E&OE TRANSCRIPT

Q&A - ADDRESS TO THE QUEENSLAND MEDIA CLUB

BRISBANE

THURSDAY, 8 OCTOBER 2015

 

SUBJECT/S: Labor’s plan to unlock the infrastructure that Australia needs.

 

PATRICK CONDREN: Thanks very much, Mr Shorten. Can I add my vote of thanks for making such a significant announcement from your side of politics at the Queensland Media Club. It just goes to underline the role that the media and the media club plays certainly in Queensland. Before I throw it open to the pack, I have got a question for you. Maybe it's because you are a Victorian – and I'm not in the business of telling politicians what to do – but I’d have thought that given the events in Sydney on Sunday night and Jonathan Thurston' plea for a new stadium in Queensland, that you might have included that in your infrastructure plan, given that poor old Malcolm doesn't seem to be coming up with the dough that's required. Any plans for a new stadium in Townsville?

 

SHORTEN: Not a totally surprising question. I might just say about –

 

CONDREN: We are nothing if not predictable here.

 

SHORTEN: No no, I mean, you couldn't have predicted how close it was going to be on Sunday night. And for someone raised in an AFL State, and I know probably half of the room are Broncos and the other half are Cowboys, it was an amazing match to watch. But what I did admire about Jonathan Thurston wasn't just his strength of character, it wasn't just in the play-off after the end of the game – his recovery after hitting the post, it was that I've never seen a football captain get up and make a bid for infrastructure in his, you know, speech when he got the medal.

 

CONDREN: So what's the answer to the question?

 

SHORTEN: We are favourably disposed, but we’re not committed yet. A couple of reasons. I notice that Annastacia Palaszczuk is certainly going down that path pretty strongly.

 

CONDREN: She’s committed $100 million.

 

SHORTEN: Yes, that’s why I wanted to give her a plug for doing that.

 

CONDREN: So show us the money.

 

SHORTEN: Well I hear you. We'll take it on board. I'm favourably disposed, but I also get that these things have to be assessed in terms of what we would do in an election, and our policies, and how we pay for them.

 

CONDREN: Well Queensland is going to be vital to your chances of becoming the next Prime Minister.

 

SHORTEN: A little known fact, but I have a connection to Townsville. My parents were working up there and living up there when I was conceived, so does that make me a Townsvillean? I don't know.

 

CONDREN: Wow. A little bit too much information, anyway. Thanks for sharing, good job. Would someone from the gallery like to ask a question? Just state your name and your organisation.

 

JOURNALIST: Mr Shorten, how do investors get their money back on these projects that you've nominated? Does it mean, for example, that every train passenger on the Cross River Rail will have to pay a dearer ticket, does it mean that the Bruce Highway has to be tolled?

 

SHORTEN: Well on the projects which we have nominated, and take for instance the Cross River Rail, that's well under way in terms of the assessment. Infrastructure Australia has assessed it. What we want to do is encourage more private investment, but what we also recognise is that Government still has a role to be part of the investment package. In the case of Cross River Rail, there would be the opportunity for investors over time to seek a return. How we get the right price for infrastructure will be something that Infrastructure Australia would work through. So you used a reference to tolls. That would be part of what Infrastructure Australia would work out, not one size fits all, but I've got no doubt that as we build new physical assets, which create value over time, there will be a return for private sector investors, as there has been in the past with public/private partnerships.

 

JOURNALIST: Mr Shorten, Sarah Elks from The Australian newspaper. We are not used to this kind of advanced technology. Following on from Shane's question about toll roads, you've emphasised that Infrastructure Australia will have a strict commercial approach, but how will your model overcome that sort of predisposition to the bankable, early capital flow of toll roads, and get projects such as rail projects and other public transport projects up?

 

SHORTEN: Well, I don't think that rail projects are unattractive to investors. I think that when you look at the need for new rail in Melbourne, or Cross River Rail in Brisbane, I think there will be investors who are most interested in that. And again, this is where Infrastructure Australia gets involved. We are using the Clean Energy Finance Corporation model, which has generated a positive return of $2.20 for every dollar. Deals do have to stack up, there's no question about that. But one of the things we will do, Sarah, is we will increase the capacity of Infrastructure Australia to do all that difficult work between someone having an idea, and assessing it to be a commercial deal. One of the challenges for a lot of investors is that political processes are uncertain, there's not transparency in forecasting. I believe it is absolutely within the capacity of Infrastructure Australia, given more resources as we flagged previously, to be able to take some of the headache out of super funds and other investors looking at what is a good deal. One of the big challenges, of course, and Queensland's had its fair share of experiences with roads, is making sure that you get the numbers right in the first assessment. So this is where super charging infrastructure Australia becomes a vital ingredient, and then providing a finance capacity on top of it to help encourage early stage investment.

 

JOURNALIST: Jessica Marszalek from the Courier Mail. Mr Shorten you made the point that infrastructure funding cannot obviously be met in the future by the Government. The competition review earlier this year makes the same point and talks about using technology to bring about road user funding, different to road tolling, but obviously per kilometre tolling and the like. I just want to ask do you see this as having a role in the future?

 

SHORTEN: Yes, I do. I mentioned the managed motor way project in my discussion earlier, in my speech. The Government has currently turned its back on using smart technology in infrastructure to help take some of the challenges out that your question goes to. So there's no doubt that when we talk about infrastructure, it's a more sophisticated view than some of the current debate. It is about using technology and innovation, to help make those assessments which allow more calibrated risks to be evaluated. So we would encourage Malcolm Turnbull and the current Government to reverse the direction that the Liberals have been on for the last two years, turning their back on the use of technology and innovation in terms of its application to infrastructure investment.

 

JOURNALIST: Amy Romigez from Brisbane Times. We have heard a lot in Queensland about infrastructure, but we live in a State which has one of the most deadly highways in the nation. We have heard about Cross River Rail funding for at least 20 years now. We are begging for scraps for something like the next stage of the Gold Coast light rail when we are hosting an international event such as the Commonwealth Games. And you've come up with another plan, but how can you guarantee that we will actually see something from this?

 

SHORTEN: Well, I can't necessarily account for the last 20 years, but in fact what me plan today does is deal with some of the obstacles which have previously existed. We want to utilise the new Infrastructure Australia assessment and financing facility to bridge the gaps. Some of the problems, and I went to it a bit in my speech, that have occurred that have been blockers for investment is, one, just relying on Government balance sheets, they don't have the financial capacity to fund all of the infrastructure required. Two, people are sick of the day to day politicking. We want to create an Infrastructure Australia which, whilst it isn't going to be the Reserve Bank, could ideally evolve into that sort of independent centre for policy. And what we want to do is take transparent decisions, where it would report to COAG, so the States get to see what's happening, it can be not an argument about who is getting what and what the politics are of the political affiliations of a state or a national government. So you have an independent organisation, just rigorously and clearly and transparently assessing competing bids and helping underwrite some of the research and modelling which goes into it. Then we have a finance facility, because the challenge with infrastructure, take the politics out, have clear decisions, and also unlock some of the superannuation and I just want to perhaps expand a bit more about unlocking superannuation.

 

Periodically, some people will say, oh, you've got to tell the superannuation fund where it can invest. No, you don't. It's not the Government's money, it's the superannuant’s money. What we also need to do is create a functioning infrastructure market so that there’s an alternative asset class to Australian equities or investing overseas. We have all seen in recent weeks and months the travails of our stock market. It would be good if we could have alternative asset classes where a part of people's superannuation has the choice of investing in it, and that there's rigorous analysis. When I was a director of Australian Super, we made a decision years ago to put some of the resources and mandates not just in Australian equities, but in superannuation. Now, by 2025, there will be $4 trillion in superannuation. No-one is telling anyone under this proposal where that has got to go, but if we have got a market which is well run, which is transparent, where you've got that body of research and you've got a decision-making process, which is immune from politics and can take a longer term proposition, then I think that superannuation, that unlocks the difference, that's where we can get access to a much larger pool of national savings. I think this is a very sensible proposition and, as I said earlier on, if the current Government don't want to wait until the next election to get on with our infrastructure deficit, that's fine by us because we have to do politics differently. This idea on the one hand people can play gotcha games, we want to know every dollar, every figure for the next 20 years, is one challenge of politics. Another challenge is that therefore people keep a small target. Now, being a small target's deeply unsatisfactory to Australians. Because it all goes back to where I started with my proposition about infrastructure, we need to be ambitious. We need to be ambitious and we need to see what are the obstacles, take the politics out of infrastructure, turbo charge Infrastructure Australia, do that investment analysis, provide a financing capacity for early stage cycle funding, and then you help unlock a much larger balance sheet of the nation to invest in nation building with all of the jobs and productivity and liveability that goes with it.

 

CONDREN: Unfortunately, we are out of time. Can I just conclude by asking you a specific question, and with a short answer, preferably. That's no reflection on the previous answer. It might be a bit of a reflection on the previous answer. Campbell Newman in his book and yesterday had a go at the media, and he's had a long-term war with the media, particularly political journalism, you've had a dig today about the quality of journalism or asking journalists to change the way that they report stories, look at the stories. How much responsibility do politicians have with their three word slogans and with their zingers in terms of the very, very poor quality of political debate that we have in this country at the moment?

 

SHORTEN: Well, I wasn't referring to you, Patrick. No, it's not a go at the media per say and if it's come across that way, that's not what I meant. Political debate, and we are all stakeholders in political debate, has been unsatisfactory on a range of issues. What I’m suggesting is that we have got to talk about the future of this country and infrastructure, let's look at the problem we are trying to solve, the current infrastructure market's not clearing. Let's look at what we need to do, create a basis for the best infrastructure market in the world, and then let's look at the role that government can have with its capacity to look over the total range of issues to help make the market of infrastructure work.  I also made very clear that politics has to change. To the extent that media involvement in politics, they are one of the actors and I think you'd agree they are certainly one of the participants. I think the real challenge isn't in the people who report the debate, it's in a debate about national leadership.

 

CONDREN: Okay. Ladies and gentlemen, please thank Bill Shorten for his speech today.

 

ENDS

 

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