Wednesday, 28 August 2024
Motions
Suburban Rail Loop
Motions
Suburban Rail Loop
Georgie CROZIER (Southern Metropolitan) (14:09): I rise to speak to my motion regarding the Suburban Rail Loop and the significant issue that the state is facing in relation to the debt and the impact that the Suburban Rail Loop is going to have, or the debt that future generations will carry. I move:
That this house:
(1) expresses serious concern over the Allan Labor government’s decision to prioritise the Suburban Rail Loop over the essential services and projects Victorians need, despite a serious warning from S&P Global, including:
(a) the threat of a credit rating downgrade from AA to AA-minus if the Allan Labor government proceeds with the Suburban Rail Loop without further funding from the federal government;
(b) the financial strain any downgrade in credit rating would impose on Victorians through increased debt repayments;
(2) notes with concern that the Premier, Jacinta Allan, has neglected the real priorities of Victorians, such as better health care, safer roads, and cost-of-living relief, in favour of a large-scale project with no credible business case;
(3) calls on the Allan Labor government to:
(a) immediately halt the Suburban Rail Loop to protect Victoria’s credit rating and shield Victorians from further debt; and
(b) deliver the infrastructure and services that Victorians actually need, rather than pursuing projects that do not address the immediate needs of the community.
There are significant needs that communities right across the state are crying out for, and I will speak to those during the course of the debate on this motion.
The Suburban Rail Loop can only be described as a financial and political fiasco. The motion I have just read in to the house calls for a serious reckoning with the Allan Labor government. This is a government that has recklessly prioritised the Suburban Rail Loop, a $216 billion project without a credible business case, over delivering the essential services and cost-of-living relief that actually matter. The warning from Standard & Poor’s is clear: if the Allan government continues to push ahead, our state’s fiscal outlook will weaken and our credit standing will be further eroded.
What does that actually mean for Victorians? Well, what it means is that there will be higher debt repayments, less money for critical services and an even deeper financial hole for our state. We are paying $18 million a day in interest repayments today. In just two years time, in 2026, those interest repayments are going to surge to $26 million a day; that is over a million dollars an hour each day. It is an extraordinary amount of money that seems to just wash over the government. They have no regard for the amount of money and how that impacts on the delivery of services to communities right across Victoria.
Anthony Walker from Standard & Poor’s did not mince his words when he said:
… there’s a real risk the SRL may cost more … given the size and complexities of the undertaking and the state’s recent history of major projects going well over budget …
Evan Mulholland: He knows.
Georgie CROZIER: He knows.
If Victoria pushes ahead with the Suburban Rail Loop without additional federal government funding, the state’s fiscal outlook may weaken, further eroding its credit standing …
This is somebody who actually knows what they are talking about. You would think that the Treasurer, who has been reported as flying all over the world to meet with these credit agencies, would be listening to them and listening to these words about the dire situation that Victoria is in – a dire situation of his own making and the Premier’s own making. They are responsible for this dire financial situation that Victoria is facing.
Anthony Walker’s professional assessment is based on the grim reality of Victoria’s infrastructure mismanagement under Labor, a reality that the Premier, as I said, is ignoring. This is not just a debate about infrastructure that we are having today; it is a debate about the future of our state, our financial stability and the very fabric of our society. The motion before us highlights the critical issue of the threat of a credit rating downgrade from AA to AA-minus if the Allan government continues to push ahead with the Suburban Rail Loop without securing additional federal funding. There is a lot of conjecture around this, a lot of speculation about what the Premier will do, and I know that the government is divided over this. The Deputy Premier himself does not agree with the Suburban Rail Loop; he is more in favour of the airport rail link. There is a lot of tension in the backbenches of Labor with those western suburbs and northern suburbs seats, who are very testy – as they should be, because their communities have been ignored for years. Labor have taken them for granted. It is quite disgraceful how certain parts of the community have been so abandoned by Labor.
Premier Allan has repeatedly claimed that the Suburban Rail Loop ‘stacks up’ – her words – but the facts tell a very different story. From the very beginning the Suburban Rail Loop has been plagued by secrecy, poor planning and financial mismanagement. There has been no consultation with local communities that are going to be affected. It was Premier Allan –
Georgie CROZIER: I take up the interjection to say that no, you just missed the words, Mr Galea – the secrecy, poor planning and financial mismanagement and also the lack of consultation with affected communities. They have not been consulted and nor were the Victorian public around the debt of $216 billion. Did you take that to the election and say, ‘Victorians, the debt will be $216 billion and our interest payments are going to be surging to $26 million a day’? No, you did not. So do not say you took it to the community – you did not.
From the very beginning the Suburban Rail Loop has been plagued, as I said, by the secret notion of the government. The Premier has got form on this. She has been the minister for infrastructure, she has been the minister for Commonwealth Games – she actually failed both of those portfolio areas, and she is failing as Premier. She was the responsible minister at the time who pushed ahead with the Suburban Rail Loop and did not tell the Victorian community of the enormous cost it would have nor of the impacts to the financial situation of Victoria nor of the services that would need to be cut. Health is being cut, other areas are being cut – community safety, which is out of control, and the crime issue around the state is out of control. This is a government that has lost control of keeping Victorians safe and providing their services. So this is not just incompetence; it is a blatant disregard for the financial wellbeing of our state. The wellbeing of our state goes to the issues that I have just spoken on, whether it is community safety or looking after other assets and infrastructure around the state. Roads in regional Victoria – potholes galore – have been ignored by this government.
The Victorian Auditor-General has also exposed a cost blowout of up to $6.9 billion on the Suburban Rail Loop East alone – that part alone. But that is just the tip of the iceberg, as we know, because this government has form on blowouts – the tens of billions of dollars that have been wasted on projects where money has just been thrown away with no regard that it is hardworking Victorians and their families who are paying the price of this gross mismanagement and gross waste of taxpayers money. A report the opposition commissioned from the Parliamentary Budget Office reveals that the total cost of the Suburban Rail Loop East and Suburban Rail Loop North could skyrocket to more than $216 billion, as I have mentioned – more than four times the initial estimate. It is just figures that they pluck out. We have seen the blowouts in other projects where they have told the community, ‘It’s going to cost this,’ and then they have ended up with billions of dollars overrun. We partly know why – because of the CFMEU and their shocking standover tactics – and I will come back to that. We cannot allow the government to continue to go down this path where there is a reckless abandonment of taxpayers money. It is going to lead to a financial disaster for the state.
Those of us who have been around for a long time and have seen this government behave with broken promises understand that that is not in the best interests of Victorians either. When you look back decades ago at Labor’s records in financial management, they certainly have a record there. You go back to the Cain–Kirner years and the appalling situation Victoria was in at that point, and here we are again. But I think it is worse this time, and that is a concern. There are many Victorians that do not understand what happened in the 1990s – they were not here, or they were not born. But it took a long time for Victoria to get back on track. It was really a reckless government in the Cain–Kirner years, with Tricontinental and the State Bank and the appalling issues that were floating around over those few years at a national and state level. It was really very significant. As I said, the fiasco of the Cain–Kirner years really set Victoria back, and it took a long time for us to get back on track. We cannot afford to be going down that path again.
It is interesting to note that even the federal government has distanced itself from this train wreck. The infrastructure minister Catherine King made it crystal clear that no additional federal funding would be forthcoming without a credible business case. Infrastructure Australia is still waiting for critical information to properly assess the project’s merit, yet Victoria’s top transport bureaucrat Paul Younis had the audacity to declare that they have provided all the information that they have been asked for. This farcical situation was revealed just days after the Allan government’s desperate pleas for more federal funding were flatly rejected by the federal Treasurer Jim Chalmers. There is nothing forthcoming for this project because they know it is a dud, they know it does not stack up and they cannot see that there is a credible business case. It is quite disgraceful that the state Labor government is pursuing this.
It is clear that the project itself is being driven by pure political vanity rather than sound financial management or public need. It is clear that the Premier, who has spoken about this project, saying it will deliver jobs for years to come, is only concerned about her political masters, the CFMEU, a union that the Premier is extremely closely linked to. We know that. Victorians know that. They have seen it play out over the last few weeks, the disgraceful uncovering of what many people had known, which has cost Victorian taxpayers dearly and is going to cost Victorian taxpayers dearly into the future. Yet the Premier just turns a blind eye. The saga of the CFMEU and the bullish, intimidating standover tactics that have been employed are a sordid tale in this state’s history. To be now known as the ‘gangster state’ is an indictment on those who have overseen what has occurred on taxpayer-funded infrastructure construction sites, and that is Premier Jacinta Allan, who for 10 years as the responsible minister did nothing and now as Premier has been an ineffective and weak leader on an extremely serious issue – weak and beholden to the CFMEU.
Let us not forget the communities that are being left behind in this mad rush to build the Premier’s pet project. The project’s supposed benefits have been grossly overstated, and the financial underpinnings are questionable at best. The KPMG business case that was supposed to justify the project has been thoroughly discredited, with the Auditor-General criticising its overly optimistic assumptions and failure to adhere to Treasury guidelines. While Premier Allan continues to pour billions of dollars into the Suburban Rail Loop, essential infrastructure projects across Melbourne’s northern and western suburbs are being delayed, shelved or cancelled altogether. The Western Rail Plan has been quietly abandoned and the Geelong fast rail project has been scrapped – projects that would have delivered immediate and significant benefits to thousands of Victorians. The airport rail link, a project that has divided the cabinet and the Premier’s own party room – what a mess. These are not just missed opportunities, they are failures of governance that have real consequences for the people of this state.
The Suburban Rail Loop’s funding model also relies heavily on value capture taxes on property, and did the government take that to the election? No, they did not, and that is why there is so much community uproar in my area and other areas. Mr Welch knows that, I know that and many others know that, because the government did not even speak about this. That is going to gouge residents in the south and the south-east of Melbourne with new taxes. We are known as the highest taxing state in the country. For goodness sake, you cannot tax your way out of this. That is not the way to prosperity. But that is what this Allan Labor government think they can do, and it is going to set generations of Victorians behind the rest of the country. That is a very sad indictment on the Allan Labor government. Those people who are being affected are already burdened by the 30 new or increased taxes that I have mentioned – fees and charges on property that the Labor government has introduced over the past decade. This is a government that is squeezing every last dollar out of its citizens to fund a project that was never properly planned or justified.
The Suburban Rail Loop is not just a bad project, it is a driver of intergenerational debt. This house must act to protect our state’s financial future. The Allan Labor government must immediately halt the Suburban Rail Loop to protect Victoria’s credit rating and shield Victorians from further debt. We must direct those billions of dollars into the infrastructure and services that truly matter – our crumbling health system, public transport, roads, schools and community facilities in rapidly growing areas across Melbourne and in our regional centres. Victoria needs a government that puts the needs of its people above political calculations, that invests in projects with real benefits and that manages public funds with integrity and transparency.
I know that the government is incredibly sensitive about this project. It is a project that is sucking Victorians dry in terms of their financial security and, as I have mentioned, the intergenerational debt that is going to be laid upon our children and our grandchildren. This is what this government is setting up. It is setting us up to fail, and none of us want that. We must address the issues at hand now.
I have mentioned the crumbling health system. We saw that today. When you have got MICA paramedics having to go into a hospital to look after a critical care cardiac patient because there is no capacity in the emergency room, you know you have got a problem. When you have got potholes across your countryside where speed limits are reduced to 40 kilometres on large stretches of road because nothing has been done, you know you have got a problem. When your educational standards are falling and your children are falling behind, you know you have got a problem. When you have got a crime wave that is sweeping your state and is out of control, you know you have got a problem. Victorians know these issues are affecting them day in, day out – and their financial security, their personal security, is something that they are very, very conscious of, as they should be, because it is this debt, it is the financial situation that this government has put Victorians in, which is not fair. It is not fair and it is not right.
The Suburban Rail Loop is, as I have said, a vanity project of the Premier’s. She has mismanaged so much. She must put a halt to this and reprioritise the funding that she is putting towards this into the areas that matter, those areas that I have spoken of, because every Victorian deserves to have a better quality of life, not a declining one, which is what they will have when these taxes and debts increase further and drive business out of the state and drive households into further decline. I urge all members of the house to support my motion.
Sonja TERPSTRA (North-Eastern Metropolitan) (14:29): I rise to make a contribution on this motion in Ms Crozier’s name, motion 550, on the Suburban Rail Loop. It is really disappointing to hear the contribution of those opposite on a project like this, because one of the things that we recognise over here on the government benches is that we need to invest in really important and critical infrastructure. The Suburban Rail Loop is really a project that is going to futureproof suburban Melbourne, but further than that we know with our population growth we are going to need to have proper public transport infrastructure to help decongest our roads. We need to get cars off the roads and make sure that we have a world-class public transport system that can get people to where they need to be.
The Suburban Rail Loop is a project we have taken to two elections, and people voted on it. If people did not want that project, they would not have returned us with an increased majority. I know those opposite do not want to admit it, but they just cannot handle the truth. A lot of what was said in the previous contribution was really disinformation. I am looking forward to dispelling a lot of those myths for those opposite. Maybe if they listen, they might actually learn something.
Let us start with the costs and federal funding. Why don’t we start there? We have been absolutely clear on the cost of Suburban Rail Loop and Suburban Rail Loop East, which is the first tranche of the project. It was costed at $30 billion to $34.5 billion, and we are on track to hit that target. I know that is something you do not want to hear, because you want to rely on what the Herald Sun runs and they write your lines, but again it is irrelevant because what we know is we are on track to hit that target – and you hate it. We have been transparent about it, and our recent budget figures continue to show those estimates. Despite what those opposite say, it is disinformation to come in here every day or to stand at the door and talk about blowouts. We are on track to hit our estimated target.
We have worked with the Commonwealth government and welcomed their $2.2 billion initial investment. You see, that is what they do not understand: the Commonwealth has just given us an initial $2.2 billion investment. As the Prime Minister said when he announced the funding –
Members interjecting.
Sonja TERPSTRA: They want to try and verbal me, but I will repeat the facts of the situation so those opposite might actually learn something. As the Prime Minister said when he announced the funding commitment:
I can’t think of a more exciting infrastructure project in the entire nation and that’s why federal Labor will contribute an initial contribution of $2.2 billion to this project.
Let me say that again: initial contribution. They do not listen to what is being said, but that is okay because what they want to do is run such a negative agenda when what we are doing is getting on with the job of delivering on the important infrastructure projects that Victorians will need for the future. As the Prime Minister said, it will do what great cities do. If you think about great cities of the world, whether it is London, Paris or New York, you do not have to get into the centre of those cities by car. You can get around by public transport infrastructure. We have been really clear that we will continue to seek funding from the Commonwealth government and from value capture to help fund the project, and we are continuing to work with the Commonwealth government on additional funds. To date we have secured $14 billion of state and federal funding for design and development, initial and early works and main works for Suburban Rail Loop East. This is the tranche that is being done first. We are underway with the first stage of SRL East, which is fully costed. The works are happening on the ground now.
As I said, we have gone to two elections with this project, and we have been returned with an increased majority. If Victorians were worried about it, we would have been chucked out of office – but no. Do not let that be lost on those opposite.
Let me continue, and this is a really important point: Victoria does not receive its fair share of Commonwealth infrastructure funding, and in fact if you look, there has been a shortfall in terms of its population share over the last 10 years. We know who was in government over the previous years in the federal jurisdiction – it was the Morrison Liberal government, and our population share fell short over the last 10 years. From 2014–15 to 2022–23 Victoria received around $8.3 billion less than its population share of infrastructure funding – $9 billion instead of $17.3 billion.
Sonja TERPSTRA: I will take up Mr Galea’s interjection there. Why would the Commonwealth under the Morrison Liberal government short-change Victorians? Because they wanted to constrain us. They wanted to constrict us so we could not get on with doing anything. They wanted to make it difficult for our government to continue to build the important infrastructure projects that Victorians not only need but voted on and want. They wanted to make it difficult. But do not worry, we have been keeping receipts over here. We have got our receipt book out and we have been noting all of the shortfalls. What we are going to do now that we have got a willing partner in the Commonwealth government is ask for that money. Let me repeat: our shortfall over that period was $9 billion instead of $17.3 billion. The receipt book is coming out and we are going to ask for those additional funds. Yet over the same period New South Wales received about $2.7 billion more than its population share of infrastructure funding, which is almost triple what Victoria received. And of course we will continue to fight for our fair share of funding.
Let me now turn to Victoria’s credit rating, because of course Ms Crozier spent a bit of time talking about that. I want to talk about the facts in regard to our credit rating, because it is very important to set the record straight. When we came to government our economy was worth $400 billion. It is now worth around $600 billion, so it is growing. That is a good thing. It is projected to be worth nearly three-quarters of a trillion dollars by the end of the estimates. And we will be able to manage debt because we are making investments in productive infrastructure and because the 2024–25 budget demonstrates that debt will reduce as a share of the economy for the first time since 2017.
It would be a little bit scary if those opposite were ever in government and they became economic managers, because what they actually cannot figure out is when you build infrastructure projects, you generate improvements and growth in the economy, like jobs. When you generate improvements your economy grows because you spend money and it generates improvements in the economy. But those opposite do not get that. They do not understand how things work.
We have also created more than 850,000 new jobs since November 2014 through our investments to support the economy. Of course the more jobs you create, the more that helps the economy grow as well, and when people have money in their pockets then they also spend money, which helps to grow the economy. Not only that, they spend money in local economies, whether it is the local cafes or coffee shops or whether they are buying lunch or whatever locally, supporting local businesses. You have only got to look to projects like the North East Link or the Suburban Rail Loop and even the level crossing removal authority – when workers come and work on those projects, the local coffee shops love it. They absolutely love it, because traders are so thankful for the increased income that comes through their doors as a consequence of all of those workers –
Members interjecting.
Sonja TERPSTRA: That is why they are freaking out over there, because they do not like to hear the truth. I will just talk about the level crossing removal project in Croydon. The coffee shops there loved the fact that they had a steady increased flow of people coming through the doors to buy their lunch, to buy their coffees and the rest of it. That is income for local traders, and they love it. They absolutely love it. Again, those opposite do not want to talk about that. By making sure there are local projects in local communities, local economies are thriving as well. As I said, by contrast those opposite managed to create only 39,000 full-time jobs in the entire four years when they were in government. They did absolutely nothing.
Ratings agencies assessments remain stable and positive, and there is no change to credit ratings at this time. But again we have heard a lot of disinformation from those opposite. That is all they have got. They rinse and repeat the negative lines that they have got – rinse, repeat, rinse, repeat. We hear the same old standard, tired lines.
Sonja TERPSTRA: Central casting – we hear the same old standard, tired lines.
So again, S&P’s and Moody’s commentary around the budget indicates that they consider that the ratings are stable. Interest rates have changed materially regardless of credit ratings – and that is equally true for the Commonwealth and other states – and the Victorian and New South Wales 10-year bond rates are on par. This shows credit ratings are not the only or even the major factor in determining interest rates and that demand for Victorian bonds is strong. Victoria remains the engine room of the Australian economy.
Economic indicators show our plan is working. Our economy is now almost 11 per cent larger in real terms than before the pandemic, and business investment in Victoria is strong. It grew by more than 13 per cent last calendar year, the largest increase of all of the states. So we are on track with our fiscal strategy and already addressing many of the issues raised in S&P’s report, stabilising net debt as a percentage of gross state product for the first time since the pandemic. So let us not forget, these investments that we are making – (Time expired)
David LIMBRICK (South-Eastern Metropolitan) (14:39): I also rise to speak on this motion put forward by Ms Crozier. I have mixed views on this. It talks about needing to put an immediate halt to this project. I am concerned about putting immediate halts to other projects and what the termination penalties might actually result in. I know that when the opposition were in government, they signed a contract that was later terminated by the current government. It cost us a billion dollars to get out of that contract, and I have got no idea how much it would cost to get out of these Suburban Rail Loop contracts. But my problem is not so much with the SRL idea itself; it actually sounds like a grand idea, connecting these different areas into a hub around the city. My problem is around the way the government is going about financing it and managing it and the idea that they are creating jobs. I will point out yet again that government does not create jobs. Everything that they create is derived from taxes, which destroys jobs in the process. Government itself does not create jobs; it only creates jobs when it gets out of the way of things.
I will point out that funding public transport infrastructure through value capture is a very interesting idea. Might I point to what many consider to be the best public transport system in the world, which is in Japan, particularly around Tokyo. They fund their systems through value capture – except it is not the taxpayers that take the risk on the value capture, it is the private sector. The private sector takes the risk in building these things. If they develop an area and turn it into apartments and commercial real estate thrives, then they take the risk, not taxpayers. In fact the taxpayers do not pay a cent for any of this stuff, because the value capture is handled by the private sector. The private sector takes the risks, the private sector manages the train lines, and they have some of the best in the world. The idea that the current Labor government in Victoria is going to somehow manage that through government and do a better job than the Japanese private sector does is fanciful at best. I have got lots to say about privatisation of public transport, but we will save that for another day.
We are in a very serious situation in Victoria. This motion mentions credit ratings. There has been lots of back and forth about credit ratings, but I would point out how dire the situation will be if we do get a credit downgrade. I am certain that the Treasurer is very well aware of this, and the government must cut back spending. They must get our balance sheet in a better order. This motion talks about spending money on other things. The government has got to stop spending so much money, because if we get into a situation where our credit rating is downgraded, that means that the Treasury Corporation of Victoria will have to issue bonds with higher coupon rates, because they will be downgraded, and eventually we will get to a point which I dread. People buy these bonds primarily for superannuation funds; last time I checked there were about 17, 20 per cent of foreign investors that were investing in these bonds. But primarily it is for superannuation funds, and they have very strict limitations on the types of things that they can invest in in their fixed interest portfolios. Once a credit rating slips below a certain level – it is different for each super fund; they have their own governance guidelines – they are no longer allowed to buy those bonds. If we in Victoria manage to somehow get ourselves into that state – and I am sure the Treasurer is very aware of this risk – then we will have institutional investors that will no longer buy Victorian bonds. We will be in a very, very dire situation. We cannot allow the state to get into that situation.
I note that the opposition has been attacking the government for talking about privatisation and things like this. I encourage the government to look at everything it is possible to privatise, because we are in a situation where we need to get the balance sheet in order. If there are services that can be privatised by the government to get our balance sheet in a better situation, then I urge the government to go ahead with it and do it, because we cannot allow our credit ratings to fall any further than they have. Look, I know that the government is very aware of this, I am certain that the Treasury is aware of it, but we absolutely must pay close attention to it. We know from looking at other government projects they have gone over budget; we have seen all sorts of problems with this. Credit ratings agencies clearly are going to be looking at this because it has been a significant part of government expenditure over a very long period of time. The government talks about creating jobs – well, I have not seen a lot of action on what we are doing to make sure that organised crime stays out of the construction sector yet. I have seen people talk about inquiries and things like this, but how are we going to make sure that organised crime stays out of these construction projects? Because I do not see much action yet. I see a lot of people saying, ‘Well, we’ve got administrators taking over unions, and we’re going to have these inquiries and stuff like this,’ but we are still rushing ahead with these construction projects. I would like to see the government at the very least tap the brakes on some of these things and get these things in order so that Victorians – Victorian taxpayers – can be absolutely certain when these projects go ahead, when they are undergoing their construction phases, that we are not going to be infiltrated by organised crime, that we are not going to be using these projects for money laundering and God knows what and that the money is being spent prudently, because ultimately it is the Victorian taxpayers that are taking the risk here. As I said, I would prefer the private sector to be taking the risk, but that is not the case; that is not what the government is doing.
I will not be opposing this motion. The Libertarian Party policy was to not go ahead with this project, not because we do not think that infrastructure is a good idea, but because we think that the method the government has chosen of funding this infrastructure is very flawed, and I think that the idea that the government is going to be somehow able to better manage value capture than the private sector is fanciful. Nevertheless, the government has already entered into some contracts. Calling for the immediate cancellation of the project – I do not know what the consequences of that are, and I am not sure that people in the opposition know what the consequences of that are, and maybe most MPs in the government do not know what the consequences of that are, but I am certain that there are termination penalties, and I do not know how serious that would be. Maybe we need to tap the brakes on this at the very least, so at the very least I urge the government to slow this down, maybe pause it for a bit until we get things under control, until we understand what has actually been going on in corruption in the construction sector and maybe get a better idea of what the long-term financial viability of this is.
That said, I am not enthusiastically supporting this motion, but I will not be opposing it. I urge all members of this chamber to seriously consider the consequences. If the state’s credit rating is downgraded, it has the potential to be catastrophic.
Evan MULHOLLAND (Northern Metropolitan) (14:48): I rise to speak on Ms Crozier’s excellent motion regarding the Suburban Rail Loop and regarding the state’s credit rating agencies. We saw Ms Terpstra give quite the spray, and she spoke about – what was it? – rinse and repeat and Liberal talking points over and over again. They were running exactly the same talking points as the last Suburban Rail Loop (SRL) motion, which keep mentioning a quote from Prime Minister Anthony Albanese saying this is one of the most exciting infrastructure projects going around in Australia. They have all got it on their talking points, the quote from the Prime Minister. There is one problem with those quotes from the Prime Minister Anthony Albanese: he never actually said it as Prime Minister of Australia. Anthony Albanese has not had one good word about the Suburban Rail Loop since he became Prime Minister, and we all know why: because this project does not stack up. Ms Terpstra also spoke about cost blowouts – ‘Oh, we don’t have any cost blowouts.’ The feds had to sink $3.5 billion into the North East Link because of the state government’s $10 billion blowout on it, so you do actually have blowouts.
The motion before us highlights a critical issue – the threat of a credit rating downgrade from AA to AA-minus – and the Allan government continues to push ahead with the Suburban Rail Loop without securing additional funding. It does not have the funding from the federal government. Standard & Poor’s is one of the most revered and listened to credit rating agencies in the world, and there was a stark warning from Anthony Walker from Standard & Poor’s. I know Ms Terpstra said we do not need to talk about cost blowouts – ‘There’s not going to be any cost blowouts.’ She also said it was completely within the estimated budget. Well, Standard & Poor’s disagrees. They said:
… there’s a real risk the SRL may cost more … given the size and complexities … and the state’s recent history of major projects going well over budget …
I know who I would rather trust: Anthony Walker from Standard & Poor’s over Ms Terpstra every single day of the week. The Suburban Rail Loop means plunging Victoria into a deeper financial hole than the one Labor has already tried to bury us in. This is about Victoria’s financial future.
The Suburban Rail Loop was not on any Public Transport Victoria development plan. You know those plans that experts and cross-agency departments come up with to map out the future of Melbourne? Instead of looking at those and looking at the next project in the queue, where it is most needed in our growth areas of Melbourne that are going to be attracting population growth, the SRL was conducted in secret, we know, down at PwC – tax-evasion city – in a locked room. The department secretary did not even know about it. This is scandalous behaviour from this government. The Premier was the minister responsible at the time and pushed ahead with this project without even releasing a business case.
We know that Infrastructure Australia is still after information from the government. They have been asking back and forth, they have been contacting the Suburban Rail Loop Authority and they have been contacting Minister Pearson.The Age has confirmed Infrastructure Australia has not received any further information since September 2022, preventing it from progressing to a full analysis:
Infrastructure Australia is ready to assess the Suburban Rail Loop Authority’s next submission in line with our assessment framework once it is received …
They have not even done their homework. They sent through a sloppy business case to start with that did not have the detailed figures and analysis that they actually expected. And the Auditor-General has already exposed a cost blowout of up to $6.9 billion on the Suburban Rail Loop East alone. I trust the Auditor-General much more than this government.
They talk about how Victorians have voted for it twice – Victorians did not vote for 60-storey towers. Victorians are now receiving the detail of what the SRL means, and they do not like it. But I will tell you what, member for North-Eastern Metropolitan, and I am sure they will all say the same things: there are a lot of things that have been voted on twice that this government has not delivered, like the Western Rail Plan, providing electrified rail services to the good people of Melton and Wyndham Vale; like the Geelong fast rail – where is that going? There are a lot of things happening, but trusting this government, for the Western Rail Plan they will probably just put a fence up around Melton station like they did with the Melton Hospital and say ‘Coming soon’ right before the election. You cannot trust this government with election promises. We need to prioritise the immediate needs of Victorians in our growth areas, like the Upfield line duplication, which was put to the back of the queue. Connecting the Upfield line to the Craigieburn line was put to the back of the queue. Fixing potholes was put to the back of the queue; Broadmeadows railway station upgrade, back of the queue; duplication of Donnybrook Road, back of the queue; rail line to Wollert, also to the back of the queue.
Last week we saw a comrade known to many on that side – Kos Samaras, their former deputy secretary and the other half of Minister Spence – speak about the SRL. He was all over the media desperately trying to warn his comrades how poorly this vanity project is now being received by Victorians. ‘It’s not a must-have,’ Mr Samaras told the Herald Sun. He went on to add that voters in the western suburbs genuinely feel abandoned by Victorian Labor, and I tell you what, having gone around the west a lot and the outer north, they certainly feel that way. They are not getting the same amount of infrastructure that other suburbs are getting. It is not just voters concerns that Mr Samaras has warned his comrades about, he has even sounded the alarm bell on Victoria’s exploding debt. He said:
We’re almost dealing with two different planets …
This is not the world it was in 2018, I would agree with that. And it was not just Mr Samaras contributing in the media, it was also Labor MPs:
One senior government source said there was now no doubt the project would be rephased.
Another said the move was not partisan, but a win for Victoria because it would keep credit agencies at bay …
I tell you what, Mr Galea and those on that side: I cannot wait. Once you actually have come to your senses and ‘rephased’ this project, or cancelled it, I cannot wait to come back in here and read every single receipt of every single talking point you have said talking this scandalous project up that was dreamt up at PwC without any experts supporting it and that you have plunged onto the Victorian people, putting our credit rating at risk and neglecting our growth areas, which are not getting the infrastructure they deserve.
People in Kororoit cannot even get a bus. You are building in new estates and not funding bus services. You are not funding public transport connections, but you are building a gold-plated Cheltenham to Box Hill train line between two existing train lines – and you think there will not be any electoral consequences for that? I tell you what, Mr Galea, there will be electoral consequences for that, because every day I am going out into the growth areas and people hate the SRL. I am in the seat of Kalkallo quite a bit. I was at the Wallan markets a few weeks ago, and the SRL is not well liked up there, I tell you what. It elicits some very, very strong reactions, some of which I cannot say in this chamber. Going into Kalkallo and talking up the SRL is like me over the weekend going into a pub full of Carlton supporters with my St Kilda jumper on. People hate the SRL, because the good people of Wallan, of Craigieburn, of Melton and of Wyndham Vale deserve the infrastructure everyone else gets. You have set a 300 per cent housing target – mandatory, compulsory housing target – for areas like Wallan and Beveridge and provided no additional money for infrastructure. People in Yan Yean cannot even get Yan Yean Road stage 2; it is not funded. Yet the government wants to continue with a $35 billion – it will be more – rail line between Cheltenham and Box Hill. It is absolutely ridiculous. It is scandalous, and it is plunging Victoria into a deeper state of debt.
In another area, the second half of Mickleham Road, the government has approved the Craigieburn West Precinct Structure Plan against the advice of Hume City Council and the local community – 10,000 more homes along a road that is single lane with no additional infrastructure. It is going to end up like another Kalkallo, where they have built tens of thousands of homes along an old farm track and thought, ‘Ah, we don’t need to spend any money.’ You do. You need to fund our growth areas. You are not. Instead you are spending all this money on a vanity project of the Premier’s making and of PwC’s making that no expert ever authorised and no expert ever supported. So we do need to take serious consideration of this motion, of our credit rating and of the disastrous consequences a credit rating downgrade will bring.
Michael GALEA (South-Eastern Metropolitan) (14:58): Once again I am delighted to speak about the terrific Suburban Rail Loop (SRL) project – indeed a visionary project that governments of many stripes before have failed to see the vision of. I will just start with one point: I find it quite bizarre that Mr Mulholland thinks that the role of government is to blindly follow whatever the departments tell you. The role of government is actually to bring up ideas, to take them to the people with something called a mandate and then to implement them. I know that you referenced the Public Transport Victoria development plan, but your suggestion that governments should only be there to do whatever the bureaucracy tells them to do betrays quite a striking attitude which you would take to government. In fact it was the attitude that your side took to government last time, which one wit in the Age last week described as ‘ruling in a state of inertia’.
Victorians know that this is a government that is delivering. Whether it is the schools, the hospitals, the new roads, the new bus routes, the public transport projects or the level crossing removals, this is a government that is delivering for Victorians, especially in the outer suburbs. I enjoy my debates with Mr Mulholland in this place about the outer suburbs. There is probably not a great deal that we agree on, but the one thing that we are both passionate about is our growing outer suburbs of Melbourne, and I do respect him for that.
We are doing all sorts of things, and we can go tit for tat and example by example. I can run you through all the new schools that we are building right now in Clyde North. I will admit I am not quite across the detail in other electorates, but I know that there are new schools, new projects and new roads going in, and in Clyde North, for example, where we are building new school after new school after new school, three have already opened and three are opening next year. One of those existing schools opened a few years ago with 400 students – a big number – and this year it reached over 1300 enrolments. They can manage it – just – but without this new school coming online next year, which we are delivering, they will not be able to cope. We are doing those investments.
It goes to a fundamental principle, a fundamental point, that whoever is in government at whatever time we are talking about, must take a long-term view. We cannot sustainably or economically afford to continue growing our suburbs out and out and out and out; we have to be more sensible, and that is exactly where the housing statement, for example, comes in in redressing the burden that outer suburbs will have to take on. We need to continue investing in the outer suburbs – and we are; this government is doing that – but we cannot keep going at this pace, because to use that school as an example, for all the investment that is going in we are barely keeping pace. We are doing everything we can, but we need to think better.
The Suburban Rail Loop is a terrific opportunity for us to refocus the way we do planning in this state, and that is exactly why it is a good project. The benefits for people I have spoken extensively about. For those in the outer south-east they include accessing Monash University, Deakin University and all the job centres across the south-east region – not just on those Pakenham and Cranbourne line corridors. That is why the project is so important.
It is so important too for the appropriate, sensible infill development that we can be doing along the Suburban Rail Loop corridors. We know that the Liberal Party is the party of nimbyism writ large. We have seen it in contributions from Mr Welch, and Mr Davis yesterday in fact was complaining about development in Camberwell Junction of all places, a place that is served by three train lines and three tram routes – the 70, the 72 and the 75. What the Suburban Rail Loop is going to do –
Michael GALEA: in your place, please – is provide that cross-grid connection with heavy rail connections at Box Hill, at Clayton, at Cheltenham and at other major points along the way as well, providing those transport services and providing the capacity to build more sensible infill development, because that is the future for Melbourne.
The future for Melbourne that the Liberals would see is more and more pressure on the outer suburbs. When you come into this place, Mr Mulholland, and say that you are opposed to the SRL, what you are saying is that you want more housing pressure to be placed on the outer suburbs of Melbourne and you want more of those issues to come up. That is what you are ultimately saying by opposing what are very important and very transformational projects.
I will draw a quick comparison. We know they opposed the Metro Tunnel, they opposed North East Link, they opposed this project and they opposed level crossing removals.
Michael GALEA: I will take your point on that, Mr Mulholland – maybe not North East Link. In New South Wales we had bipartisanship where the Liberal government actually invested and actually believed in railway infrastructure and delivered the Sydney Metro, which has now been opened under the Labor government. We have seen both sides actually acknowledging that, yes, this was a Liberal project and is now a Labor project, and it has received broad support. Unfortunately, we cannot say that in Victoria, because the Metro Tunnel – you do not support it. You would have sent it around some weird little loop around Fishermans Bend that was nowhere near Fishermans Bend, that would have sent it back, that would not have actually served all those new areas and that would not have actually benefitted the main corridors that the Metro Tunnel will benefit. Victorians know that this is a government that gets on with delivering.
I have spoken to many of the terrific MPs that we have right along the corridor, including Mr Hamer, who speaks to lots of constituents in his area about the SRL and the broad support there is for it. I gave you the example of the school in my electorate before; there is actually at least one or two schools in the Box Hill electorate where they are significantly under their capacity with enrolments, and they are actually trying to get students from elsewhere. This is exactly why we should be doing more appropriate, more sensible infill development in places like this. Again, Mr Hamer is a terrific local member. Keep bringing these motions on, Mr Mulholland, and we will indeed welcome him back to the Parliament in the next term and then three or four after that as well if you continue to oppose this project. Locals in Box Hill know, and that is because Mr Hamer actually does speak to them. I know, Mr Welch, you know that because you have a penchant for screenshotting Mr Hamer’s posts when he is out there talking to the community. He is actually talking to real people, which is really great. It is different to perhaps getting a photo with supposed community campaigners opposed to the SRL who just happen to be former Liberal Party candidates. Mr Hamer is actually out there talking to real people.
Most importantly, we know that we need it because Monash City Council have spoken out very much in favour of this project. They will be at the heart of this project in the heart of the south-eastern suburbs. And indeed at Monash University, Australia’s largest university campus, there is incredible medical research that is going on in and around the Monash University precinct that is supported by that university, our largest university. I know this will be of interest to you, Mr Davis. It is in your region, although it services my region as well in the south-east. They are desperate for this project. They say they have so many grand plans that they cannot do unless they have a proper fixed rail connection. Monash University sees the benefit, and the Liberals would hold them back. I am actually quite passionate about supporting our university sector, and I may have something else to say on that later this day, but when it comes to this project –
Michael GALEA: Just like I said, I will come back to it. But on this project, this would be the same as putting that cap on Monash University. I want to see Monash and Deakin too for that matter – and when it comes time for it down the track La Trobe University as well – supported to continue their potential. Again, with the work that Monash does – and I note their advocacy on this issue amongst others – it is a very, very important thing.
We know when it comes to projects this is a government that comes in – and as I said, those opposite do not understand what the word mandate means. For example, it does not mean coming into office in 2010 and basically doing not much at all but the one thing that you do do after telling people in 2010 that you are going to put a moratorium on new freeway projects is then locking the state into a massive multibillion-dollar freeway project just weeks out from a state election. That is not a mandate. That is not a mandate at all, and you know it. So when you come in here and say that people do not want the Suburban Rail Loop, well, they have voted not once but twice on that project and Victorians have emphatically endorsed that. Indeed they have endorsed it in the electorates which will be most affected, such as Glen Waverley and Box Hill, and despite whatever you want to say, you know that to be true. We even had former Prime Minister Tony Abbott try to call the federal election in 2013 a referendum. Never mind that though he formed the government federally he certainly did not win the majority of seats in Victoria. He did not win the majority of votes in Victoria on a two-party preferred basis. I am sure people in rural Queensland were not making their vote centred around Victorian infrastructure projects, but it had been rejected. Yet the Victorian Liberal Party proceeded to lock the state into a project that it had not taken to the previous election in a deliberate political attempt to try to cause a political issue for the incoming Labor government, irrespective of whatever damage it did to the state’s budget.
But this is a government that is not interested in playing stupid games like that. This is a government that is interested in delivering, and that is why we have got 110 level crossing removal projects underway, with 80 already done. They said it would not be possible. We are getting on and we are doing it. Metro Tunnel is opening next year, a year ahead of schedule. With the Suburban Rail Loop we will be unlocking –
Georgie Crozier: What? No, it’s not.
Michael GALEA: It is. It was 2026, it is now 2025. You know that to be true as well.
Richard WELCH (North-Eastern Metropolitan) (15:08): It is my pleasure to rise and speak on the motion in Ms Crozier’s name, motion 550. Honestly, I do not think I have heard a more unhinged debate in my short time in here. We have had Ms Terpstra talking about how the state debt will be addressed by the ability of tradies to buy coffees. We have got incredible business disruption, but do not worry, tradies are buying coffees, so our $187 billion of debt will be okay! That is productive capital, apparently. The question I would ask across the chamber is: where do you think this is going to end? Because there is only one way this is going to end: either the project is going to be paused or it is going to implode. You have got the choice. Either it is going to implode or you pause it. Make your choice now, because every day that you delay that choice you are going to cost this state and the next generation more and more and more money. This project has been absurd from the start. It starts with their reckless funding model: 30 per cent from the state, 30 per cent from the federal government and 30 per cent from property speculation, aka value capture. Now we know that the federal government is not going to provide that 30 per cent. That money is not coming. Even the $2 billion set aside has not been delivered and will not be delivered. Infrastructure minister King has said they are not giving them money into they have seen the business plan. Is the business plan coming? I do not think it is.
Most absurd is this value capture model. The whole purpose of value capture is that you get property before it has gone up in value then tax the hell out of it once it has gone up in value. Well, within Box Hill the single largest development in the entire Suburban Rail Loop precinct, the Vicinity project, has already been contracted in and priced in and is underway. So at what point does the value capture kick in? Does it kick in now? No. Does it kick in in 10 years? No. Does it kick in ever? We do not know, because there is no formula. The minister has not been able to explain what value capture means, and the horse has already bolted, because how much of the value of the properties along the route of the line, including the precincts, has already been priced in? You only got two choices at this point: you either intensify the development or add further taxes. The government have already got form on intensifying the development, because when they went to the election, twice, there was no mention of high-rise – none. By December last year it was 20 storeys. ‘Oh, we don’t have enough money.’ In March this year it was 40 storeys. In June this year it was 50 storeys. So they have clearly aimed to intensify the level of development to make up the shortfall in value capture that they have no other means of funding – none.
The community, including Whitehorse council, were deliberately and purposely shut out of the entire negotiation process and told from on high that in a council area where they have 74,000 properties they are required to add 79,000 more within the same footprint. Just consider that. That is not providing people choice in accommodation, because the only way you can actually achieve that is to build tower blocks. They are not aiming for home ownership for young Australians; they are aiming for flat ownership. That is all you are aiming for. You want people in dog boxes so you can fund this fantasy project. And the questions arise: when does the value capture kick in? Does it kick in now? Does it kick in in 10 years? How are you going to fund this project until it does? How can you? You have got no explanation. There is $10 billion not available from the feds, $10 billion not available from value capture. There is your own money that you have put us all on the line for, and you continue to sign contracts.
There is a certain level of deceit in all of this, because why in the budgets is the total cost of this listed as ‘To be confirmed’? Why in Infrastructure Australia is it listed as ‘To be confirmed’? $34 billion alone is 10 per cent of the entire Infrastructure Australia budget for the next 10 years. That is 10 per cent for the whole nation – extraordinary. There is no business case, and I have got a suspicion why there is no business case: because if they were to present a business case to Infrastructure Australia, they would have to actually come clean and say, ‘This is not going to be $34 billion, it’s not going to be $40 billion; it’s going to be $50 billion or $60 billion.’ There is ample evidence of that. North East Link is a 9-kilometre tunnel. It is presently costing us $26 billion-plus for 9 kilometres. The Suburban Rail Loop is 27 kilometres, and it is going to cost, allegedly, $34 billion. The Suburban Rail Loop has a much more difficult route to traverse – it has to go through a number of contaminated sites; it has a number of engineering challenges way beyond the North East Link – so the idea that it is $34 billion is I think a ruse. The reason there is no business case being issued is because that would expose the ruse.
The other obvious problem with this is the opportunity cost of miraculously quarantining $40 billion in an already distressed budget for this purpose and this purpose alone at the cost of health. In my electorate just last night Box Hill Hospital went to code red at 10 pm. Waiting hours in the emergency department were in excess of 9 hours. Across health we have cut cancer treatments. We are cutting billions potentially out of the health service, yet we quarantine this concrete tunnel. People do not get healed in tunnels. People do not get housed in tunnels. They do not get educated in tunnels. Across my electorate schools have facilities that are long past their economic life, where schools themselves have to fund their own playgrounds. They have to fund portables coming in. The parents themselves have to fund the STEM resources and things that are built for the future. Why? Because the Treasurer, bizarrely, chose to quarantine a concrete tunnel over the lives of people in everyday suburbs.
I think the gravest sin of all is that through debt we are locking this generation’s and the next generation’s productive capital into a nonproductive purpose. This tunnel will not generate wealth. In fact it will run at a loss because a significant part of the $216 billion cost is operating cost. No-one can tell me that fares will make up $60 billion. $6 billion a year in fares – it is a fantasy. It is only possible when you have a union industrial complex driving economic decisions in Victoria. We will suffer generational loss of generational productive capital, meaning the wealth of Victoria will decline because we have locked up this capital. As Mr Limbrick said, in my view we should get it off our books, we should conduct budget repair and we should claw back what capital we can so that we can put it into productive purposes. I can tell you now, though, we are not getting one dollar to the dollar. We would be lucky to get 30 cents to the dollar if we sold it off. This project does not stand up, because if it did, the private sector would be doing it.
There is also the other dimension where we can talk at length of how the rest of Victoria is missing out as a consequence of this project, but it is those communities along the route of it who are missing out as well. The intense overdevelopment is extraordinarily bad suburban development, suburban planning and suburban design. It is going to mean 10 years of disruption to businesses, who will leave perhaps never to return. It is in fact a concrete noose around the circumference of Melbourne, cutting a swathe through these suburbs. There is no talk of extra school capacity. There is no talk of extra sewerage or electricity capacity. There is no talk of extra parking capacity for the 70,000 or 120,000 people who are coming, of which 15,000 or more will be children. All the schools in that area are already at capacity. There is no plan about that. Where does that come into the calculations? As always people are the last consideration in these areas.
The government has a choice: to make a graceful exit or a graceful pause now and save what money it can or to let this project implode and cost us even more. ‘Graceful’ I put in inverted commas because there are contracts signed that are going to be liabilities, but everybody knows you do not put good money after bad. Whatever loss we have to bear we need to bear it now. I am just so glad that everybody over there is on the record supporting this because these words will come back to haunt you, and I will make sure they do.
Ryan BATCHELOR (Southern Metropolitan) (15:18): Where do you start? Anyway. ‘An underground folly’, ‘a wasteful investment’, ‘a white elephant’, ‘not needed’, ‘Our population could never grow enough to justify the investment, to justify the cost,’ ‘We can just fix it with more buses.’ That was a campaign waged against a project by one of Melbourne’s daily newspapers for a decade – that is what they said about the city loop in the 1970s. Fifty-three years ago, when plans were made to build underground rail in the centre of Melbourne, sections of the community in Melbourne, parts of the intelligentsia, storied academics, could not imagine that Melbourne would need an underground rail line. They questioned the ‘folly’ – their word – of the government investing in that kind of infrastructure, because they could not imagine us ever needing it. I challenge anyone to stand up in this debate and say that the naysayers of the city loop were right. They were not. They were wrong, just as those who have been standing in this chamber bloviating against progress are also wrong today.
What people could not imagine back in the 1970s turned into a reality in the 1980s and became unimaginable to be without in the 1990s and the 2000s. But by the turn of the century, a mere 30 years later, it became clear that it was not enough and that despite all the work, despite all the planning, despite the revolution that the city loop brought to Melbourne’s metropolitan train network – something that a major metropolitan daily newspaper in this city campaigned against day in, day out, that special levies were raised to help pay for, that the state borrowed to fund – that loop was at capacity. Melbourne’s productive capacity was being constrained by the constraints of a piece of infrastructure about which 30 years earlier people had stood up, I suspect in a manner similar to those who contributed to the debate today, and said – probably as red in the face by the end of their contributions back then as people have been today – that we just do not need it and it would be a waste.
No-one is saying that about the city loop these days. In fact that important part of Melbourne’s transport infrastructure today was at capacity, and we needed to build a new underground train line through the city, the Metro Tunnel, which is fully funded by this Labor government and constructed by this Labor government and next year will be delivered by this Labor government, which will revolutionise the transport network here in Melbourne, freeing up capacity on other metropolitan train lines, bringing more people into our fixed-rail transport network, moving more people across Melbourne from the northern suburbs to the south-eastern suburbs, transforming the way our public transport network works. It happened with the city loop when they planned it in the 1970s and opened it in the 80s. We planned it with the Metro Tunnel, which has been built over the course of the last decade and will open next year.
What this motion seeks to bring to the fore of the debate is the suggestion that we should repeat the mistakes of the past by not investing in the infrastructure we are going to need in the future. Just because something is not within the conception or the vision of those who like to say no to everything, just because there are some who are so short-sighted they cannot see the need to continue to invest in our public transport infrastructure, just because some people cannot imagine what Melbourne might be like in the next generation, they are saying we should do nothing. They are saying –
Richard Welch: Differently.
Ryan BATCHELOR: Differently. Well, what would you do instead, Mr Welch?
Richard Welch: Buses.
Ryan BATCHELOR: You would use buses. There we go – just as the way they said that we did not need the city loop because we could run more buses in Melbourne. Can you imagine? Can you imagine if the Liberal Party today had any influence over the Liberal Party of the past? We know the Liberal Party has changed. I think there is no greater evidence that the Liberal Party of today are nothing like the Liberal Party of yesterday – absolutely nothing like it – because they think that our public transport constraints can be solved by putting more buses on congested roads. That is their solution. They have no vision for this state. They have no understanding about how transport infrastructure planning needs to work. If they had their way, we would be building nothing, ever, anywhere. That is exactly the path that they want to take us down.
The speakers in this debate from the other side have traversed a wide range of topics – I will not go through all of them. They have decried on several occasions the need to invest in the future of our city. Labor does not support that notion. We believe that you have got to invest in the future of our city. They are opposed to a project being initiated, supported and financed by the government, because they believe that we should just leave everything to the private sector.
Tom McIntosh: Nuclear.
Ryan BATCHELOR: That is a very good point, Mr McIntosh, because the only thing I think they want there to be public sector subsidies in that the private sector will not do is the nuclear industry in Australia, but I will not get distracted by that debate, because I would stand here for another hour talking about the folly of that.
We need to be continually investing in the productive capacity of this city, of this state. If we do not continue to invest in the infrastructure that improves productivity and that means that we can get people and goods across this city in more efficient ways, we will constrain our citizens sitting in those buses – that Mr Welch thinks are the solution – in traffic jams for eternity. No-one will get on Mr Welch’s buses, because the roads will be clogged, because nothing will get built, because no-one will be able to get to the universities they need to get to or to the jobs that they need to get to or be able to live near public transport infrastructure or employment opportunities. Those opposite have got no vision for this state. They have no conception of what this state needs, and we should not listen to a word they have got to say.
Gaelle BROAD (Northern Victoria) (15:29): I rise to speak on behalf of the Nationals, very much in support of this motion. When you talk about what the vision is for this state, we certainly do have a vision for this state, and it is to be a state of cities, not a city-state, which is very much Labor’s approach. It is interesting that Mr Batchelor mentioned Premier Henry Bolte, who still holds the record for 17 consecutive years, and it was the city loop rail that was a vision in 1969 as part of the Melbourne transportation plan. They had a plan, but boy oh boy, are we in a very different environment today, because under a decade of Labor we now have absolute record debt – the highest of any state in Australia. We are now heading towards nearly $188 billion of debt within a couple of years. This is extraordinary. The Herald Sun has reported about our credit rating. Standard & Poor’s analyst Anthony Walker has expressed concerns about the estimate. He said:
That would see the state reduced to a record low AA- rating – three notches down from AAA in 2020 – and would mean increased borrowing costs of between 0.1 per cent and 0.5 per cent at a time when the state’s debt is ballooning.
This is the state we are in at the moment. This government is putting all its eggs in one basket. You look at the major projects that have been done by this government, and the track record speaks for itself: over $40 billion absolutely wasted in cost blowouts. When you look also at Labor’s state budgets and what has been spent in regional areas compared to Melbourne, regional Victoria has about 25 per cent of the population, but under this government state budgets have had about 12 per cent to 13 per cent of new infrastructure spent in regional areas. To think that yet another major project is going to be focused in Melbourne, with the Suburban Rail Loop (SRL), is extraordinary.
Where could that money be going? What else could that money be going to? Well, I will tell you: to things that have been a priority for some time – infrastructure projects like the Kilmore bypass, which remains yet to be done; and the Shepparton bypass. We have got a bridge in Yarrawonga – a major bridge with significant traffic flows, 100 years old this year – that needs to be redone. Then we have got roads under this government that are underfunded: 91 per cent, according to the state government’s own survey, are in poor or very poor condition. I have spoken in this house about intersections that need to be upgraded. We do have significant concerns; we saw that in the RACV survey recently. Seven thousand residents submitted to that survey and showed that actually one of the worst, most dangerous intersections is in the Premier’s electorate, yet nothing has been done to improve the safety at that intersection.
We know hospitals are under significant pressure at the moment. Bendigo Hospital was asked to find $120 million in savings in its budget. We have got a police force that is struggling – 700 vacancies we have had and stations have had to close their doors and reduce their hours, yet at the same time we have got significant crime issues right across the state. I know for a fact that Bendigo residents are concerned by the significant rise. We have a need for regional infrastructure with public transport. I have spoken recently of Strathfieldsaye; it does not even have a bus service on a Sunday – not a single bus service. I have also raised concerns about the need for additional bus services to Marong, a growing suburb just close to Bendigo.
We know that interface shires are facing significant rapid population growth, and they spoke at the local council inquiry recently about their need for more infrastructure to support this population growth. The Victorian Parliamentary Budget Office has given us figures from 2021–22, and when you look at Melbourne the amount spent on investment was $15,268 per head versus $7142 in regional areas. I know from speaking to regional councils as well that it is very expensive to build infrastructure in regional areas. This is what needs to be considered, as we are putting all our eggs in one basket. Population growth is going to rise dramatically in regional areas. In 2021 it was 1.6 million people; by 2051 it will be 2.3 million people. This government does need to look at what is happening in the rest of the state, not just Melbourne.
Mr Galea talked about the SRL being a visionary project. I would call it more like a mirage, because there has not been a proper business case. They went to two state elections without telling the truth and the reality of this, which is going to be a significant burden of debt on our state for future generations. We are the highest taxing state in Australia. We cannot keep taxing ourselves out of this debt. It is 114 weeks until the next state election, and it cannot come soon enough.
Georgie CROZIER (Southern Metropolitan) (15:34): I will take a few moments to sum up on my motion. It has been an interesting debate to hear those backbenchers from the government trying to argue the case around this flawed project. It is a project that is going to saddle generations of Victorians with this enormous debt. $216 billion of money going into this project at this time is not the priority that the government should be focused on. They keep talking about issues around moving people around the city, but it is not going to help people in the northern or the western parts of our city.
The first part of this Suburban Rail Loop, which has already blown out, does not have the federal funding. Ms Terpstra was carrying on about the government giving $2.2 billion – well, that is way short of the blowout of somewhere in excess of $35 billion, and the estimates are more like $50 billion for this. You cannot do these projects on a hope and a prayer. It is irresponsible of the government to pursue this at this time. We just do not have the economic capacity to do it, and that is why I say again that the government backbenchers who have been rolled out to argue against this important motion have no clue. They did not even understand Standard & Poor’s concerns. They did not even reference that. I want to say again – this is what Anthony Walker said:
… there’s a real risk the SRL may cost more … given the size and complexities of the undertaking and the state’s recent history of major projects going well over budget …
He said:
If Victoria pushes ahead with the Suburban Rail Loop without additional federal government funding, the state’s fiscal outlook may weaken, further eroding its credit standing …
When that happens, that has a massive flow-on effect to every part of our economy, and this is something that the government just has not grasped. They do not understand. We had that ludicrous suggestion of productivity – that what is good for the economy is getting cups of coffee and sandwiches at the local level crossing removal, for God’s sake.
Georgie CROZIER: It was an embarrassment. I mean, these people have got no clue. If any Victorian was watching this debate, they would be horrified about the lack of understanding of how a budget works or how an economy operates. And what is so terrifying is that in the government many of them have never worked in the private sector, so they do not understand risk management. They do not understand actually balancing books. They have all just taken taxpayers money and are blowing it because they do not have any responsibility or accountability for it. That is a tragedy, and that is why we are in this dire situation that we are in. That is why Standard & Poor’s took the unprecedented move to speak publicly about this.
Georgie CROZIER: Unprecedented, Mr Welch. It was an unprecedented move to come out and speak publicly about this project. This is a very serious situation. It is nothing to be laughing about, like those that have been laughing throughout the debate, with their incredulous, outlandish and stupid statements. It was just extraordinary.
There are young people in the gallery who are watching this debate. It is those children in this gallery today who are going to be saddled with this intergenerational debt. I do not want them to have this debt. It is those children’s future that we are debating, and it is going to be ruined if this state is absolutely downtrodden because of the reckless decisions by the Allan Labor government. Those children deserve to have a great future. They deserve to have services that can be delivered to them, like health, like education and like community safety. As I said, it does not matter where you live in Victoria, you should have access and not just be confined to one project that is going to cost hundreds of billions of dollars in one tiny part of Victoria. I urge all members, for the sake of those children that are in the gallery today, to support my motion.
Council divided on motion:
Ayes (17): Melina Bath, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Renee Heath, Ann-Marie Hermans, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Evan Mulholland, Adem Somyurek, Rikkie-Lee Tyrrell, Richard Welch
Noes (22): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Enver Erdogan, Jacinta Ermacora, David Ettershank, Michael Galea, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Samantha Ratnam, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Sheena Watt
Motion negatived.