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Transcript of joint press conference: City Beach Function Centre, Wollongong: 8 July 2009: visit to Wollongong; economic stimulus; Westpac consumer sentiment; Maldon-Dombarton rail link study; minimum wage decision.



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JOINT PRESS CONFERENCE WITH SHARON BIRD MP FEDERAL MEMBER FOR CUNNINGHAM AND

JENNIE GEORGE MP FEDERAL MEMBER FOR THROSBY

CITY BEACH FUNCTION CENTRE, WOLLONGONG

8 JULY 2009

SUBJECTS: Visit to Wollongong; Economic stimulus; Westpac consumer sentiment; Maldon-Dombarton rail link study; Minimum wage decision

TREASURER:

Well it's great to be here with my Parliamentary colleagues today, Jennie and Sharon. They've been saying to me that I've got to get down to the 'Gong and that's what I've done. This is a very important part of our country. A very important part of our national economy. It's one of the great engine rooms of the national economy and it's an area that I think is receiving very strong representation in our national capital from my two colleagues here and it's an area where both the Prime Minister and myself value the economic and social contribution to the life of the nation that is made by people in the Illawarra. So it's good to be here today with my colleagues because we've been going around the country talking about nation-building for recovery and, in particular, the investment that the Federal Government is making in local communities to support jobs and to support local business and today I want to hear from the business community about their priorities for the local area. It's about listening but it's also about explaining what the Federal Government is doing in local communities such as the Illawarra.

We're investing well over $300 million in infrastructure in this region. The modernisation of schools, the investments in the University, the investments in the TAFE. We are making a massive direct investment in infrastructure in this region as part of nation-building for recovery. But of course it's not just the modernisation of schools, it's also the investment and renovation of social housing. There's the GP Super Clinic at Shellharbour and, as I said before, the investments in the University and the TAFEs. But there is also the very important investment that's part of our economic stimulus that is supporting jobs and supporting business that's been made through the cash payments that have been made directly to families. The cash payments that have been made directly to pensioners. The cash payments that have been made directly to carers. The cash payments that have been made directly to our veterans. They have played a very important role in supporting jobs and in supporting business in this local community over the course of this year and through December last year which is why it's so pleasing to see from the Westpac Bank today their measure of consumer sentiment, or consumer confidence, in July. Because what this report from the Westpac Bank shows today about consumer confidence is that it has benefited considerably from the cash payments that the Government has given to the pensioners and the families of this country to support business and to support employment because if it wasn't for these payments, small business in particular wouldn't necessarily have the customers walking through their door. And what we can see measured here today through

Transcript of 08/07/2009

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this Westpac measure of consumer sentiment is the extent to which those cash payments have supported business and have supported employment.

If I could just read a little from this report today. They say the result for July is a stunning result. The largest two month increase in the index since the survey began in 1974. And if I could just paraphrase a few more lines from the report in terms of what has caused this increase in sentiment: The stand-out force must be the economic stimulus introduced by the Government to counter the global financial crisis. And they go on and say it has now been almost fully dispersed and has resulted in an instant boost to retail sales and supported this surge in confidence. They go on to say the success which the Government's stimulus package has achieved in boosting confidence will be a lesson to other

Governments.

So what it basically points to is just how important the cash payments have been to supporting employment and to supporting business and employment in local communities, particularly in communities like the Illawarra. And of course this is now backed up by the Government's investment in infrastructure. The Government's investment in the modernisation of schools. The Government's investment in social housing. The

Government's investment in terms of energy efficiency in local communities such as the Illawarra. As I said before, over $300 million in infrastructure, $280 odd million in cash payments to the local area and that's why I'm so pleased to be here today with our two local Members, because what I want to do today is to release the pre-feasibility study for the Maldon-Dombarton rail link. This is a very important feasibility study as you know. The commitment was made prior to the last election for a pre-feasibility study. That has been a worthwhile study and we're releasing the results today.

What the pre-feasibility study found is that such a line would support commercial opportunities and considerable employment in the port of Port Kembla and the region.

So what I'm doing today is announcing that we will commit an additional $3 million to undertake more detailed work to determine the firm costing and scope of the project. So we now go to the second stage. A cost benefit analysis of the proposal, following the pre-feasibility study which...have we got it there?

BIRD:

Yes.

TREASURER:

The pre-feasibility study. We can hold that up for all to see. So what this means is we're treating this proposal seriously and we will now do the further study that is required to determine whether such a project can be done or not. Now, the Government has made it

very clear that we are serious about pursuing a National Ports Strategy and certainly, if you look at the pre-feasibility study, you can see that this proposal has some merit and what we have to do now is to go through and scope the cost and the economic benefit to the region and to the nation and that is what the $3 million worth of funding is for and that's what I'm announcing here today to the local business community and, of course, to the wider community. Over to you.

JOURNALIST:

Now that you've taken the next step, do you think you will be able to get the State Government on side because up until now they haven't supported the project. They didn't put it on the list of infrastructure priority projects that were submitted to the Federal Government in the lead up to the Federal Budget?

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TREASURER:

Well certainly our commitment to this study means that we will be in position to submit to Infrastructure Australia a detailed analysis of the project. That's the next step and that's where it will go.

JOURNALIST:

Is there much difference between the pre-feasibility study and the next study and is the next study the final part?

TREASURER:

Well, I'll throw to my two local colleagues as well, but the pre-feasibility study was a smaller examination of whether the project had merit or not. I think everyone in the room is aware of the history of this project. So we had to determine whether it had merit, whether it had any potential to go to a full analysis of its costs and its benefits. The money was spent on the pre-feasibility study. We are now committing $3 million to a comprehensive evaluation of its merit so it can go through the proper national processes that we have through Infrastructure Australia and that's what we're doing.

JOURNALIST:

Does that effectively make it a Commonwealth project and does that then rule out the possibility of...

TREASURER:

It doesn't rule anything in and it doesn't rule anything out. Infrastructure Australia goes through and makes its evaluation of the worthiness and the merit of particular proposals. It doesn't necessarily supply funding, although it may, but it may also be in a position to provide further detail to those in the private sector or other levels of Government that are interested in supporting a project. But until you have a proper cost-benefit analysis nobody - be it at Government level or be it in the private sector - is going to be in a position to commit to it. That's why the announcement today is so significant because the resources are there now for a comprehensive cost-benefit analysis of the merit of the proposal.

JOURNALIST:

And how long will that take?

TREASURER:

18 months.

JOURNALIST:

And beyond that, with the results of that...

TREASURER:

I'm not going to go beyond the 18 months because the whole point of doing the study is to put us in a position where those decisions can be taken. You see, critical economic infrastructure takes a long time to plan and a long time to implement and it's important that we get the work done. This country has a huge infrastructure deficit. It's one this Government inherited. It's one this Government said it would deal with, and deal with it we

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are by establishing Infrastructure Australia and by coming to local communities such as this and saying we are prepared to look in depth at the nature of the problem and to see what solutions can be found over time. But there is nothing when it comes to complex critical economic infrastructure which can be done instantly overnight because, by its very nature, it requires comprehensive planning and evaluation. We're here acknowledging that. We don't think it's simple. We don't think it can be solved overnight, but we are going through the process that frankly should have been gone through years ago to determine whether this proposal has the merit. People in this community I know, because I've been here before, have very big ambitions for the port here and I think the port here certainly has strengths which need to be more fully exploited over time. And linking this proposal to the future of the port and considering that in total is a very important part of what we're on about. Would you like to say something Sharon?

BIRD:

If I can just add to what Wayne's saying. Clearly I think it's really important and Jennie and I want to welcome our Government's commitment of this $3 million. It is very significant for us. The arguments that we've put by getting all the leadership of the region together

around infrastructure were strategic, they were about the development of the port. The Government is committed to a National Port Strategy. This will be considered within that context as Wayne said and so I think it's really important that we are very clear with the community that the pre-feasibility study's recommendation was that it's worth going to the

next level of study and I think it's tremendous that the Government has committed the $3 million to take us to that next level. And we have to, I think as a community, respect the fact that when we're talking about a significant amount of money - the pre-feasibility indicates at least $550 million, at least, which is significantly more than we had originally thought - that that sort of process has to be supported by full feasibility studies. So I know

people will get frustrated and they'll write to Jennie and I and tell us that, but we're more than comfortable to make it clear that when you're asking for that sort of money from the Government and the Treasurer, that you actually have to have those full feasibilities in place and I think it's great that we've got that commitment to go to that stage.

GEORGE:

I think Sharon's covered it all.

JOURNALIST:

Sharon, you've been lobbying for the line for a while. Can you give the community an idea, in your mind, you know, how long before we see trains running on that line if everything goes to plan? I mean, is it a decade? Is it longer than that?

BIRD:

Look, I'll be really honest with you Brett, this report says the fact that it's worth having a good look at - that strategically there's potential there but it is much more expensive than what we had thought. So it's good to have this and to take it to the next stage. I think the really important thing for us is to have a conversation with the Government about how we fit into the National Port Strategy and we have to put a solid argument about the regional development and how we can be part of that strategy and so the full feasibility study has got to look at all the engineering details, all the environmental detail. So I would be, I think, doing the wrong thing by the community to have a guess at a time frame when I haven't got the information that we need to get about the engineering processes and what work needs to be done and. And as you would appreciate, I've tried to always be upfront and honest and not mislead people on timeframes so I'd rather not make a guess at that. I think we've got the feasibility study. That will give us the information we need.

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JOURNALIST:

It's been around for a long while now, how do you see the matter of urgency on getting this going?

BIRD:

I might take that question because I've been around with it for a long while. I have to say to you I was explaining to the Treasurer why I had a few goes at Bruce Baird when we were in the Federal Parliament together, because he was the state minister who stopped the construction halfway through at the time. I think it is important for this region to be part of the National Port Strategy. I think we have to position ourselves effectively because I think

that's a significant part of driving our growth and jobs into the future. The Federal Government has given us the opportunity to be part of that conversation and I think that is critically important for us as a region and Jennie and I are absolutely determined to make sure that we stay in that conversation and that we progress through it. So it's great to have the support of the Government in providing this $3 million today to take it to the next stage.

JOURNALIST:

Can I just ask a question about the Fair Pay Commission's decision? Just one question on that? We've had this momentous decision yesterday. The unions wanted a much higher increase. Would you support the unions next time around in pushing for a higher wage increase for the lowest paid in our community?

TREASURER:

Well the lowest paid in our community have been at the very top of this Government's priorities from day one. And in fact if you look at the tax cuts delivered in our first Budget, if you look at the economic stimulus payments that I was talking about before - $1,000 to families with children eligible for Family Tax Benefit Part A, the payments to pensioners, both singles and couples, the payments to carers and so on and the tax bonus delivered this yea - there has been a very considerable economic benefit flow to low and middle income earners in this community under the Rudd Labor Government. So they have been a very high priority for us. We made our submission to the Fair Pay Commission. In that submission we made the point that we would have liked to have seen an increase. We left the quantum up to the Commission. We are disappointed with the outcome, but the Commission is independent of the Government. What we will continue to do as a Government is to make sure that those on low and middle incomes get reward for effort and do get a fair go generally in our economic system and we will continue to do that.

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