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Tuesday, 1 May 1984
Page: 1392


Senator WALSH (Minister for Resources and Energy)(5.28) —I move:

That the Bills be now read a second time.

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

Leave granted.

The speeches read as follows-

AUSTRALIAN BICENTENNIAL ROAD DEVELOPMENT TRUST FUND AMENDMENT BILL 1984

The purpose of this Bill is to amend certain of the arrangements under which financial assistance is made available to the States and Northern Territory under the Australian Bicentennial Road Development Trust Fund Act 1982.

I should point out to the Senate that this Government when in Opposition supported the objectives of the program when the Act was introduced by our predecessors. Because of the declining level of Commonwealth expenditure on roads the need for such an initiative was obvious. However, we were concerned about some of the provisions of the legislation, particularly the compulsory tendering requirement, and during last year's election campaign we undertook to review it.

Upon coming to Government we have accordingly reviewed a number of provisions of the ABRD Trust Fund Act, in addition to those relating to the calling of tenders.

In giving this undertaking this Government was concerned to have provisions that were reasonable to all parties. Consistent with our approach to conciliation and consultation detailed discussions were held with the States, local government, industry and relevant unions. This process identified three areas where changes to the provisions of the legislation were necessary. The first, as identified earlier, related to the provisions which required that all construction work on national, urban arterial and rural arterial roads must go to tender.

The second related to the provisions requiring the States to maintain in real terms their expenditure on roads for the duration of the ABRD program. We do not disagree with the broad objective. We were concerned, however, that there was no recognition of circumstances where a State had substantially exceeded its real terms maintenance of expenditure, possibly for a number of years, but that the excess could not be taken into account in subsequent years should the State fall behind the necessary rate of expenditure.

Thirdly, a number of States pointed out that, where a State wished to take the option of directing part of its urban arterial roads allocation to urban public transport projects, additional conditions were imposed without the State receiving one additional cent of funding. Having regard to the much greater rates of investment that most States are making in urban public transport than the funds that would be available under the ABRD program, this Government is satisfied that the requirement that the State also maintain its urban public transport real terms expenditure is unreasonable.

The amendments to the ABRD Trust Fund Act therefore make the changes which this Government considers are desirable in order to improve the operation of the ABRD program.

Turning to the provisions of the legislation, firstly the Bill varies the requirement that tenders must be called by a State for all construction works associated with national and arterial road projects. Under the legislation developed by our predecessors this was an absolute requirement with no provision whatsoever for it to be waived.

While this Government recognises the merits of the general principle of calling tenders for road construction, there is a need for some flexibility to cover situations where the process of calling tenders is either impractical or not cost effective.

The Bill therefore allows the Minister to approve an exemption from the requirement to call tenders for specific works where a State can demonstrate to the Minister's satisfaction that:

there is an emergency requirement for the works to be performed, or

the works are of such a minor nature that calling tenders would involve undue additional cost, or

it is not practical to prepare adequate tender specifications for the works, or

the works are of such a kind that competitive tenders are unlikely to be received, or

the works involve adjustments to utility services which would normally be undertaken by a government department, a government authority or a corporation not primarily responsible for the construction of roads, or

the performance of the work under contract would cause unavoidable retrenchment or inefficiency in the deployment of a substantial number of State or local government road construction employees.

This last provision also requires the State or local government to demonstrate that it has taken all practicable action to avoid this problem.

The Bill provides for this amendment to come into effect from 12 February 1984, the date on which the Government's intention to revise these provisions was announced. This will enable to States, upon enactment of this legislation, to seek exemption in respect of any works which have been commenced subsequent to that date.

I must emphasise that each of these provisions for exemption has been carefully considered. They have been included as there are obvious circumstances where time or costs make the tendering process inappropriate. It is the Government's intention that the ministerial discretion will be used very infrequently, and then only after the most rigorous and detailed examination of all the factors involved.

The second area of amendment relates to the requirement that States maintain their own roads expenditure in real terms during the life of the ABRD program.

The Act currently provides that, where a State fails to maintain its roads expenditure in real terms in a given year, it is required to make up the shortfall in the following year. Should it fail to do this then its allocation under the ABRD program may be reduced.

However, there is no provision to allow a State which exceeds the real terms requirement in a year to carry forward that excess as a credit against a later year.

While the Government firmly intends that States should be required to maintain their own expenditure effort, it considers that the current legislative provisions are, from the States' standpoint, both inconsistent and inequitable.

Accordingly, the Bill provides that excess expenditure by a State in any year shall be taken into account in determining the level of expenditure by that State in a subsequent year. This provision is comparable with arrangements which have previously applied under Federal roads assistance legislation.

The third area of amendment relates to the requirement that, where a State proposes that part of its urban road allocation be directed to urban public transport capital works projects, it must maintain in real terms its own capital expenditure on urban public transport.

As it stands, a State which decides to apply part of its ABRD entitlement to urban public transport projects receives no more in total assistance than if it were to direct all of its funds to road projects. On the other hand, the State becomes liable to a requirement to maintain a specified level of State expenditure on both roads and urban public transport in each year of the program .

This Government's transport policy is to assist the States to improve and maintain urban public transport systems. It is clearly inconsistent with this objective to maintain an arrangement which disadvantages States which wish to apply part of their ABRD funds to worthwhile urban public transport improvements .

The Bill therefore removes the requirement that State urban public transport expenditure be maintained in real terms where this option is taken up.

These amendments, developed in close consultation with all the parties concerned, further reinforce the Government's commitment to improve the effectiveness of Australia's road system. This commitment is nowhere more clearly evident than in the increase of 45 per cent to $1,233m in our allocation to the States for roads this year. I commend the Bill to the Senate.

ROAD GRANTS AMENDMENT BILL

The purpose of this Bill is to amend section 24 of the Roads Grants Act 1981, under which provision of financial assistance to a State for a national road construction project is conditional upon the State inviting tenders for all works associated with the project.

The amendments for which this Bill provides are fully consistent with the corresponding amendments for which provision is made in the Australian Bicentennial Road Development Trust Fund Amendment Bill.

My previous remarks in relation to the tendering aspects of the Australian Bicentennial Road Development Trust Fund Amendment Bill apply equally to this Bill. I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.