Infrastructure SA Bill

Second Reading

Adjourned debate on second reading.

(Continued from 6 September 2018.)

The Hon. F. PANGALLO (15:34): I rise to speak in support in principle of the government's Infrastructure SA Bill. This is an important piece of legislation that, if passed and put into practice assiduously, can deliver economic, environmental and social benefits to our state through major projects worth $50 million and more.

The Treasurer has already announced significant infrastructure spending in his budget. I would envision an ISA would play a key role in the rollout of future projects in our state, which spends about $1 billion per year, and would be separate to those projects of the national body, Infrastructure Australia.

In getting the framework together for this proposed statutory authority, I note the government sought the quality advice and input of key industry and infrastructure experts in Brendan Lyon, who spent a decade as chief executive of Infrastructure Partnerships Australia, and former chairs of the federal body Infrastructure Australia Sir Rod Eddington and Mark Birrell.

Infrastructure SA will be comprised of a board drawn from private and public sectors. The government promises independence, with four members with industry experience and qualifications plus three ex officio members, chief executives of the Department of the Premier and Cabinet, Treasury and Finance, and the Department of Planning, Transport and Infrastructure. It will be the board's responsibility to map out a 20-year strategy along with ongoing plans for the government to consider, with the wish list coming under review every five years.

Taxpayers will at last have a clear sight of what will happen and how their money is going to be spent, something we have not had in the past. ISA, we are assured by the Premier, will scrutinise and evaluate each proposal to make sure it stacks up. Of course, it does need to be independent of government interference. What we do not want is a body that is going to heel when their master whistles. They need to act without fear or favour.

Pork-barrelling can be a tantalising temptation for any government when elections are near, as it was with the last government. Labor recklessly promised billions in infrastructure projects where no independent business case or economic modelling had been presented. A prime example of this was the announcement of a deepwater port in Whyalla to sandbag Labor's weakened grip on the seat of Giles, which they eventually won but only after an extremely dirty contest.

It was a vacuous promise, because marine engineers have ridiculed the idea as being uneconomic, running into billions of dollars, because that stretch of the gulf was not suitable and would require massive dredging works. It would also have compromised the viability of the new deepwater port and rail line further south on Eyre Peninsula at Cape Hardy being developed by Iron Road Ltd.

Hell would need to freeze over before a Liberal won the seat of Giles, but this government has at least followed through on building a $100-million school in Whyalla. However, I am rather perplexed by the spend when the Treasurer says he needed to find savings. I was in Whyalla only last week, and the Steel City has three perfectly good high schools, one of which recently had a multimillion-dollar refit.

Only proper long-term planning, scrutiny and forensic economic and evidence-based analysis of projects will avoid white elephants like the mothballed $1.8 billion desalination plant and the ridiculous $2.4 billion spend on the new Royal Adelaide Hospital, which is not fit for purpose and which will end up costing taxpayers close to $12 billion when it gets handed over in 29 years. The O-Bahn tunnel at $175 million just was not necessary, and I do not understand why $35 million needs to be wasted on a right-hand tram turn into North Terrace that engineers warn is fraught with such insurmountable challenges that it may not be worth it. A lesson here is Sydney's diabolical light rail project in George Street—over budget, behind schedule and a killer for businesses.

Cities are the major beneficiaries of major projects spends, but what about our regional communities? They are slowly dwindling, with figures showing a worrying decline in the population of all the state's major regional hubs. This needs to be reversed. Australia desperately needs a national population policy. Most new arrivals, 85 per cent of them, choose to settle in either Melbourne or Sydney. Smaller cities like Adelaide must attract a greater share. One solution put forward by the Prime Minister is a new visa category requiring skilled migrants to live in regional centres in the smaller states for up to five years. But the conundrum is they need to be able to find work.

Here is where a body like Infrastructure SA has value, by identifying projects that will generate ongoing employment in regional centres. Our economy is changing. Australia has had a great run for the past 25 years. Now, we are in a transition phase, going from resources to service and knowledge-based industries with energy, telecommunications, water and transport being the four main infrastructure and sectors. Nationally, we have the much-vaunted NBN which is the country's biggest ever infrastructure project. The jury is out on that.

On the east coast, the emphasis is on road and rail public transport and freight systems connecting cities to regions. Victoria has just announced an ambitious $50 billion rail project. The federal government and Infrastructure Australia have recognised the need for a national freight and supply chain strategy that drives efficiency so that Australia remains economically competitive and arrests a loss of market share in the Asia region. Apart from a couple of big road projects and the Tarcoola rail line, South Australia is not getting much at all.

When it came to vision, many past state governments were myopic and made many foolish errors. We ripped up a perfectly good suburban tram network. Now, when more people are choosing to drive their cars to work instead of using public transport, we are putting light rail back at a huge cost. Our rail and road networks are in urgent need of upgrades. Scandalously, much of our country rail network was sold off for one dollar to an American company that shows little interest in our economic welfare.

On recent road trips to the Mid North, Eyre Peninsula and the Riverland, I saw rail lines in bad states of repair which could and should be used to transport the in-demand freight of our primary producers to ports and markets. The company, Genesee & Wyoming Australia, has welched on the deal in which they had to ensure those rail lines were maintained to such a standard that they could be utilised within two or three weeks. This breach of contract and faith should not be tolerated and the government should exercise its right to reclaim them at a time when other states are optimising their rail networks.

In the Riverland, mayors from Berri to Renmark and Loxton expressed their frustration with major highways and bridges in danger of collapse, needing vital upgrades to cope with the increased demands of heavy freight movement using B-triple trucks. Infrastructure is a nation builder and a driver to jobs and prosperity. Many of you may recall that in July, I floated a big picture idea of a bridge from Cape Jervis to Kangaroo Island that might be considered by a body like ISA, or IA for that matter, in a decade or two or three.

Part of my thinking then was to highlight the high cost of the monopoly ferry service to this untapped and greatly under-resourced tourism mecca. It was met with equal shares of mirth, the usual uninformed media cynicism and, I must say, enthusiasm, some from unexpected quarters who saw the enormous economic benefits an infrastructure project like that could present. The proposal attracted international attention from the highly respected engineering sector as well as cashed up foreign investors prepared to build it at the estimated cost of around $3 billion. With some will, it could easily progress from pipedream to a reality one day soon.

This brings us to how these major South Australian projects can be funded and financed. The Treasurer might enlighten us on that down the track; meanwhile Infrastructure Australia's current chair, Julianne Alroe, says the current federal model needs robust, incentive-based funding reform. She suggests five areas modelled by Infrastructure Australia that aim to drive efficiency, accessibility and affordability of infrastructure services for all Australians. They are: road-user charging; urban water sector reform; reform of the electricity market—and this one for the Treasurer and his government to heed—reforming land tax; and lastly, franchising public transport services.

According to Dr Alroe these reforms are well suited to an incentive approach because they can deliver cross-jurisdictional benefits and enhance national efficiency and productivity. She points out the potential benefits for these five reforms alone are substantial, with modelling showing that introducing incentive payments could boost GDP by $66 billion by 2047, representing almost 2 per cent of GDP by that time. This approach could also deliver $19 billion ongoing increase in national tax revenue, additional funding which could be reinvested in new and improved infrastructure. So, there are distinct advantages in doing things right, whether at national or state level.

I look forward to the committee stage. I note that the Labor opposition has put up a raft of amendments, many are quite ponderous and unnecessary, and there are three amendments proposed by the Hon. Mark Parnell to consider. I do hope sensibility prevails and that this bill does not go the same way as the productivity commission bill, when the government folded its hand, left the table and did its own thing. I commend this bill to the house.

The Hon. D.G.E. HOOD (15:47): I rise to speak in support of this bill which seeks to deliver one of the Marshall Liberal government's key election promises that will be fundamental in delivering a stronger and more vibrant economy for South Australia. With numerous other measures in place to promote further investment and greater business activity in this state, including a reduction in various taxes and levies, support for apprenticeships and traineeships, and the trial of a new temporary visa to attract entrepreneurs, it is vital that the necessary infrastructure is in place to support and facilitate the anticipated growth in enterprise and population.

South Australians deserve a forward-thinking state government that sets in motion long-term systemic plans that go beyond its current term of office, and the Marshall Liberal government is taking this very approach, prioritising people before popular politics through the introduction of this legislation. This bill provides for the establishment of Infrastructure SA, an independent body that will be charged with providing advice to the state government to promote the efficient, effective and timely coordination, planning, prioritisation, delivery and operational impact of infrastructure in South Australia. The Marshall Liberal government acknowledges that investment decisions on infrastructure projects should be based on sound expert advice, as opposed to short-term political gain and electoral cycles, as we have witnessed in the past.

One of the agency's principal responsibilities will be to devise a 20-year state infrastructure strategy to be reviewed at least once every five years, which will assess our existing infrastructure, current relevant state government strategies, information provided by the public, private and not-for-profit sectors, trends, present and future needs and objectives.

The board will comprise four independent members with appropriate skills and experience, in addition to the appointment of the chief executive officers of the Department of Premier and Cabinet, Treasury and Finance, and Planning, Transport and Infrastructure as ex officio members. It is expected that this strategic and complementary combination of expertise will ensure a more transparent process of identifying infrastructure priorities and the prudent allocation of taxpayers' money, justified and supported by the projected social, economic and environmental benefits that will ensue.

Infrastructure SA will initially be commissioned to investigate 10 major projects nominated by the state government, some of which include the following:

completion of the north-south corridor through metropolitan Adelaide;

a GlobeLink upgrade to boost our export capacity;

a grain and minerals port on Eyre Peninsula;

an underground rail link in the CBD between the northern and southern train lines;

an extension of tram services in the CBD;

the removal of level crossings to reduce traffic congestion and enhance productivity in appropriate places;

the completion of the electrification of the Gawler rail line; and

development on the LeFevre Peninsula to accommodate the naval shipbuilding program at Osborne.

It will also be directed to evaluate major non-transport infrastructure initiatives, including opportunities for additional affordable housing, increasing the capacity of our prisons and improving court infrastructure, with the adoption of new technologies and even satellite courts.

The agency will have scope to investigate other possible projects at its own discretion for consideration, which will actively be encouraged by our state government. I am sure members would agree that this particular capability is imperative, and ensuring Infrastructure SA is able to function as a truly independent body is critical. Our government is also placing this agency in a position to work closely with its federal counterpart, Infrastructure Australia, in managing proposals requiring federal government funding.

Due to the previous state Labor government's haste, oversights and budget blowouts concerning projects, such as the desalination plant at Port Stanvac and the new Royal Adelaide Hospital—not to mention its failure to improve our infrastructure to secure our state's baseload power supply—it is evident that a fresh approach is required to foster greater accountability and community participation in the government of the day's decision-making processes.

We are certainly not the only state to acknowledge the need for an independent agency, not unlike the one being proposed here, with Infrastructure Victoria and Infrastructure New South Wales both in operation for very similar purposes to our proposal. It would certainly be neglectful for our state government to fail to acknowledge what is regarded as best practice in the two cities within our nation that boast the largest populations and the biggest, most dynamic economies.

The establishment of Infrastructure SA is long overdue in my view. State governments simply cannot afford to continue responding to the needs of the community with ad hoc building projects and maintenance that is undertaken primarily to garner the favour of voters in strategic areas within marginal seats. As the Premier mentioned in the other place, this initiative demonstrates an appreciation of the fact that our hospitals, schools, recreational facilities, roads, railways, ports and utilities are owned and operated by various tiers of government, as well as the private sector, all of whom deserve input into where time, money and energy is invested.

I wait with interest to see how this new body plans and provides for South Australians in an effort to revitalise our state's economy, whilst preparing for our anticipated and much-needed population growth. No state government will ever be immune to having its own biases or pet projects, and I am pleased that the Marshall Liberal government is taking steps towards welcoming scrutiny surrounding state planning, to prevent the mismanagement of our limited capital and embracing pragmatism in catering to our state's evolving socioeconomic environment. I am very pleased to commend the bill to the house.

Debate adjourned on motion of Hon. J.E. Hanson.