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Estimates: what's in the budget for Smart Cities and red gums on Western Highway

Estimates & Committees
GreensMPs 9 May 2016

Senator RICE: I am rather confused about the dollars, in particular the part of the transport budget that represents newly announced investment and how much is just re-announcing money that has already been allocated in previous years. What part of the transport budget is new money that has not previously been announced?

Mr Mrdak: There is a range of new commitments in the budget. I could take you through those. Firstly, there are new commitments to the continuation of a number of programs which previously were not funded beyond the year 2018-19. They include the continuation of Roads to Recovery. In fact, the government has committed an additional $50 million a year to Roads to Recovery. That will continue from 2019-20 onwards. 

Senator RICE: In terms of the forwards, that is basically adding on the extra year.

Mr Mrdak: That is the extra year, but then the government has taken decisions about continuing the program beyond the forward estimates.

Senator RICE: In terms of the forwards, it is an extra $50million.

Mr Mrdak: In 2019-20, previously there was no funding commitment to Roads to Recovery. That is an additional $400 million in 2019-20 ongoing. Similarly, there is $350 million in 2019-20 ongoing which is provided to state and territory governments for maintenance of the national network, $60 million for the Black Spot Program continuing, $60 million for the Bridges Renewal Program in 2019-20 continuing, $40 million for the Heavy Vehicle Safety and Productivity Program in 2019-20 continuing and $10 million for research and evaluation.

Senator RICE: When you say 'continuing', how many years out is it allocated?

Mr Mrdak: At this stage, the forward estimates is that additional year, but then the expectation is that the program will continue for at least another five years. 

Senator RICE: Obviously beyond the forwards. Are there projects other than those ones?

Mr Mrdak: Additional to that are the announcements we have just been discussing with the allocation of the $1.5 billion for Victoria.

Senator RICE: Is that $1.5 billion money that Victoria already has? There is a history of this $1.5 billion that was initially allocated for Melbourne Metro and then was reallocated for the East West Link.

Mr Mrdak: It is money which has been provided for the East West Link project.

Senator RICE: Is this $1.5 billion the $1.5 billion that Victoria already has or is it the $1.5 billion that the Commonwealth has been sitting on previously in the locked box?

Mr Mrdak: It is the $1.5 billion which was prepaid to Victoria for use on this project.

Senator RICE: So it is $1.5 billion that Victoria already has.

Mr Mrdak: But which the Commonwealth had, up until this decision, factored into its budget position for this year, because Victoria was asked to return that money in accordance with the agreement that had been reached with the Victorian government.

Senator RICE: Continuing on from Senator Sterle's questions, you said that there were a range of negotiations over the project that that is being spent on, but was the announcement that was made on 8 April the first time the Victorian government had heard of that particular suite of projects to spend that $1.5 billion?

Mr Mrdak: It was the first time that they had heard of the full suite of projects, but there had been discussions for some time over elements of that.

Senator RICE: Potential options, but that was, 'Here's the suite of projects,' and now you are in continuing negotiations as to whether they want to accept that suite of projects?

Mr Mrdak: We are awaiting a formal response from Victoria in relation to those projects. That $1.5 billion is being allocated across, as we discussed—

Senator RICE: Which is not really new money, though, because it was previously allocated to Victoria for transport projects.

Mr Mrdak: It was previously allocated to the East West project and had been factored in to being returned to the budget this year, so it is an allocation of new funding for those projects. That is $500 million for the Monash Freeway, $350 million for the M80—

Senator RICE: Yes, I have all those on page 131. Given we are short on time, I have that list.

Mr Mrdak: Additionally, the Australian government in this budget has announced its commitment of $260.8 million for the additional tunnel section of stage 2 of the Perth Freight Link project. It has also announced a $200 million commitment to the Rocklea-Darra section of the Ipswich Motorway, stage 1.

Senator RICE: Are those two new previously unannounced funding?

Mr Mrdak: They are new commitments.

Senator RICE: New commitments and new impact on the budget bottom line?

Mr Mrdak: That is correct. They are new projects coming into the program. Additionally, the government will provide $50 million for business case development for new projects, particularly urban rail projects, as part of its Cities Agenda. As we discussed with Senator Williams, the Australian government has also made a commitment of an additional $593.7 million in new funding for the Inland Rail project to proceed.

Senator RICE: Is that on the budget books at $593.7 million?

Mr Mrdak: Yes, it is. The intention is to provide it as an equity injection into the Australian Rail Track Corporation for the next stage of Inland Rail.

Senator RICE: On page 131, it says that there is: … $50 million to allow the Commonwealth to adopt a more active role in preparing project and business cases … Is that the same $50 million that is flagged for the Smart Cities infrastructure financing unit in the budget?

Mr Mrdak: It is not for the infrastructure financing. This $50 million is being provided for business case development, and, yes, it is part of the government's Cities Agenda.

Senator RICE: We are told that there is $50 million for the Smart Cities infrastructure financing unit. Is it the same $50 million or a separate $50 million?

Mr Mrdak: I am not familiar with that reference. There are two commitments. One is to have a financing unit. Additionally to that, the Australian government is proving $50 million for business case development, particularly for city-shaping activity.

Senator RICE: So they are separate $50 millions?

Mr Mrdak: No. It is the same $50 million.

Senator RICE: It is the same $50 million.

Mr Mrdak: It is not yet clear how the financing unit will be established or funded.

Senator RICE: Okay, but it is only one $50 million, so basically it is the same thing?

Mr Mrdak: That is right.

Senator RICE: That explains why we could not find the Smart Cities infrastructure financing unit anywhere else. You basically called it two different things.

Mr Mrdak: There are two different processes. One is the establishing of the financing unit, the details of which are yet to be finalised. The second is the provision of up to $50 million for business case development which will support the development of projects which will support the cities—

Senator RICE: But it is one $50 million allocation that is going to cover all of those things. Looking at public transport specifically in the budget, what are the public transport projects in this budget that are definitely receiving funding?

Mr Mrdak: There are a number of rail projects, as well as, obviously, all of the road projects, which do support public transport given that, as we have discussed previously—

Senator RICE: Not all of them; we have discussed this. But specifically public transport projects?

Mr Mrdak: The predominant form of public transport for most Australians is bus travel and, obviously, improvements to the road network do make a difference to the efficiency of those systems.

Senator RICE: Not always. Let's not waste time discussing that. I want to particularly talk about specific public transport projects.

Mr Mrdak: As I said, buses are providing public transport.

Mr Mrdak: But you are not funding the buses; you are just funding the roads that can be used by buses. Let's talk about other public transport projects other than the roads agenda.

Mr Mrdak: Then we move on to rail projects, and there are a number of rail projects being funded—I will ask my colleagues to take you through those—which include the contribution in Western Australia and elsewhere.

Mr Foulds: In Western Australia there is a contribution of $490 million to Forrestfield rail link.

Senator RICE: Is that a new allocation?

Mr Foulds: Yes.

Senator RICE: So why, Mr Mrdak, did you not mention that one? Mr Foulds: It is part of the GST equalisation for Western Australia.

Mr Mrdak: It is a payment which has not been through our portfolio. You asked about projects in the Infrastructure Investment Program. I spoke about those. This has been done through a special payment through the Treasury portfolio as part of the GST equalisation which is going to be committed to the Forrestfield rail project.

Senator RICE: So it is an extension to the transport and infrastructure budget through Treasury?

Mr Mrdak: It has been done through the mechanism of the payment to WA for GST equalisation, but it will be utilised on the Forrestfield rail project.

Mr Foulds: Under the Asset Recycling Initiative, which is also administered through Treasury, $67.1 million has been provided to the ACT for its Capital Metro. For Sydney there is an agreement with New South Wales for ARI funding of $1.695 billion to go to Sydney Metro. Sydney's Rail Future will take $98.4 million under the Asset Recycling Initiative, and Parramatta Light Rail will get $78.3 million. Melbourne Metro will get $857.2 million, and the Western Sydney planning for the airport rail scoping and design at $27 million.

Senator RICE: That is all through the asset recycling program—all of those ones that you just listed?

Mr Foulds: The Western Sydney one is through our infrastructure program and through the Sydney West airport project. Additionally, the government has also recently signed off on the $95 million contribution to the Gold Coast Light Rail Stage 2 project, which again is through the Infrastructure Investment Program.

Senator RICE: Is that newly announced funding?

Mr Mrdak: It was announced late last year and was finalised just last week with the commitment and the start of work.

Senator RICE: With the asset recycling program, can you confirm what role the states and territories have had in terms of the project selection using the funds that they have been allocated?

Mr Mrdak: All of the projects have been put forward by the states and territories. The process has been that they have identified certain projects which they have sought asset recycling funds for. The Commonwealth government then considers those and reaches an agreement with the state or territory that those projects will be funded under the Asset Recycling Fund.

Senator RICE: So when they were announced, similar to the $1.5 billion to Victoria, the states did not know exactly which projects were being selected by the Commonwealth?

Mr Mrdak: No, the Asset Recycling Fund works on the basis that the state and the Commonwealth will sign a schedule to the national partnership agreement which sets those out. So they have been developed jointly.

Senator RICE: Can you then explain what happened with the Victorian government, which decided to go it alone with the funding of Melbourne Metro and then got this $853 million or whatever it was?

Mr Foulds: The Victorian government—

Senator RICE: It seemed like it was rather unexpected—that they were not expecting to get that—

Mr Foulds: It was absolutely expected by the Victorian government—

Mr Mrdak: Victoria put forward the Melbourne Metro as one of its projects for asset recycling. It had always been working on the basis that an avenue of contribution from the Commonwealth would be the asset recycling money.

Senator RICE: So were the states and territories aware of which projects had been funded before they were made public in the budget papers?

Mr Mrdak: Certainly. They put forward the project proposals and those were the subject of consultation with the states and territories in reaching that final list of projects which the Commonwealth would allocate asset recycling funds for.

Senator RICE: So when Victoria said they were going it alone with the Melbourne Metro and that they could not wait for the Commonwealth, they actually knew that they were getting the money from the Asset Recycling Fund?

Mr Mrdak: They were certainly aware that asset recycling money would be available, or could potentially be available—

Senator RICE: Why do you think they said they were going to go it alone then? Why?

Senator EDWARDS: Politics!

Mr Mrdak: I cannot speak for the Victorian government.

Senator RICE: I have a question about the East West Link money. You said that there is a contingency that is set aside for the East West Link: where is that in the budget papers?

Mr Foulds: It is in budget paper No. 1, and it is on page 8-30. It is a contingent liability, not a contingency.

Senator WILLIAMS: So you do not have that money back—

Senator RICE: It is one step removed—it is not a contingency—

Mr Foulds: It is a contingent liability. The money would be found, should the need arise.

Senator RICE: They would scramble somewhere to have it?

Mr Foulds: That is right.

Senator WILLIAMS: Which page will give us that—

Senator RICE: My last question is about the progress of the Western Highway duplication in Victoria. Is the department aware of the significant controversy that is going on currently with the loss of trees and the natural landscape features that are being destroyed for the building of this road? What is the Commonwealth's view of this?

Mr Foulds: I am aware of that, but I just do not know if I have any information at the moment.

Senator RICE: Over a thousand trees removed, when they originally estimated—

Senator EDWARDS: Well, plant some more!

Senator RICE: there were going to be 100. Huge, 500-year-old river red gums with enormous hollows in them. Is the department concerned about the problems there have been with the building of the road?

Mr Foulds: I do not have the information on hand. I will have to take that on notice.

Senator RICE: Thank you

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