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Parliament House, Canberra: joint press conference [roads funding, CJC inquiry, Governments welfare response]



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27 November 2000

TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP JOINT PRESS CONFERENCE WITH THE DEPUTY PRIME MINISTER, THE HON. JOHN ANDERSON MP,

PARLIAMENT HOUSE, CANBERRA

Subjects: Roads funding; CJC inquiry; Government�s welfare response

E&OE……………………………………………………………………………………

PRIME MINISTER:

It�s a beautiful morning. Welcome. Deputy Prime Minister, Senator Macdonald, ladies and gentlemen, I�m delighted to announce on behalf of the Government the commitment over a four year period of an additional $1.6 billion for use exclusively on road funding construction or maintenance. This amount will be additional to money currently allocated in the Budget for the construction of or maintenance of local roads, spending on national highways or spending on roads of national importance. The $1.6 billion additional spending commitment is divided into two parts. There is an allocation of $1.2 billion for local road purposes. This money will be paid direct to local councils and we will seek passage through the Parliament before Christmas of a special appropriation bill in relation to that funding. The remaining $400 million will be used for expenditure on national highway projects, which are of course the exclusive responsibility of the Commonwealth and roads of national importance, which are normally shared in partnership with the States. Once again that money will be over and above what is already within Budget funding for roads of national importance and national highway programs.

We have calculated that of the $1.2 billion, approximately $850 million of that will go to councils in rural and regional areas of Australia with the remaining $350 million going to councils in what could be described as the greater metropolitan areas of Australia which are essentially the councils of the six State capitals, including the fringe councils, including for example in the case of the city of Sydney, the Shire of Baulkham Hills. So you�ve got a split of $350 million to greater metropolitan and $850 to rural and regional. And that is a very fair balance.

I should also point out to you that the allocation of money within each State has been determined following the formula applied by State Grants Commissions, established years ago under Labor Governments. In other words, the money will be distributed within each State according to Labor formulae. Therefore any suggestion that this is a porkbarrelling exercise to benefit marginal Coalition seat holders in rural and regional Australia is completely false. Let me illustrate. Councils within the division of Brand, held by the Leader of the Opposition, will receive in total, Councils wholly or partly within Brand let me stress, Councils wholly or partly within Brand will receive a total of $4.7 million under this allocation. So I assume that if he is to be consistent, the Leader of the Opposition will encourage those councils who

receive some of that money to return the pork immediately to the Federal Government. It has been done on a distribution basis established under arrangements that were put in place by the former government.

This is a very good announcement for economic activity, economic growth and job generation in regional Australia. We want the money to go direct to local Councils so that it can be distributed and work commence immediately. There�s no reason, if the legislation is passed, why some of the money can�t begin flowing in January and I�d ask the Labor Party and the Australian Democrats to facilitate the rapid passage of the legislation through the Parliament. I �ve said before that this package has been made possible by our stronger Budget position. The Government believes that spending additional money on roads is a very sensible long-term investment in the future of this country. I have always believed, and the Government has always believed, in the provision of additional money for strengthening and expanding the infrastructure of this country. Local road funding is very important.

This package will increase, in one hit, by 75% - this is a 75% boost in local road funding coming from the Commonwealth Government. It will be a condition of the payment of the money to local councils that they maintain their current level of funding for local roads. I will also today write to each of the State Premiers and Chief Ministers, seeking an assurance from them that they will not take advantage of this additional money to reduce their contribution to road funding within local areas within their respective states. This represents for every last dollar of the $1.6 billion, an additional spend by the Federal Government. We don�t want any of that additional spend reduced by any cost shifting exercises by State Governments and that is why we will make every effort to hold State governments to the projected levels of expenditure on roads contained in their forward estimates. I would be surprised if the State Governments were reluctant to agree to that because they have frequently said to me how important expenditure on roads is.

This is a great boost, a great boost to the road network of Australia. It is not trivial, unnecessary work. It is not a boondoggle. It is a fair, decent boost to the tune of 75% of the Commonwealth�s current provision on roads and in addition to that we�re putting aside another $400 million. Mr Anderson, who of course has been responsible for so much of the work in this area, Mr Anderson will be making announcements in relation to these matters in the weeks and months ahead. But this is great news for all councils in Australia, it�s great news for motorists and it�s great news for road construction for the industry and for the quality of local roads throughout our vast nation.

JOURNALIST:

[inaudible] how many new jobs it might create?

PRIME MINISTER:

Louise, I don�t have a figure. Obviously it will create a lot of new jobs but I don�t have a figure on that.

JOURNALIST:

Prime Minister, do you think before that . . . .

DEPUTY PRIME MINISTER:

[inaudible] actually I mean look just about everything that we value add and about 2.3 million jobs in this country still depend upon agriculture and mining. Just about everything we export starts on a local government road. And the fact is that they are like the capillary to the body if you like, they are incredibly important to the health of the body corporate and they are in a very bad state, many of them built in the 1950s and 60s with various Commonwealth grants designed to last twenty to thirty years and now beyond the capacity of local councils to properly maintain and what-have-you.

There will be jobs created during the construction phase.   There is no doubt that it helps economic activity � better transport networks always do as long as they�re properly

planned.   And there�s no doubt too that you, so you get jobs, you get better outcomes in economic terms. It�s better particularly for rural families who don�t have the option of jumping in a taxi or the local railway station or the bus or what-have-you, and it�s just not there. So whether it�s getting the kids to school � there are parts of my electorate where 60 points of rain means your kids don�t go to school that week. That�s not something that applies in urban areas so it�s jobs, it�s family amenity, it�s economic outcomes and it�s certainly not a boondoggle. Which is real pity for the ALP, I mean they might like to have a look at why for example a Coalition seat in Queensland, Blair gets about $16 million but Capricornia, $22 million. It is formula based, it�s based on population and need and I have no doubt Prime Minister that we will of course if it is still a boondoggle see the Member for Capricornia offering to hand it back.

PRIME MINISTER:

Followed quickly by the Member for Brand.

JOURNALIST:

Mr Anderson do you think this will be sufficient to overcome the considerable concern particularly in the bush about the high price of fuel?

DEPUTY PRIME MINISTER:

Let me make a couple of points about that. We�re all concerned about high fuel prices Jim, and I�ve said that many times. However roads will be there for a very long time, that�s point one. Point two, this is a substantial investment in jobs and economic efficiency. Point three, two, but as a subset of that, very important to understand that better roads create jobs, they create better economic outcomes, but they also save wear and tear and petrol which are considerable costs for country motorists.

JOURNALIST:

Mr Howard would you like to see the Joint Standing Committee on Electoral Matters have a look at allegations that surfaced in Queensland this morning that money changed hand as part of a preference deal in the seat of Lilley between the Democrats and Labor?

PRIME MINISTER:

Well I�ve only just found out about those allegations. Can I take the opportunity of saying firstly though that because it�s been the subject of speculation in the media this morning that the Government will respect the suppression order of the Criminal Justice Commission in Queensland. Now separately from that I understand some allegations have been made concerning the Member for Lilley and the Australian Democrats candidate.   They are to say the least, very serious allegations. No doubt Mr Beazley will be examining him because they concern the behaviour of one of his closest confidantes, one of his frontbenchers. As to whether these allegations should be investigated by the Joint Parliamentary Committee is of course fundamentally a matter for that committee. I haven�t given any thought to that, I�ve only just been shown a transcript of the interviews that were given and I think questions have got to be asked by both Senator Lees and Mr Beazley of the people in their respective parties that have been involved. But they, on the face of it are very serious allegations indeed.

JOURNALIST:

What would be your position Prime Minister if you were to discover that members of your frontbench or members of the hierarchy of the Liberal Party had been involved in something similar to what�s alleged about . . .

PRIME MINISTER:

Well I am responsible directly for people on my frontbench. It�s a hypothetical question Jim. I am not aware of anybody on my frontbench who�s behaved in that manner.

JOURNALIST:

Mr Howard this is, the roads announcement is the first instalment in the transport package, can you give some indication as to when we will get the remaining instalments if you like, particularly an announcement on Speedrail. Would you expect that to happen before Christmas?

PRIME MINISTER:

Well I did say that I hope to be in a position to say something before Christmas about the airport situation in Sydney. Now Mr Anderson and I continue to discuss that. We can�t at this stage go further than to say we may have something general to say about what is occurring in that area before Christmas, but there are a number of discussions that are under way at the present time. Mr Anderson in the fullness of time as a matter of his convenience will be, and having regard to the situation of other parties will be saying something about things such as the Western Sydney Orbital. I should make the point that there is money in the Budget for that, so it�s in no way related to the $1.6 billion announcement that I�ve made today.

JOURNALIST:

Prime Minister, Mr Beazley said this morning that if any of his frontbenchers were called, were called as witnesses before the Shepherdson Inquiry he would stand them aside. What�s your reaction to that?

PRIME MINISTER:

Well I haven�t seen exactly what Mr Beazley has said, I�ve been in Cabinet talking about the flood devastation in New South Wales and other matters. Look in the end Mr Beazley is accountable to the Australian public for the way in which he deals with allegations made against people on his frontbench. And he has responsibilities. I think the greatest criticism that can be made of Mr Beazley is his lack of courage in relation to organisational matters. And my understanding is that he rolled over on the question of factional reform when this matter came before the National Executive of the Labor Party only a couple of months ago having made a big noise about the fact that he was going to do something about it. I�m also fascinated by the allegations made by Mr Maclean, the former State President of the Labor Party and the former head of the Telecom Union and I think he was a Federal Vice President of the ALP, and he claims that Federal Labor knew about these things in the early 1990s. Now that, if that is true and I don�t know whether it�s true or not but if it�s true, it puts a spotlight on not only the then Leader of the Australian Labor Party and then prime minister, but also on the deputy prime minister and also if my memory serves me correctly the then National Secretary of the Australian Labor Party who is now being touted as the man to clean it all up. I think Mr Hogg was National Secretary until 1993.

JOURNALIST:

Mr Hogg . . .

PRIME MINISTER:

Pardon?

JOURNALIST:

Mr Hogg should not be [inaudible] then to [inaudible]?

PRIME MINISTER:

Well I�m just, I�m dealing not in colour phrases, I�m just dealing in, with the allegations I hope in a calm way, in a fast changing, fast moving, fast unfolding drama. I mean you�ve, Maclean is no lightweight. He was a very significant figure in the Labor Party because of his union position and what he�s saying is that they all knew about it, federally. Federal Labor knew about it. Now maybe Federal Labor will say it didn�t, but I mean it�s very strange because nobody seems to have known anything about even though they occupied very senior positions.

JOURNALIST:

Prime Minister in light of these latest allegations this morning in relation to the ALP and Lilley, is it the case that neither of the Coalition parties, or specifically the Liberal Party has ever funded efforts by third parties say for how-to-vote cards or something like that?

PRIME MINISTER:

Jim I am not aware of anything done by any of my parliamentary colleagues similar to what has been alleged this morning.

JOURNALIST:

What about organisational colleagues?

PRIME MINISTER:

Well I�ve not even had an opportunity of inquiring because I�ve come straight from Cabinet.

JOURNALIST:

Mr Howard can you tell us something of what Cabinet�s decided on flood relief and also whether it�s settled yet the timing of the release of the welfare comment?

PRIME MINISTER:

Michelle we�ve had some discussion about the issue of flood relief and I can say this that having toured the area with my colleague the Deputy Prime Minister we are going to respond in a sympathetic way, a very sympathetic way. I am not in a position this morning to make an announcement, but I hope to be able to make an announcement about the measure of that response in the next day or two.

JOURNALIST:

And welfare? The timing of the welfare release?

PRIME MINISTER:

We�ve, Cabinet will be meeting again.

JOURNALIST:

On the road package, can you tell as at what point in the decision-making process the . . .

PRIME MINISTER:

I am struggling to hear you, not because . . .

JOURNALIST:

Can you tell us at what point in the decision-making process local federal MPs will have a say in what roads are selected for funding?

PRIME MINISTER:

Well I think the expert can answer that.

DEPUTY PRIME MINISTER:

You�ve misunderstood how we�ve done it, local governments will make that determination. They get the grants, it has to be spent on roads. You know it won�t be subject to those sorts of determinations.

PRIME MINISTER:

Were you talking about the $400 million?

JOURNALIST:

No the [inaudible].

PRIME MINISTER:

Oh I am sorry I thought you were saying $400 million.

DEPUTY PRIME MINISTER:

I am sorry to have to disappoint the ALP who have more positions than you know what on this. I mean they�ve been like a bunch of ball bearings thrown on the floor. You�ve had Martin Ferguson out there saying we absolutely must, the Government must spend some money on rural and regional infrastructure. And then when we say we do, we discover on day one it�s a boondoggle, it�s trivial and unnecessary. But day two when everybody�s sort of saying shock horror, it�s not trivial and unnecessary we hear that perhaps it�s a porkbarrel. Then we see Martin Ferguson saying oh we�d better wait and see first whether it is a porkbarrel and then we have Simon Crean sitting on the fence which is a pretty dangerous place to be especially if it�s a barbed wire fence. They�ve been absolutely hopeless on this and I hope now they�ll recognise that there�s nowhere for them to go because it is not a boondoggle, it is not a porkbarrel, there�s no room for sort of any claims of undue influence or manipulation. We are going to recognise that local government knows where the priorities are.

JOURNALIST:

What is though the form of accountability for the councils when you give them this money?

DEPUTY PRIME MINISTER:

Well they have to spend it on local roads and they, you know . . .

JOURNALIST:

Yes but to whom are they accountable and in terms of it would seem that they are not going to get everything that they want, as much money as they could to fix every road in their shire. What is the procedure then for prioritising?

DEPUTY PRIME MINISTER:

Well apart from anything else, the vote. It�s a political system for them as well. They�re subject to their electors in the end.

PRIME MINISTER:

But they have to account, they have satisfy the Federal Treasury they�ve spent the money on local roads.

DEPUTY PRIME MINISTER:

But we make that absolutely plain, it�s tied, it has to go to local roads.

PRIME MINISTER:

But as to whether you spend it on the Longueville road or the Epping Highway, or spend it on something else, that�s a matter for the local council to decide. I mean you know, whether the Rockingham Shire, Rockingham City Council, which road in&.dilapidated road in the Brand electorate gets this money. I mean I assume that the Rockingham City Council will want it. Perhaps they will, you know, send it back.

JOURNALIST:

Mr Howard, to borrow an analogy from the ABC�s television series Sea Change, how are you going to avoid getting a Bob Jelly who wants to build a bridge somewhere, get himself reelected [inaudible] a local developer? What sort of accountability do you have to stop that kind of unnecessary building of roads and&?

PRIME MINISTER:

Well I think the way in which, interestingly enough if you look at the way the allocations have been made by the State Grant Commission they are quite heavily geared to the areas where you would expect road maintenance to make a greater core. If you look at the purely, if you look at the divisions and you look at the purely urban councils they didn�t get&.the purely urban councils, the ones that are well settled and they�ve well built road areas, they don�t get as much as the councils as you move out of the city and that is how it should be. And even though within well settled council areas, there is always need for road maintenance. And I mean I�m quite certain that every council in the major cities will be happy to have a few hundred thousand dollars a year, in some cases it�s not even a few. It may be less than two hundred, perhaps even in some cases less than a hundred. They would be happy to have the money for road maintenance. So I don�t think, I don�t think Karen, the possibility of that will arise.

DEPUTY PRIME MINISTER:

Can I make one very important point for the benefit of people in the flood areas, those roads are put back together automatically under the natural disaster relief arrangements. I�ve been asked many times as I�ve travelled around Ó if you�re going to do something on roads how do we know it�s not just going to go to trying to patch up roads that have been destroyed by the floods. That is done under the natural disaster relief arrangements and in New South Wales the government there spends $56 million prior to the Commonwealth chipping in on a dollar for dollar basis, and whence it reaches $75 million we come in on an even more generous formula. New South Wales has got to $30 million before these floods so naturally in relation to the floods it�s worth noting that if they spend $26 million after that we pick up the tab.

JOURNALIST:

But I�m still not clear on who is going to check that these projects&..

PRIME MINISTER:

Well we�d check whether they�ve spent on money on, whether they�ve properly spent the money on local roads. The question of whether the need is there for a particular expenditure is something, as it should be, between the local council and its electors, just as with the spending decisions we make are ultimately judged by our electors. We don�t&.I mean before we make a decision to spend $100 million we don�t go off to some independent body and say will you sanction this expenditure. I mean you might as well close democracy down.

JOURNALIST:

But you�ve already allocated&.

PRIME MINISTER:

No. But in order to get the bill paid they�ve got to satisfy us that the work�s been done.

JOURNALIST:

Could you give us a State by State breakdown of that $1.2 billion.

DEPUTY PRIME MINISTER:

It�ll soon be available. I haven�t got the bit of paper here.

PRIME MINISTER:

State by State?

DEPUTY PRIME MINISTER:

Have you got it there?

PRIME MINISTER:

Yeah. It�s $340 million for New South Wales; $250 million to Victoria; $250 million for Queensland; $180 million for Western Australia; $100 million for South Australia; $40

million for Tasmania, $20 million for the Northern Territory; and $20 million for the Australian Capital Territory.

JOURNALIST:

Mr Howard, you said before you�d like the Premiers in terms of the States maintaining their current support for road funding. What measures will you put in place to ensure that happens? Would you for instance leave open the possibility of reducing GST top up payments for states if they reduced their road spending in the wake&.

PRIME MINISTER:

Well in the spirit of cooperative federalism Steve I don�t start talking about sanctions of that kind unless I get evidence of perfidy.

DEPUTY PRIME MINISTER:

Can I just make a comment on that, there are a couple of states actually that could look very seriously at whether they could make a greater contribution to local roads there really are. We �ll have a look at the states that don�t put very much, or in fact in some cases put nothing in. Now in the case of New South Wales they�ve been, to be fair to them, putting in a reasonable amount but they�ve been making noises about putting more in so there�s a challenge. Let�s see if they can do more and the same applies to Queensland.

PRIME MINISTER:

One of the things I�ll be saying in my letter to the Premiers is to invite them to match what the federal government has done in relation to local roads. It�s Christmas, they should be generous too.

JOURNALIST:

Doesn�t $20 million seem like a lot for the ACT?

PRIME MINISTER:

Well accept that it�s the entire area and there�s some road works in the entire area that need to be attended to. It�s not just for the Canberra City. There�s quite a number of local roads in the ACT that could do with some additional expenditure.

JOURNALIST:

Mr Howard, have you denied your federal backbenchers the opportunity to convince local communities that this road funding is actually compensation for high petrol prices?

PRIME MINISTER:

Have I denied it to them?

JOURNALIST:

[inaudible] denied by allowing the councils&

PRIME MINISTER:

I haven�t turned my mind at whether this is a denial or an encouragement. What I�ve done Dennis is to support along with my colleague the Deputy Prime Minister a 75% increase in local roads funding. We�re increasing essentially an existing program by 75%. I mean let�s see it in that context. The federal government already provides $406 million a year to councils throughout Australia for local roads. Now we�re increasing that aggregate amount by 75%. I don�t know whether we�re denying, or exhorting or doing anything. We�ve made a quality decision that our colleagues support very strongly and a fair decision. I mean one of the great things to come out of this when you look at the figures is there�s all this talk about it being some kind of political pork barrelling exercise for marginal National and Liberal Party seat holders in regional Australia is completely and utterly wrong. There�s no whiteboard in this.

JOURNALIST:

[inaudible] &

DEPUTY PRIME MINISTER:

&.put in place a package to assist the cane industry which more than anything else has been a victim, not just of unfortunate seasonal circumstances but of the extraordinarily unhappy trading and protectionist arrangements that the Europeans and the Americans use. But we will be taking careful stock of all areas that are affected, not just north west New South Wales, although plainly that�s where the epicentre has been. Let me make a couple of very brief comments about it, I really appreciate the fact that there�s been a lot of focus on it and the expressions of goodwill of the Australian community have been very notable. Can I make it clear that people understand that floods we�ve had before, these are no worse for most people than they were two years ago in 1998. It is the amount of rain and the time over which it has fallen and the time at which it has fallen that has done the extraordinary economic damage that effectively has gutted the foundation stones of the economy of the regions. It�s not diversified. It�s actually narrowed in recent years. There have been industries that have gone from the northwest. Agriculture is the base and by far the largest plank of that of course is cropping and that�s how this thing has to be really understood. It�s the decimation of the economic base of the region. So we�ll be working very very quickly. I look forward to reassuring people not only in terms of the fact that we are going to act that is to the nature of that. Can I say to you it is an absolutely unique experience so far as I�m aware for a federal member to actually face, not just a problem or a downturn or whatever in general terms across an electorate but the huge devastation virtually right across it � and if you have a look at a map it�s been overwhelmingly the electorate of Gwydir that has copped it over the last three years -culminating now in this appalling situation that we now face.

JOURNALIST:

Mr Anderson, you�ve suffered a fair bit of personal loss on your farm, are you going to be eligible yourself for disaster relief or any special assistance?

DEPUTY PRIME MINISTER:

The answer to that is no and I think it would be inappropriate for me to seek to access it even if technically I was.

PRIME MINISTER:

I�ll say this for the record. Mr Anderson declared his interest in this matter when the Cabinet discussions started and made it very plain, as is the mark of the man, that he didn�t intend even if he were entitled to have any access to any assistance.

DEPUTY PRIME MINISTER:

And I do ask you to remember, not for myself but I do employ people and their jobs are dependent upon that place. I am an employer in my own electorate.

JOURNALIST:

Mr Anderson, Scoresby freeway. When will we learn of the Federal intentions over that freeway?

DEPUTY PRIME MINISTER:

Can I say there�s quite a bit of work still to do there, to be frank. The Victorian Government has recently started to say that they�ve prioritised it but up until now they�ve not been able to give us a clear idea of what it is that they want, how they�re going to proceed with the corridor and how they intend to progress it. But I must say in relation to the members there, a number of them � Phil Barresi comes to mind, Bruce Bilson, there are others who have repeatedly pointed to the need to be ready to move in that area and I�m sensitive to it, as I am to a number

of other transport or road transport infrastructure issues around the country. We�re not going to rush it. We�ll go through proper and due process and we�ll be looking for quality outcomes in terms of transport reform.

PRIME MINISTER:

I�ll take one last question from Geof Parry because he�s going to ask me about the councils in the division of Brand, isn�t he?

JOURNALIST:

Well actually, sort of. In respect of the funding formula, Labor�s funding formula, was that formula strictly applied to every council or was there some flexibility in that application.

PRIME MINISTER:

No, my understanding was � and I�m relying on advice I�ve been given - my understanding is that within the amount of money that was decided should go to each State, then that was allocated to local councils in accordance with a fixed formula and we have followed that same formula.

JOURNALIST:

Inaudible.

PRIME MINISTER:

State Grants Commission.

JOURNALIST:

So if we looked at say Brand, which you raised, was the State grant hocked up with a bit more pork to &

DEPUTY PRIME MINISTER:

No. I�m sorry. Please don�t try and run the ALP�s lines on this. This is fair. You won�t be able to subject it to any scrutiny. Let me just make a couple of points about the FAGs grants. They are very old and there�s just one point that I do want to make up front. To some extent their background is lost in history and one thing that did emerge to us � and I can say this because it �s to the disadvantage of my home State if you like. South Australia had been missing out by any definition when you look at population and road distance it was necessary to make a slight adjustment on a State wide basis to ensure that South Australia was not done in the eye because they had been done in the eye and the Minister responsible for local Government had in fact had their FAG grant arrangements under review anyway but we felt that it was only fair to recognise the legitimate claims made by the Premier and by the Minister for Roads in South Australia and that is reflected in the figures and I don�t think anybody who looked at what they would have got otherwise, if we�d stuck to the old formula, would argue with that. We really have sought to be absolutely fair and above board here so that nobody could make any false claims about what is something that is really needed in the national interest.

JOURNALIST:

Have their been any projects identified under the extra $400 million to highways.

DEPUTY PRIME MINISTER:

There is a significant list of projects that we have on our agenda. This will top up if you like our forward estimates that gives us greater flexibility to start to address some of those emerging needs. But each State has one. Some have more than one and depending on who you talk about some have quite a few. But we�ll work that through in terms of the priorities for transport reform.

PRIME MINISTER:

And I may well see some of you later this evening. Thank you.

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