Federal minister for trade and investment Andrew Robb says the Victorian Government’s decision to scrap the East-West Link tollroad in favour of the Melbourne Metro rail project “has done amazing damage” to Australia’s international reputation relating to sovereign risk.
Robb made the comments during a public debate for ABC’s Q&A program, which was aired live from the Melbourne Recital Centre on Monday night.
“[Victorian premier Daniel Andrews] did make the promise that he would scrap the East-West Link but he also said it would not do any damage to the reputation of Victoria or Australia from an investment point of view,” Robb said.
“I spent last week in the Middle East … I’ve seen every sovereign wealth fund across the gulf States last week, [and] not one of them failed to raise this subject with me,” the trade and investment minister continued.
“[Andrews] has done amazing damage to our reputation as a country with no sovereign risk and that is going to increase. There’s going to be a premium put on interest rates for any infrastructure around Australia.
“So all Australians are going to pay for Daniel Andrews, not just the 7,000 people who haven’t got a job as a result.”
Robb is a member of the Federal Coalition, which was prepared to assist in funding the East-West Link, but is not interested in funding the rail project.
Responding to an audience member who justified the cancellation of the East-West with Infrastructure Australia’s cost-benefit score of less than 50c to the dollar, Robb said conditions on the ground suggest otherwise.
“I don’t know who does or doesn’t drive over that bridge to Geelong but, you know, you’re there for hours,” he said. “It’s a parking lot most mornings and most afternoons.”
But federal opposition minister Anna Burke, who represents the suburban Melbourne seat of Chisholm, suggested the cost-benefit analysis was enough evidence to justify abandoning the road project.
“The cost analysis was never there and we’ve got projects that need to be done to assist with freight movement, particularly in the west,” Burke said.
“[East-West was] not going to resolve the traffic problem because the road was always about getting people to the airport,” she continued.
“Most of you aren’t going to the airport, you’re going to town. So if you want to build a road, let’s resolve the bottleneck at Hoddle Street. That design was never going to do it.
“What we need is to get people off the road and into a light rail which should be put down the Eastern Freeway because getting cars off the road is better for all of us…”
Controversial radio host Derryn Hinch presented the panel with his own – unsurprisingly assertive – opinion.
“The problem is you’ve got so many bloody greenies trying to push us all onto public transport that they’re trying to force cars off the road,” Hinch said.
“Yeah, [Andrews won the election], but I think if you do any polls now and ask people they say ‘Yeah, but we do want [East-West] built’.”
This from a Minister of the Crown who is quite happily prepared to put Australian taxpayers at “corporate sovereignty” risk through the proposed ISDS clauses in Australian trade agreements… Even the Americans have caught on to that trap.
Only “Better Economic Managers” would keep advocating to spend huge sums for a project that returns 40cents or less in every dollar spent.
This is just a further reminder that key politicians do not understand the utility of cost-benefit analyses as an indicator to future budgetary problems, and that a BCR below one means that future generations will be burdened with more debt (unnecessarily). A BCR of 0.45 should be red flag warning sign but instead they rely on their own experiences of frustration sitting in traffic on the Eastern Freeway or Hoddle St or wherever at certain times of day. Gee, $1 billion per km to solve a minority of individuals from having short term delay problems, makes real financial sense. How scientific is that?
Andrew Robb and the Federal Coalition Government do greater damage to Australia’s international credibility by refusing to fund urban rail transport. This road project was always a dud that did not stack up financially nor as a transport solution. Their repeated claims that it provide travel time savings of 15-20 minutes for journeys between Geelong and the City are absolute nonsense, as are Robb’s claims here that traffic sits stationary for hours on the West Gate bridge.
What a load of rubbish!
If Andrew Robb was so concerned about “Sovereign Risk” and 7,000 unemployed, his government would have given the money intended for EWL to the Victorian Government so they can quickly get started and build the proposed Metro Line, but no, there’s no political advantage in doing that.
Why let Infrastructure Australia decide which project is of better value? How is a politician expected to get re-elected if he has no say in which project would be of benefit to him at the next election?
It was 100% right of Daniel Andrews to cancel EWL, just as it was 100% wrong of the Napthine Government to withhold details of the business case for the project, including projected traffic levels and to rush through legislation, including steep penalty clauses, just before an election. Any government that thinks it can do this sort of thing again without proper scrutiny, deserves to be voted out.
There are so many road projects that are more deserving. For starters, there’s the connect needed from Eastlink to the Northern Ring-Road. If any freeway is more deserving to be built than EWL, it’s that one. It’s a pity the electorates it goes through aren’t important enough.
What decent economic manager would keep promoting spending $1 to get back less than 45cents in return benefits?