Senator LUDLAM: I am going to pick up on a couple of themes from the last time we spoke, which was in October, about cycling, and whether or not cycling and assisting people to get out of cars and onto bikes counts as Nation Building. The easy answer is 'No,' since we do not fund it, but I am interested to know how Nation Building 2 will be used to support the objectives of the National Urban Policy. It says that it will. Can you talk us through how it will do that?
Mr Mrdak: Nation Building 2 is under consideration by the government. Work is now being undertaken with the jurisdictions. They will be matters for consideration for the government in the coming years. Certainly the government has made a commitment, in the National Urban Policy that was released last year, that future Commonwealth infrastructure investment will be geared towards achieving those urban outcomes. As we discussed earlier, we have already seen a significant lift in Commonwealth expenditure in urban public transport. That commitment is now some $7.3 billion in urban public rail alone and urban public transport. The additional areas, such as active transport, will be considered in the light of those commitments.
Senator LUDLAM: The minister took a question on notice last time as to whether there would be consideration of a stand-alone funding commitment for cycling and active transport in the next budget. Senator Carr said he would take it on notice and then he came back on notice and said, 'It will be announced on budget night.' He probably could have given me that at the table. Rather than asking the same thing again, Minister, how important do you consider it that there be a funding commitment for cycling, given all the other objectives that we have been talking about?
Senator Carr: I am sorry I cannot enlighten you further than the previous conversation, which suggested the government has these matters under active consideration and will advise the parliament in the normal way.
Senator LUDLAM: The National Cycling Strategy says you want to double the number of people cycling in Australia by 2016. It is not hugely ambitious but it is good. How are you going to do that without money?
Senator Carr: That is the issue that is under discussion at the moment. The whole issue of budgetary allocation is a question that is before government.
Senator LUDLAM: Has the government signed on to any national strategy to double the number of people in cars by 2016?
Mr Mrdak: No.
Senator LUDLAM: Apart from the Major Cities Unit, who I think are up a little bit later, is there any arm of the department, any section or unit, looking at active transport, or are they it-is that where our expertise resides?
Mr Mrdak: There is work ongoing, both in the Major Cities Unit and in this Nation Building area. As we have discussed previously, when we consider funding proposals for infrastructure-I think in the past we have had conversations about the large number of road projects that have included access facilities for cycling. On top of that, obviously, there has been a considerable Australian government investment in the $40 million program, which we have discussed in the past. Work right across the portfolio engages on active transport matters.
Senator LUDLAM: Where we got to last time was that it appears you cannot fund cycling infrastructure unless it is attached to a freeway in Australia and the $40 million you mentioned was a one-off that the Greens negotiated into the stimulus package and is long gone-very successful, well-spent, no scandals, which is why most people do not know that it existed, but long gone-and there has not, as far as I can tell, been a dollar in spending since then.
Mr Mrdak: As we have discussed previously, there is considerable investment in cycling facilities as part of our investment in the national road and rail network.
Senator LUDLAM: Yes, but that is being read a bit satirically in the cycling community: 'The only time the Commonwealth will spend a dollar on bicycles is if it is next to a freeway.'
Mr Mrdak: No, I think you have said yourself: a very successful Commonwealth investment in the national-
Senator LUDLAM: Yes, but it is a one-off. What I am asking for, and have been asking for for the last couple of rounds of this, is: is it just a fund of money that, when it is spent, is finished, and everybody goes off and does something else? We need a standing appropriation for cycling, as many states and local governments have.
Mr Mrdak: As the minister has outlined to you this morning, they are matters which are under government consideration.
Senator LUDLAM: We will have to see during the budget. I will leave it there.
Nation Building - PEAK OIL
Senator LUDLAM: This might be fairly quick, and I realise that it is not necessarily the Nation Building focus. My questions are directed mostly at Mr Mrdak, because there is a favourite theme of mine around oil prices as the key variable underlying transport policy in that we still do not appear to have institutionalised the concept that oil is about to get a lot more expensive. Agencies like BITRE and ABARE do the thinking and the international analysis and so on. Infrastructure Australia make the spending recommendations and establish the pipeline. Nation Building go out and spend it and implement. Who else is there on the institutional map who cares or is thinking about world oil prices as a component of infrastructure development? Have I missed anybody important?
Mr Mrdak: At the federal level you have captured the key agencies. States and territories, in terms of their planning and their work in project identification, factor these matters in quite heavily and there is quite a lot of analysis taking place across the jurisdictions.
Senator LUDLAM: Apart from Queensland, that is probably not true. You ask the West Australian government, as my state colleagues did last year, and they say it is a federal matter, which I found bizarre. So I have not missed anybody. Where does Minister Ferguson's Department of Energy, Resources and Tourism fit into that-or don't they?
Mr Mrdak: They have a responsibility for energy policy and the settings of the Australian government in relation to energy policy are determined through Minister Ferguson and his portfolio.
Senator LUDLAM: The three bodies I named before, not including that; we need to fit somebody from Minister Ferguson's department in there as well.
Mr Mrdak: Responsibility for energy policy and planning for long-term energy needs, as evidenced by the Australian government's draft white paper, are the responsibility of Minister Ferguson and that portfolio.
Senator LUDLAM: How much do they talk to you about how energy policy impacts on infrastructure policy?
Mr Mrdak: We work quite closely with them; our bureau worked quite closely in the development of aspects of the draft energy white paper that has been released by the government.
Senator LUDLAM: Yes, I will take that up with them later in the day. There is no other agency at a Commonwealth level thinking about how rising oil prices will impact on infrastructure spending?
Mr Mrdak: It is predominantly shared between ourselves and the resources portfolio.
Senator LUDLAM: Would you say that the current infrastructure funding, the pipeline that you are working through and that IA is working through, reflects a future which is a high oil price environment or a low one? Are we building for this century or for the last one?
Mr Mrdak: I think we are building for this century.
Senator LUDLAM: We are building infrastructure; we are making and prioritising funding decisions as though it is going to be a very high oil price future.
Mr Mrdak: We have factored in the price rises we have seen and projections of oil price. As Mr Deegan indicated, in terms of the benefit cost analysis that has been provided for projects, they factor in the latest thinking by IAEA and other leading bodies in relation to future direction of oil price.
Senator LUDLAM: Mr Deegan has never been able to share with me the methodology, though, or the weighting, the sensitivity, that is given to oil price. That is apparently a closely guarded secret. We do not really have any idea about what sort of future it is that we are planning for and whether we are building infrastructure that is fit for purpose or whether we are going to need to chuck a lot of these projects over the side and do different things if there is an oil price shock that is sustained.
Mr Mrdak: It is fair to say that governments are building infrastructure which is fit for purpose. We discussed earlier today the government's commitment to urban public rail; there are a whole range of projects which are taking place which recognise the changing dynamics of fuel supply.
Senator LUDLAM: Road to rail funding is still, rule of thumb, in this current budget, outspending by a factor of about five to one.
Mr Mrdak: We have made important steps forward in rail funding. You have heard this morning from Australian Rail Track Corporation a longstanding program of investment in rail track and investment in urban passenger rail. Similarly, we have also to factor in continuing growth in demand for road infrastructure which needs to be met.
Senator LUDLAM: Yes, but that demand is entirely a function of cheap petrol. There is nothing else behind it, cheap and convenient petrol.
Mr Mrdak: We have seen, certainly in the last decade, significant price increases in global oil prices. That has been reflected in changing patterns of demand. We have seen that, but within that we have also seen rising demand for road infrastructure.
CHAIR: We have run out of time, Senator Ludlam. I would ask that if you would put the rest of your questions on notice, please.
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