrading is

required to many ocean and effluent

outfalls to meet current

expectations. Raw sewage

expectations. Raw sewage discharges will need to be eliminated. While

the overall water use has been

disappointing there have been

increasing programs of governments

introducing waste water schemes.

This is a positive development

within the water industry. It will

help protect the nation's natural

waterways and also lead to greater

sustainability of our water

resources. Many sewerage systems

are old and nearing the end of

are old and nearing the end of their service lives or have limited

capacity. Stormwater has onlily

marginally improved its rating from

D to C-minus. Most stormwater

infrastructure is old and funds for

maintenance, repairs and renewals

are lacking. Flood damage is the

most expensive of Australia's

natural disasters, averaging more

than $300 million per year.

Stormwater pollution contributes to

waterway degradation which, in

waterway degradation which, in urban areas is a major issue. Of

fragmentation responsibilities for

management, regulation and control

add to the problem. Solutions

including coordinated catchment

management, improved land use

policies and implementations of

systems which reduce run-off and replicate natural

replicate natural water cycles.

replicate natural water cycles. New development in the Coomera area

between Brisbane and the Gold Coast

is a good example of integrate

is a good example of integrating

poetable and stormwater recycle

management. South Australia was

management. South Australia was too isolated a case to lift South

Australia's rating above a D. I

Australia's rating above a D. I was pleasantly surprised, though, a

couple of weeks ago that the South

Australia infrastructure ministers

wasso response to this was not a

poor one, but an approach to

improving stormwater performance.

In 2001, irrigation was rated

D-minus. Since then, reasonable

progress has been made, lifting the

score to C-minus. Across Australia,

our heavy reliance on irrigation

our heavy reliance on irrigation for agricultural purposes is

contributing to widespread land

degradation from 15 lint. The

degradation from 15 lint. The sheer scale of the problem and the

potential social dislocation make

salinity a difficult problem to

address. As for urban water, rural

pricing is currently inadequate to

fund the needs of water

infrastructure on a sustainable

basis. Water trading and the

national water initiative should br

about significant improvements.

about significant improvements. The quality of infrastructure in the

electricity sector was rated as

B-minus in 2001. This year, the

rating has slipped to a

disappointing C-plus. The C s. disappointing C-plus. The CSIRO

forecasts that Australia will

require up to 100% more electricity

by the year 2020. Given this

projected growth in energy use and

the current dependence on high

emission fossil fuels, increasing

electricity production presents a

significant challenge. For the

transmission network, the next

decade is likely to be problematic.

The lack of connections between all

State and Territory grids detracts

from supply reliability.

from supply reliability. Generators of electricity must accelerate the

development and use of renewable

sources as they come to grips with

renewable energy targets. I have

renewable energy targets. I have no doubt that public sentiment will

increasingly encourage sustainable

activity with reduced greenhouse

activity with reduced greenhouse gas emissions. Coupled with this,

programs to educate consumers about

reducing consumption will need to

reducing consumption will need to be stepped up. As we become more used

to technology in our houses, I am

sure that smart meters and

time-of-day tariffs will help us to

cut dollars from our own

cut dollars from our own electricity bills and also reduce peak

electricity loads. The in 2001,

electricity loads. The in 2001, gas was rated a C. It is now slightly

better at C-plus. Gas offers

enormous potential to reduce greenhouse gas

greenhouse gas emissions. But the

market has suffered from a lack of

intercon neck tiff and overly

apprenticeship tiff regulations.

The move to a national energy

regulator should be beneficial.

Well, the condition -- while the

condition of assets is good, many

pipelines do not have adequate

capacity to meet demand. Much of

the new demand is predicted to come

from a growing share of gas-fired

generation in the electricity

sector. How quickly this happens

really depends on the introduction

of penalties for coal-fired

electricity generation. Care will

also need to be taken to ensure

also need to be taken to ensure that the attraction of the export market

for natural gas do not detract from

our ability to satisfy domestic

demands. In 2001, ports were rated

B. The rating has declined in 2005

to C-plus. The main concerns with

ports are urban encrouchment and

ease of access to, and coordination

with land and transport systems.

Channel deepening is required to

meet future growth in the size of

ships. The current and continuing

boom in the mineral sector in Western Australia and Queensland

will necessitate the continual

upgrading and provision of

facilities to ensure that ports can

compete domesticly and

internationally. Airports are

generally in good shape and were

rated B, the same as in 2001.

However, future expansion with

attendant noise impact on nearby

residential areas remains a problem.

Solutions to date include quieter

airport, noise insulation and

flight-path sharing. They all

help, but it is a long way off.

help, but it is a long way off. So now that we know how infrastructure

stacks up, where do we go from here?

Overall, the results are not too

bad. There is certainly not an

infrastructure crisis. But we are

concerned that there are still significant problem

significant problems, and we know

that as a nation, we can do a whole

lot better. In addressing

shortcomings in future needs, the

four key issues of sustainability,

levels of service, coordination,

planning, coordination and

integration and funding must be

integration and funding must be kept in mind. I will spend a few

in mind. I will spend a few moments on each of these. Development is

defined as sustainable if it meet

defined as sustainable if it meets

the needs of the present without

compromising the needs of future

generations. In practical terms,

this means that ensuring that our

infrastructure is environmentally,

socially and economically

sustainable. I've mentioned some

sustainable. I've mentioned some of the challenges to environmental

sustainability as I've gone through

the ratings, and a couple of the

the ratings, and a couple of the more important ones are greenhouse gas emission

more important ones are greenhouse gas emissions and pollutant levels

in stormwater and effluent

discharges. To improve social

sustainability, we need to sustainability, we need to reduce

commuter times, increase road

safety, improve air quality and

provide access to broadband

communication for all Australians.

If we are to achieve economic

sustainability, we need to charge

all consumers the true costs of

providing goods and services. We

also need taxation and regulatory

systems which promote new private

sector investment in all

infrastructure that's capable of

generating adequate returns on

investment. Determining

investment. Determining appropriate level of service depends on

understanding the expectations of

the community and the normal

the community and the normal process for doing this is through customer

surveys, but even so, it can be

surveys, but even so, it can be very difficult to determine community

priorities as the issues that

generate considerable debate are

often treated in isolation. Few

opportunities are taken to address

several problems with an integrated

solution. Issues may also be

influenced by media headlines,

talkback radio and political

discussion. Levels of service,

affordability, competing priorities,

risk management, standards and

policy constraints all have to be

balanced. Lack of funding for

infrastructure is a fundamental

issue. Budget ri commitments to

critical infrastructure elements

critical infrastructure elements are often driven by election dates at

the expense of long-term planning

benefits. Infrastructure grants

often only cover capital works with

no allowance for ongoing

maintenance. There is an immediate

need to increase funding for

maintenance and renewals. For some

years, governments have been

reluctant to utilise public debt,

but there is now recognition by

but there is now recognition by some government leaders that all debt is

not bad. For instance, on 5 April

this year, Queensland Premier Peter

Beattie stated that his government

is willing to go into debt to help

pay for Queensland's 20-year

infrastructure plan, and the New

South Wales Government has come to

South Wales Government has come to a similar conclusion more recently,

following surveys in some of their

marginal electorates. The private

sector will provide infrastructure

where there is an adequate return.

That's already starting to happen.

While some projects are more

attractive as design and construct,

others are being undertaken on a

whole-of-life basis, including

maintenance and in some cases

operation. Better balance between

public and private investment and a

more realistic assessment of the

potential of public/private

partnerships are needed. The

declining state of ex- declining state of existing

infrastructure will not be

infrastructure will not be addressed without government leadership and

coordination. Greater public

investment in infrastructure is

investment in infrastructure is both justified and effective. A

challenge for governments is to

challenge for governments is to find new ways of funding public sector

infrastructure. I've already

mentioned government debt, and in

some cases high poth they Kated

taxes or special purpose levies are

more acceptable to the public. As

well, infrastructure bonds may be

attractive to Australians wanting

attractive to Australians wanting to invest in nation-building

activities. The Future Fund,

announced in the federal Budget is

another possibility for investing

another possibility for investing in Australia's infrastructure. We

highlighted this need on Budget

night, and perhaps the $3 billion

for regional telecommunications is

for regional telecommunications is a move in this direction. The need

for more infrastructure investment

will not go away. The cost of

addressing land transport problems

has been estimated at $25 billion,

and I've estimated that about $2.5

billion is needed to fix the

billion is needed to fix the backlog of stormwater problems. If we look

across the board, an add the costs

of catering for ageing and growing

population as it moves to new

housing estates and to the coastal

fringe, a total bill of $100

fringe, a total bill of $100 billion might be pretty close to the mark. Infrastructure provision throughout

Australia requires better

coordination and long-term

integrated strategic planning.

There can be no doubt that the

There can be no doubt that the three tiers of government, with separate

and sometimes overlapping roles and

responsibilities, are partly to

blame. To be effective, planning

needs to cover at least 20-year

time-frames while being flexible

enough to accommodate unforeseen

changes. Parallel financial plans

are critical to guaranteeing the

viability of expenditure and

viability of expenditure and funding proposals. All too often we see

proposals. All too often we see the plan without the funding. Well, --

while there are some examples of

long-term integrated planning on a

whole-off-government basis, all too

often plans by individual

departments or authorities in

relative isolation, and they may

relate only to a single class of

infrastructure. With appropriate

leadership and commitment to

cooperate, it should be possible to

apply the same skills and

apply the same skills and techniques at the national level across all

infrastructure types. For many

years, Engineers Australia has been

calling for national leadership and

the creation of an infrastructure

council. On 3 June this year, the

Council of Australian Governments

released a communique indicating

agreement in principle to last

agreement in principle to last haste en long-term planning under AusLink.

COAG members also agreed to report

back on infrastructure every five

years. These were encouraging

signs, but having tinkered around

the edges, I can't for the life of

me understand why COAG did not

finish the job and establish the

much-needed infrastructure council

to doord not only transport, but

all major infrastructure. Now to

our recommendations (coordinate)

We recommend the plan g

our recommendations (coordinate) We recommend the planning and

provision of infrastructure become

a true partnership between the

three spheres of government,

business and the community. We

also believe that the Council of

Australian Governments must take

immediate steps to establish an

inclusive, national infrastructure

council. It would provide

independent advice on policy, plan

independent advice on policy, planning and delivering -- and

delivery of infrastructure in

Australia. The council would

determine priorities for nationally

significant infrastructure on the

basis of 20-year rolling asset and

financial programs, and determine

which infrastructure is best funded,

constructed, maintained and

constructed, maintained and operated by the public sector, and which by

the private sector. As an expert

body, the national Infrastructure

Council would be expected to

Council would be expected to provide advice on further reforms to

regulation and taxation legislation,

whole-of-life management and

returning funding sources.

returning funding sources. Critical to its effectiveness would be

programs to increase communications

with the public and increase

stakeholders to encourage active

participation in the infrastructure

debate. The national Fraur.

Infrastructure Council is not a

threat to state and local

threat to state and local government rights and responsibilities as it

would not be able to address state

and local infrastructure, except in

cases of national significance.

Adequate infrastructure underpins

our economy and the standard of

living of all Australians. We have

benefitted greatly from the vision

and commitment of some of our

forebears. It is therefore

incumbent upon us to provide an

equal or better legacy for future

generations. Engineers Australia

strongly believes that adoption of

our recommendations would result in

much-needed improvements in the

planning, delivery and maintenance

of infrastructure that are critical

to national sustainability. As

to national sustainability. As I've travelled around the country in

recent weeks, attending the

recent weeks, attending the releases of State and Territory report cards,

I am certain that we have succeeded

in raising awareness of the

importance of good infrastructure

importance of good infrastructure to Australia's economy and our daily

lives. But the debate must

continue, and it must be given

higher priority if we are to

higher priority if we are to achieve the greater national focus and

leadership necessary to overcome

sectoral interests and deliver the

improvements essential to meeting

Australia's current and future

needs. Thank you. APPLAUSE

Thank you very much, Peter Taylor,

chief executive of Engineers

Australia. We have as usual a

period of questions now starting

with Simon gross. Simon Gross from

science media. You cited CSIRO's

prediction that Australia's energy

demand will double in the next 15

years. I think the electricity

supply Association of Australia

predicted a similar trend. I think

it says we would need to built a

it says we would need to built a 700 meg watt power station for the next

15 years to meet demand. The way

we're going, all those power

stations will be gas or coal-fired

stations will be gas or coal-fired with all the greenhouse

with all the greenhouse implications that come with that. What's

Engineers Australia's view on the

potential for renewable energy to

fill that gap, and what's Engineers

Australia's view on the necessity

Australia's view on the necessity to consider the nuclear option? A

couple of interesting points there,

Simon. Thanks for the question.

The nuclear debate is one that's

The nuclear debate is one that's got to be had, but it's got to be one

that all Australians are

comfortable, or the great majority

of Australians are comfortable with.

I think as technology improves

further down the track, it will

provide a much-needed solution,

provide a much-needed solution, but we have to deal with the disposal

problems and so on . We also have

to make sure that there are in place

to make sure that there are controls in place which are effective to

in place which are effective to deal with the by products of that

industry. As far as the renewable

energy debate is concerned, there

are whole lots of options there, I

guess. We've heard much about wind

power. I think there is a fairly

finite limit to that. When I was

finite limit to that. When I was in the UK last year, there was a bit

the UK last year, there was a bit of discussion about how many wind

generators would be needed to

satisfy the requirements of the

United Kingdom. There wasn't

United Kingdom. There wasn't enough land space in the UK to be able to

build them all, so I don't think

it's the pan see ya. It's one of

the elements. Gas is far better in

terms of emissions than coal, so it

will probably provide some

will probably provide some solutions as well, but there has got to be a

balance, and as new technologies

balance, and as new technologies are developed and greater efficiencies

are produced, I think we will come

to some solutions. Next question

to some solutions. Next question is from David Denham. Thanks, David

Denham from Preview. First of all,

I would just like to ask a question

about what the - about what you

think are the top priorities in

terms of where you would put money

to improve on the categories that

you've listed? If we're looking in

terms of wealth generation and

sustainability on a national scale,

and the Prime Minister asks you,

"OK, you've got $5 billion. Where

should that be spent? And I want it

in the next five minute

in the next five minutes," where

would you spend it? And while

would you spend it? And while you're thinking about that, can I just ask

a question about communications,

because you said in your talk that

it had been done to death recently.

It seems to me that this should be

slotted in there as the key

infrastructure in this day and age,

and we're not doing so well, as far

as I can see, because the last OECD,

as you are aware, 21 out of 30, or

something like that. Where would

you place broadband

telecommunications now, or

telecommunications on that rating,

seeing it has been done to death

seeing it has been done to death and you must have an idea of what the

rating is? I will deal with that

question first, I think. We

question first, I think. We weren't in a position to provide ratings

because with the telecommunications

industry being so highly

competitive, getting publicly

available documents on which to

available documents on which to base a sound, objective rating was nie

a sound, objective rating was nie on impossible. That was one of the

main difficulties. Secondly we had

to draw the line in some places in

tackling this major task. So we

deliberately avoided the

telecommunications one. And I

telecommunications one. And I share the frustration that a lot of

the frustration that a lot of people do. If I travel around, if you go

to a hotel, for instance, that only

has dial--up, it's mind-bending to

try to keep up with what's going on

in the office as well as trying to

do what you're doing while you're

away. So I would like to see the

broadband facility increased

enormously, but we are currently

scoping a much broader

scoping a much broader communication study which we hope to be able to

tackle next year. In terms of

priorities, I'm not sure I can give

you a priority in terms of wealth

generation, but I think one of the

biggest priorities at the present

time is dealing with the water

issue. Now, the launch in Adelaide

of the South Australian. South

Australian report card, Paul

Australian report card, Paul Perkins was speaking, and he made the point

that he didn't believe there was

that he didn't believe there was any shortage of water in Australia as

such, it's just that the whole

system had to be made far more

efficient. Now, I'm not sure

whether he's right on that point or

not. Certainly, as I said in the

talk, we have to be very careful

that we don't overestimate what can

be achieved through demand

management, because sooner or later

we are going to have to build more

dams, and we are going to have to

get much smarter

get much smarter with our recycling

technology, and people will, like

some countries have overseas, come

to the realisation that drinking

your own is not such a bad thing.

And I really do think, and it is

being tackled by private enterprise

as well, if we get the charging

regimes and the pricing regimes

properly set, then private

enterprise will be able to invest

enterprise will be able to invest in that industry and make a sufficient

return on their investment.

Next question from Jill tots field

From the 'Melbourne Age'. How

critical do you believe it is for

Australia's ports that the

channelling in Port Phillip Bay

goes ahead? There has been a fair

bit of talk about those sorts of

things. As ships get bigger, it

obviously becomes more of a problem.

I think we have to sit and wait

I think we have to sit and wait for a bit and see what the result of

that trial at Port Phillip is.

that trial at Port Phillip is. It's not the only one. I think South

Australia is having the same

problem. We have to move with the

times. If ships get bigger, we

times. If ships get bigger, we have to be able to cater for them,

otherwise we will lose our

competitive advantage. Tim Lester.

Peter, Tim Lester from national

Nine news. Given you say you are

now scoping for a more detailed

telecommunications study, can I

telecommunications study, can I ask you is that motivated by a belief

that there is a serious problem in

telecommunications, particularly in

light of the fact that Telstra

apparently briefed Government last

month, or senior ministers, on the

fact that there was a more than $2

billion underspend in recent years

on infrastructure, and given you've

already expressed that you're

limited in what you can say, what

can your organisation provide in

terms of information to the

Australian public on the debate

about whether our

about whether our telecommunications infrastructure is adequate, given

that debate is so important now?

Thank, Tim. I will correct you

just a little. I said we are

scoping a broader communications

study, rather than strictly

telecommunications, but - I don't

want to go too far into that. I

think there is enough people

talking about that at the moment

who know more about the subject

than I did, and anything I can

contribute would be fairly

limited. What I would say,

however, is that our decision to

scope that happened long before

scope that happened long before we started to hear the events of the

last couple of weeks. The it

actually was initiated by people

within our own volunteer groups who

have an interest in the

communications industry, and they

have been wanting us to tackle this

exercise for quite some time. So,

they and others are currently

working on the problem to see what

is the scope of the subject that we

should be dealing with and what we

should devote our time to. Peter,

could I just take you back to a

couple of things that have been

raised already. Given the finding

raised already. Given the findings

that your surveys have made, what

that your surveys have made, what do you think about the structure of

Australian industry? There is

obviously a very strong coal lobby

and many of the political leaders

acknowledge that, particularly

acknowledge that, particularly in

Queensland. Yesterday there was

confirmation that the Haas Dell

confirmation that the Haas Dell wood power station in Victoria --

Hazelwood power station in Victoria

would be expanded, despite its

environmental reputation, and yet a

lot of the infrastructure that has

been privatised as burnt the people

who bought it. A lot of people who bought it. A lot of people have retreated from Australian

infrastructure, especially American

buyers, with huge losses. What

buyers, with huge losses. What sort of infrastructure would we need to

support the sort of objectives that

you would like to see, and how far

away from it do you think we are?

Well, hopefully not too far away.

I think the whole point for a

national infrastructure council is

to get all the parties involved, so

that they can see what's important

to each sector, and they can start

to Pryor ties work right --

priorityise work right across the

board so they can concentrate on

coal, water or particular areas of

interest. I'm no expert on

structuring industries, but I think

if we can get people talking

together, finding out what the

community needs, finding where the

priorities are, finding which

activities are best undertaken by

government, which activities are

best undertaken by the private

sector, then I think we can start

making some rational decisions,

particularly if we then put

particularly if we then put together the financial plans to back it up.

As I said during the talk again,

it's all very well to have a very

nice-looking strategic plan which

shows this work has got to be done

in this year and this work has got

to be done in that year, and each

to be done in that year, and each of those things are going to cost a

certain amount of money, but if we

don't know where the money is going

to come from and we don't know if

to come from and we don't know if we can afford to borrow, and we don't

have all that worked out over the

same period of the plan, then I

think we're kidding ourselves.

We've had to do that in our own

organisation to make sure that we

can exist on a viable basis into

can exist on a viable basis into the future. I think it is a big ask,

but it can be done, and I'm hopeful

that the signs that COAG showed at

the last meeting might develop into

something a bit more constructive

about putting that infrastructure

council together. The next

is from Paul Malone

council together. The next question is from Paul Malone From the

'Canberra Times'. Following on

'Canberra Times'. Following on from that, the need for coordination in

some critical areas such as water

does Engineers Australia might

does Engineers Australia might think there is a need to take things out

of their hands and hand control

of their hands and hand control over to the Commonwealth if need be by

referendum? I think that's a

referendum? I think that's a fairly extreme step and I wouldn't be

advocating that. I think we've

advocating that. I think we've seen some pretty good improvements in

recent times. The best example, I

guess, is the Murray Darling basin,

and we always hear the problems of

the State rights issues and

Queensland taking water out before

it crosses the border and so on,

it crosses the border and so on, but I think we've come a long way since

then. I think the national water

initiative - and there is a sense

initiative - and there is a sense of cooperation out there where States

are realising they can't keep doing

their own thing, looking after

their own thing, looking after their own vested interest the whole time.

Of they do have to work together in

the the national interest, and I

think the signs at the moment are

encouraging. Question from Laurie

Wilson. Laurie Wilson, director of

the National Press Club, Mr Taylor.

Alt a recent national

Alt a recent national infrastructure forum here in the Press Club,

forum here in the Press Club, hosted by the National Australia Bank, the

point was put that there were a

number of problems in terms of

blockages to infrastructure going

ahead. Things standing in the way.

Regulation was cited as one, skills

shortages cited as another, look of

coordination between governments

cited and as third, and there were

other factors. The what do you see

as the main problems that need to

as the main problems that need to be addressed? Perhaps again I'm asking

you for a list of priorities here,

but particularly regulation is

talked about a lot. Is it as big a

problem, do you think, as many

people claim? Thanks, Laurie. The

regulation issue, and I know it was

addressed very substantially at

addressed very substantially at that forum and I'm sorry I wasn't able

forum and I'm sorry I wasn't able to be there - we were away releasing

be there - we were away releasing an infrastructure report card

infrastructure report card somewhere - but I've read the transcript, and

depending on who was speaking at

that forum determined what level of

emphasis was given to regulation.

Obviously Graeme Samuel put a lot

Obviously Graeme Samuel put a lot of emphasis on regulation. Others saw

it as less important. I wouldn't

like to put a figure on it, but

like to put a figure on it, but from my travels around Australia, we've

certainly heard very an neck dote

tal stories of people who found

tal stories of people who found that projects haven't got up because of

some regulatory problems, others

some regulatory problems, others are being stalled because of that (

being stalled because of that (anecdotal), so there are problems,

and I know the Victorian Treasurer

cites an example from the Gippsland

area where somebody was looking to

do a development down there, and it

required 32 different regulation

requirements to be met before that

development could be approved. So

obviously there is room for

improvement, and I think people

improvement, and I think people have to realise that Australia is one

nation. And you can take State

rights, friendly competition is

good. It promotes activity and

helps develop a State's competitive

spirit and so on, but I think

ultimately they have to realise

they're all part of Australia, and

if we are going to move Australia

forward the way we need to move it

forward, then there has got to be a

higher level of cooperation. So I

think, when it comes down to it,

cooperation and leadership from the

Federal Government to make it

Federal Government to make it happen are two pretty important things.

Back to Simon Gross. Simon gros.

I wouldn't der if you would give

I wouldn't der if you would give me a "to build a dam, please. You

a "to build a dam, please. You said that eventually we will have to

build more dams which is a line we

get a lot these days. It is always

eventually. Here in the ACT we're

doing that. It was recently said

that we don't need a new dam for 20

years. The that was put to us as

saving money, to not spend it now.

I just wondered if it would be

cheaper to build a dam now than say

in 20 or 30 years. How would you

see the friends -- see the trends

in construction costs affecting

in construction costs affecting that kind of infrastructure investment

over time? I think there are a

couple of interesting questions

there and I go back to some

experience from my previous life

where one of the cities I was

involved with was looking at future

water supply. Now, they had been

looking at all manner of

alternatives. One was a dam. alternatives. One was a dam, and

one other was to use recycled water.

They've been very successful in

recycling water to various uses -

to - I probably shouldn't use this

example - to help power stations,

but also for other specialist

projects. They are now working on

the proposal that will see most of

the recycled water returned to one

of the city's dams, and then

recycled through the treatment and

reticulation system. Now, that's

reticulation system. Now, that's a pretty positive step. That, from

memory, would result in something

like a 10-yeah deferral of the need

for the next dam. So I wouldn't be

rushing in to build a new dam if

there are alternatives. Now,

there are alternatives. Now, that's pretty important. The other thing

we need to look at and it comes

we need to look at and it comes back to the point I was making about the

true value of water, or any service.

We lose - well, I think we do - we

lose track until we haven't got

water the fact that it is a scarce

resource in Australia. It does

have a value. That scarcity does have a value. That scarcity does

have a value. The new dam for

have a value. The new dam for this city I was talking about was

estimated to cost about $is 35

million to serve a population of

120,000 people. Now, if -- $1 35

million) even with State stub zis

you're looking at a lone of $180

million and you have 8% of

repayments a year and you whack

repayments a year and you whack that on to a water fund all in one hit,

the first year, that's an enormous

increase in the water rate for the

residents of that local government.

So, is it reasonable to all of a

sudden at some point in the future

to whack that charge on those

people? Or is it better to start a

levy now and start building up some

capital which will help reduce that

pain later on? I think we have to

give some serious thought to the

give some serious thought to the way we look at public finance. David

Denham, another qi question. You

say in your talk that in

say in your talk that in Australia's major cities the relative

convenience of the private vehicle

is placing unsustainable demands on

the road system. Then you call for

$3 billion per year to be spent to

fix that. What do you have in mind

in fixing motor car congestion in

the major capital cities? Is it

the major capital cities? Is it more car parks, more freeways going

through, or cutting down cars and

spending it in public transport?

What do you have in mind there?

Could you expand on that a little,

please? I will just go back to the

$3 billion. That is an assessment

of the cost of congestion. So the

increase in operating costs of

vehicles sitting, waiting, the lost

productivity of people sitting in

queues of traffic. So the cost to

fix it I don't have a number on.

The sorts of things that are

typically - well, I will go back a

couple of steps. In the past,

people have said, "Get people to

people have said, "Get people to use public transport. That's the

panacea." But the reality is that

people still don't use public

transport in the numbers that are

necessary to reduce congestion

problems, so then you look for

alternatives. The alternatives are

the sorts of things that happen

quite often in the UK, certainly

happens in Singapore, where you

happens in Singapore, where you have congestion pricing. If you enter -

all cars in Singapore have a little

card reader on their windscreens

card reader on their windscreens and you put your debit card in there so

when you enter that con Jessed zone

at a particular time of the day,

at a particular time of the day, you automatically get docked some money,

so that will help congestion. That

will happen here, I'm sure, in due

course. Laurie Wilson: When we

course. Laurie Wilson: When we look at the national report card, what

at the national report card, what we get is an aggregate result. Some

States are doing better than others.

Water is of particular concern,

obviously, but if you look at the

report card, ports is one of those

two areas with electricity went

backwards and it actually went

backwards further, if you like, in

terms of its rating. What does

that mean? Does that represent the

fact that you have a problem in

Port Phillip Bay and Dalrymple Bay,

or does it reflect a problem right

around the country? Does it reflect

the fact that the quality of the

infrastructure hasn't gone

backwards, but kept pace less with

the growing demand? What does that

actually mean? I guess one of the

major influences is enormous

increase in demand from around the

world, and it probably caught the

port operators by surprise. I

port operators by surprise. I think there is, as I understand it, there

is another factor there that

is another factor there that private invest mebt in port facilities is a

bit like buying a unit of a plan

where the developer needs to sell -

know he has sold a few units, or a

fairly significant number of units

before he proceeds with the project.

I think that's the case, so that

the privately developed ports

facilities and so on, as I

understand it, have been developed

on the basis of an afard -- an

affordable need or one which will

give them a return on their

investment without catering too

much for the future. That's the

next stage in the process. That's

where we are at now, where that

demand has built up dramatically

and so there is a lot of work

and so there is a lot of work being done to increase port facilities.

done to increase port facilities. I see just recently that the Queensland Government has announced

that they're doing some community

investigations about a new rail

investigations about a new rail line from Goonyella out to Bowen to

create some more port facilities

there to keep up with demand.

Peter, can I ask you the last

question of the day, using the

prerogative of chair, I suppose:

Just to take you back to one point

in your speech which is probably

one of the keys to a lot of the

debate on just about every aspect

of the argument you've put forward

today - true cost of service. How

do you judge that? I mean, is

do you judge that? I mean, is there anybody in the country - in this

country at the moment - who can't

get a service if they don't have a

willingness to pay for it? And how

do you judge what a true real cost

is for things like

telecommunications, electricity,

water? I think there have been

quite a few people commenting on

this sort of issue in recent times.

I guess my comments came from

practical experience in the past.

practical experience in the past. I think there is enough expertise out

there if we got people together

with, particularly again, in that

national infrastructure council,

then we would have enough brains in

the country to be able to pull

together some information which

would enable us to put the true

would enable us to put the true cost on all of our services. In terms

on all of our services. In terms of whether people can afford it or not,

I think there would still be the

need for some community service

obligations because there are the

people in the lower end of the

remuneration scales and so on and

the socio-economic scale, who

the socio-economic scale, who simply can't afford to pay the full price,

and just as there are now, there

will have to be some arrangements

made to make sure they can

participate in those services.

Thank you very much. APPLAUSE.

Thank you very much, Peter. It is

a great pleasure to have you - to

be able to do this today. You

be able to do this today. You have been doing it around the country,

but to wind up here it is a very

valuable service to the whole

community and we thank you for it.

Thank you. APPLAUSE

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