Wednesday, 22 June 2022

Department of Treasury and Finance

Budget papers 2022–23

Mr DAVIS (Southern Metropolitan—Leader of the Opposition) (17:34): I am pleased in the reports section tonight to talk about the state budget and specifically the transport infrastructure section of the state budget. We know that this Andrews Labor government has botched so many major projects. There have been cost overruns and time delays in almost every project—more than $28 billion of cost overruns. This is a government that cannot manage money. It cannot manage major projects, and these cost blowouts are damaging the state budget. We heard, for example—the clerks will be well aware—that in fact the huge cost blowouts are eating the budget from the inside. We have seen the downgrading of the state’s credit rating. The huge blowouts in costs are actually pushing the state further and further into debt. The debt figures from New South Wales show that, whilst their debt has increased, their debt is about half the size of the debt of Victoria as a share of gross state product—about 13.7 per cent. The Victorian percentage is up over 26 per cent—$167 billion is where we are heading.

The report today from the Auditor-General, Melbourne Metro Tunnel Phase 2: Main Works—June 2022, is damning reading. He concluded the project is facing time and cost pressures. He concluded some work has been de-scoped and almost all the risk contingency funds have been used. Ninety-eight per cent of the risk contingency funds have been already used, and the project is years from completion.

But it is important to note that the high-capacity signalling was in 2017 pointed to as cutting-edge technology that would enable people to get home sooner and safer every day and that would mean more trains and less waiting. That was what was said by the government in 2017 as they claimed they were producing a modern railway system. Now what we find is a massive de-scoping. More than 25 kilometres of the project, about a third of what was previously announced, will not have the high-capacity signalling in place, significantly reducing the speed of trains in those areas. What is the sense, after all, of producing a modern train system that is a go-slow one? This is like Thomas the Tank Engine type technology. Instead of the high-capacity signalling that we expected on the Metro Tunnel, we now find that it will not be able to operate with the high-capacity signalling that was expected and would have been part of any modern railway. I mean, it is frankly a circus that you would be building this with part of the system with high-capacity signalling and another large part of the railway without high-capacity signalling. It is just extraordinary.

In this chamber some years ago I raised a very significant issue. Let me just say I am invested in the Victorian Comprehensive Cancer Centre, the Peter MacCallum project. We spent $1 billion to build the best imaging equipment and the best treatment of cancer in the Southern Hemisphere at the VCCC, and now they are putting a railway there despite warnings that actually the electromagnetic radiation will interfere with the high-technology imaging machines and the treatment machines at the VCCC. What a circus. I mean, they knew this ahead of time. I asked the then health minister, Jenny Mikakos, in this chamber about this issue. She gave an evasive answer, but it is clear that the government knew this was an issue at the time—

Mr Leane interjected.

Mr DAVIS: Well, no, it is not just her. I actually think it is Jacinta Allan and the Premier who are responsible for this. The report found that the Andrews Labor government ignored the significant risk of the electromagnetic interference and the serious impact on the MRI machines at Peter McCallum. I mean, this is actually disgraceful. We have got a $1 billion investment in the hospital, and now we are tampering with it.

Mr Leane: John Thwaites.

Mr DAVIS: John Thwaites would not have been happy with this. He would not see this as a good outcome.

Mr Leane interjected.

Mr DAVIS: No, I am pointing to the last health minister, who was actually the one who was asked the question about exactly this and the failure of the Minister for Transport Infrastructure, the Treasurer and the Premier to deal with this. This is a major risk.

What the report shows is that the cost has now blown out by $3.58 billion when you go back and compare it to Labor’s original estimates. $3.6 billion is a massive blowout on a project that the Auditor-General has blown the whistle on today—a project that people wanted to work properly but is a second-rate railway. I mean, this is Puffing Billy or Thomas the Tank Engine technology. They have really got this very wrong.