Legislative Council Tuesday 15 August 2017

Ms  FORREST (Murchison ) - Mr Deputy President, I move -

That the Legislative Council -

(1)     Notes the economic benefit of investment in infrastructure, particularly long term intergenerational infrastructure;

(2)     Notes infrastructure funding is often influenced by election cycles; and 

(3)     Calls on both Houses to consider the value of establishing a cross party Infrastructure Funding Review Panel, comprising a representative from each party and independent member to review current infrastructure funding, decision making and assessment processes and options.

Mr Deputy President, some members may wonder what has driven my decision to bring forward this motion.

It has been apparent for some time that a lack of certainty regarding infrastructure spending and inefficient delivery of infrastructure such as the Royal Hobart Hospital has led to great frustration, a lack of confidence in the Government and the state to deliver on major projects.

It seems to me that this is holding the state back, with some private investors walking away and many opportunities lost.  I accept we have had some great private investment in the state   MONA is a shining example - but we hear many more stories of opportunities lost.  I am sure that there are many more we do not even hear about.

It is also having a negative effect on our capacity to attract and retain medical staff, for example, so everyone loses in this case.  We are losing too many golden opportunities in this state.

We only need to look at King Island, a part of Tasmania which potentially could be on the cusp of enormous growth in tourism as well as enhanced agricultural production and activity if it had a reliable and suitable shipping service that enabled the islanders to fully participate in the economic growth just begging to explode there.  This includes with mainland Australia as well as with Tasmania.

It is an undeniable fact that investment in infrastructure brings economic benefit.  Investment in long-term intergenerational infrastructure brings social and economic benefits to all Tasmanians as well as to the regions and town within Tasmania where infrastructure investment is made. 

Whether it be a major upgrade to our road or rail networks, our schools, hospitals, public housing or ports that as an island state we rely on, our public open spaces and sporting facilities, water and sewerage infrastructure or any others I could mention, the benefit is clear in terms of employment, community benefit and positive impacts on health and wellbeing as well as economic growth.

Safer roads, for example, lead to fewer serious crashes and fewer serious injuries and deaths.  That is a huge saving, not only in monetary terms, but also in human terms.  Investment in roads to improve or facilitate access to areas tourists wish to visit encourages and supports private sector investment, increases in tourism and so on, with flow-on benefits including growth and employment.

Infrastructure investment in our transport infrastructure also encourages pride and investment in business and industry.  Bike pathways, for example, encourage and promote health and wellbeing.

Investment in our schools and hospitals provides for more efficient working and learning spaces, creating long term intergenerational assets.  When the costs are considered over the life of the investment, the return on the investment is significant.  These benefits and all these other benefits and infrastructure last for many years, and often for generations.

One thing is certain:  despite these well-understood realities, as sure as death and taxes every year the government will spend less on infrastructure than is planned in its annual budget.  Spending less than budget is normally to be applauded, but in this case the reverse is true.  Vital infrastructure spending underpinning the state's wellbeing is the first item that gets the chop.

When the budget outcome over the year has been achieved, it is because of less spending on infrastructure than planned or proposed in the previous year's budget.  This is not a criticism of the current government.  Governments of all persuasions have done that.

In 2015, the underspending from what was proposed was $58 million.  The year before, the first year of the current Government, the underspending was $123 million.  The latest year completed, 2016-17, we are not quite sure as the Premier's outcome has not been received and will not be revealed until later this week.  Judging by the estimated outcomes in the May 2017 Budget, the underspending will be about $48 million.

That is a total of $229 million in three years of underspending on what was proposed.

Mr Valentine - Does that include the money they put aside - $330 million?

Ms FORREST - No, it is how much was put in the budget to be spent in that particular calendar year, and then you have to look at how much was actually spent.

Mr Valentine - The 2017 Budget?

Ms FORREST - Yes.  We will not know exactly how much has been spent in the last financial year until the final reports are out.

The Treasurer is keen to sell himself as a wizard financial manager, but the Government's cash position is in no small part due to scaling back infrastructure spending.  That is how it has been done.

In some cases, we are told it is a deferral, but that is a red herring argument.  The reality is we have spent less than we planned and we have spent less than we should.

In 2015, we barely spent more than depreciation.  That means we renewed and replaced our infrastructure at about the same rate as the old stuff was wearing out.  That is not good enough.

The next year, 2016, and in subsequent years we have spent more, but only because of the Royal Hobart Hospital.  Take that out of the picture and we are underspending.

The Royal Hobart Hospital rebuild is an embarrassment.  Again, this is not a swipe at the current Government.  The previous government was just as bad, perhaps worse.  The reason the current Government is struggling a bit right now, spending more than it is receiving, is because it has to find the amount to rebuild the hospital out of its current cash flow.  Notwithstanding some of the grants earmarked for the rebuild were received some years ago, they were spent in other areas.

The hospital debacle highlights why we need better ways of doing things.  There is an increasing nagging doubt things will return to the good old days and we need to rethink how we do things.

If there is one such area where there should be a lot of common ground, it is infrastructure.  This covers our key assets within the state and the vast majority of the long-term intergenerational infrastructure that will benefit our children, our grandchildren, our great-grandchildren.

While at the outset the initial investments are a lot of money, as I have said, the return on investment is significant.  When the cost is amortised over the life of the asset, it is an area where mature adults should be able to plan and prioritise what we need.

Take all the water and irrigation infrastructure spending over the last eight years.  How was it able to be achieved without too much political rancour?  I am not up to speed on the finer points of what has been achieved but I am aware it was well managed and communities were steamrolled.

Why can we not build a hospital we need and everyone wants without all the political argy bargy?  Why can we not build all infrastructure we need and everyone wants without debilitating arguments and party politics and often the highly visible pork-barrelling that occurs leading up to elections?

Whatever the government may spend on infrastructure, as much again is spent by government businesses, and spending by local councils adds up to quite a large sum.  The reality is we have a few departments and government businesses and 29 councils all making infrastructure decisions.

For heavens sake, we are a state of 515 000 people.

The Government's TasWater take over pre-empts the broader question of how we structure infrastructure spending.  The Government suggested the current TasWater structures is failing the state and a bit more ministerial direction is required.

Without discussing the merits of the Government's case, this is the question facing all infrastructure spending.  Would we be better served with freeing infrastructure spending dictated by election cycles instead of more ministerial direction?

There is no doubt in the minds of anyone who has had a serious look at infrastructure spending - for instance, the Productivity Commission - that when political pressure influences decisions, the results are suboptimal.

The primary role of government in this instance needs to be instituting structures and helping assess needs.  Jumping the queue with pet projects at election cycles should fall outside this role.

The majority of the public does not want more politicians; they want the current lot to do a better job.  The public does not want to hear spiteful, political debate when the role of politicians should be to organise workable structures that are self-perpetuating and require political oversight but not interference.

The public does not want to wait for the budget each year to see what infrastructure goodies are being handed out.  The public, least of all, does not want to be insulted just prior to elections by deliberately tied promises that are scarcely little more than bribes.

The public wants to see a rolling program of infrastructure spending that spans election cycles.  The reality is, over half of infrastructure spending is sourced from federal government grants.  The aim should be to make this a permanent predictable stream as part of the operations of the federal system.  It should be combined with predictable budgeted amounts from state government and local government, if it is determined to include them, rolling out program spending agreed across the spectrum and spanning beyond the next election.

After giving this important matter much consideration, it seems that is the best way to achieve an outcome which meets the needs of not just the current, but future governments, but particularly all Tasmanians.  This needs to be achieved through a consensus approach, with all political parties agreeing to the most effective way to achieve such an outcome.

For that to occur, we need all parties at the table to develop a framework to achieve a long term solution that will endure beyond government terms of office and election cycles.

That is why this motion proposes the establishment of an infrastructure panel - to initiate discussion and work towards a consensus approach for the benefit of us all.

If governments and the people of Tasmania had some certainty around the short- leading to long-term infrastructure planning and spending, this would create much greater certainty for all, including those in the private sector wishing to invest in Tasmania.

Of course there will always be a need to provide for urgent matters to be attended to, such as when natural disasters occur, and that occurs now.

I propose a panel be established along the lines of a tax review panel we had a few years ago.

Ms Rattray - I hope it is better than that.

Ms FORREST - As I said, this is slightly less politically sensitive, in many ways, than tax reform.  Tax reform is a difficult one for governments to tackle.  Surely we can have a consensus approach on infrastructure planning and spending?  It should not be that hard.  I would hope for a better outcome on that one than on the tax review panel because of that lower level of sensitivity.

Along with a better outcome, I hope for a commitment of all parties to work together to achieve an outcome that benefits Tasmania.  Surely this is what we should be doing as a parliament as elected members?  We are working together for the betterment of Tasmania, particularly in such an important area of infrastructure.  Infrastructure benefits us all.  We all use it, we all need it.  It is an economic driver, surely we can agree. 

I expect the Government may say this already occurs through Infrastructure Tasmania and the Structural Infrastructure Investment Review Process, and my proposal does not wish to ignore or diminish this.  What is lacking is an agreed framework to plan, fund and deliver infrastructure in Tasmania with a longer term focus than election cycles.  We need parties at the table to do that.  It is as we talked about in education - for example, in Finland, there is a 30 year plan and they do not muck around with it.  We need a long-term plan that sees into the future, looks at our future needs and is not driven by election cycles and someone's political hide.

We need a multi-party panel that reviews and explores current infrastructure funding, decision making and assessment processes and investigates options for alternative models with the capacity to benefit Tasmanians and encourage private investment.  As we all know, private investment requires some certainty, and a model such as this would assist.  Such a model would require engagement with, and involvement of, the Australian Government.  After all, most of the major infrastructure projects are funded by the Commonwealth. 

It is important we as a state can agree in the first instance on what an effective model looks like.  We need to have a discussion here first.  We as a state could lead the nation on this.  If we can get this right and look at how we overcome this election cycle short-termism and short term thinking, we could provide the model for other states to follow and then we can all benefit.  I am sure the Australian Government would welcome some indication of how it could do it too because it affects the decisions made at an Australian government level, as well as at the state level.  If this panel were to be established, once an agreed framework and model was determined, the minister for infrastructure of the day could take such a model to the Council of Australian Governments - COAG - and encourage other states and territories as well as the federal government to work with it and look at it. 

For these reasons I seek the support of members for this motion.  It is to establish and enable an initial and broad discussion between all parties within an established structure to begin.  It is not looking for the solution here and now.  It is setting up a framework for all parties to come together to look at what the model should look like, how we can overcome this short termism and lack of certainty, not only for the public sector but particularly for the private sector.  We want to encourage economic growth in our state.  We want to encourage economic investment from the private sector.  It needs certainty.  With this constant shuffling of the deckchairs, proposals being pushed out or deferred, or perhaps not even going ahead, or not knowing when or if a certain road is going to be upgraded or a certain infrastructure development is going ahead, they are not going to invest in other key infrastructure or other key opportunities for the state.  Let us give them certainty.  Let us give Tasmanians certainty as well.  Maybe an upgrade to their roads is what they really want to see, but if at least they see it on the plan five years hence and they have confidence it is not going to change, surely that is a positive thing for all of us.

I encourage members to support this motion.  It is nothing too radical.  It is certainly less controversial than the tax review panel established under a previous government.  It can provide a great way to look at all the options and ensure we have good infrastructure investment in long term, intergenerational infrastructure that benefits all Tasmanians.