Michael Sukkar MP

Federal Member for Deakin.
Minister for Housing & Assistant Treasurer.
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Speaking on the Appropriation Bill (No. 3) 2014-2015



It is an honour to speak today on Appropriation Bill (No. 3) 2014-2015 and cognate bills. Given the wide-ranging nature of the debate, I want to focus on an issue of paramount importance to not only my electorate of Deakin and the state of Victoria but, increasingly, all Australians and that is the progress of Melbourne’s East West Link. I refer to the abysmal way in which that project is now, purportedly, being handled by the state Labor government and, unfortunately, the way in which that project is being treated by the Leader of the Opposition, given some comments that he made earlier today, which I will refer to a little bit later on.

For those who do not know, the East West Link is the most important infrastructure project, in recent memory, in Melbourne. It is a cross-city link that will basically enable the free flow of traffic from, as the title would suggest, the east to the west of Melbourne, saving commuters in my electorate of Deakin and, indeed, all throughout Melbourne, up to three hours of travel time a week, enabling the free flow of goods from our major port to the eastern suburbs and indeed the western suburbs of Melbourne and also the free flow of all goods between small businesses operating in Melbourne. So it is, absolutely, a productivity-enhancing piece of infrastructure. It is also a piece of infrastructure that will improve the lives of Melburnians who are living in an ever congested city. With a population set to grow quite significantly in the years to come, quite frankly, it is a project that will be catching up on work that should have been done previously.

I was very fortunate to be able to secure $1½ billion before the last election for stage 1 of the East West Link, which was really the federal contribution that unlocked the ability of that project to happen. We were then able to secure an additional $1½ billion before the election for stage 2 of the East West Link. So, $3 billion of federal funding was committed to ensure that this transformational infrastructure project could go ahead. On the basis of that very generous commitment, the former state government committed, with a consortium, to proceed with the project.

Where we are now is that the project is shovel ready, it is fully funded with contributions committed from the federal and former state governments and, obviously, from private operators. The problem is now, though, that the state Labor Party is committing to tear up the contracts and potentially open up Victorian taxpayers to hundreds of millions of dollars—if not over $1 billion—of compensation not to build the East West Link. It is quite extraordinary. We now have a state Labor government which has said, ‘No thank you. We don’t want the $3 billion the federal government’s committed to the East West Link. And not only are we going to say we don’t want the $3 billion commitment, we’re actually going to cancel the contract that we said before the election wasn’t worth the paper it was written on. We know that was a lie. But we will cancel a contract and pay potentially over $1 billion not to build the East West Link, a piece of infrastructure that the Labor Party has championed for many years, all the way back to 2008.’

In the submissions to the 2008 Eddington review, which was commissioned by the former state Labor Party under John Brumby, there was a very good submission from the Australian Workers Union. The key submitter here was Bill Shorten, the National Secretary. They absolutely supported the East West Link and said it was crucial to the future development of Victoria and was key to the economic prosperity of Victorians.

Bill Shorten, the now Leader of the Opposition was right when he said that. But after he entered parliament in 2008, when he was the member for Maribyrnong, he co-signed another submission, to the East West Transport Options Review, again supporting the East West Link, saying that he and the other members that wrote the submission support a cross-city road link from the western suburbs to the Eastern Freeway. That is called the East West Link.

But, quite extraordinarily, I have been waiting for this moment for a while, because we all know the bumbling Leader of the Opposition just bloviates and waffles and pulls up pointless historical references—as we all heard on John Faine last week—and basically gets through interviews without saying a thing. He has done that on half a dozen occasions, but today he let the cat out of the bag. Finally, he got pinned down to giving an answer. The question asked by a reporter was: ‘So, do you support the building of the East West Link? You’ve written two submissions previously broadly supporting Sir Rod Eddington. Do you now support the building of the East West Link?’ Given the Leader of the Opposition has supported it twice, as correctly referenced by that reporter, and given that he is a man of such conviction who never really changes his mind—he is not known for changing his mind very often—I was wondering what the answer would be. This was his answer: ‘No, not in the current circumstances.’

So there we have it. Mark it in the diary. Today is the day that Bill Shorten, the Leader of the Opposition, notwithstanding his previous strong support for the East West Link, is giving Daniel Andrews and the state Labor Party permission to trash Victoria’s economic reputation and ruin the development of Victoria by tearing up the East West Link contracts. I held very slim hopes for the Leader of the Opposition, because you may not have picked up from my comments when I said he does not change his mind very often that I really had my tongue in my cheek when I said that. We all know that he does change his mind on a far-too-regular basis. Just ask Kevin Rudd or Julia Gillard. I was hoping he would pick up the phone to Dan Andrews and say, ‘Dan, this is not just a Victorian problem.’ Victoria is an economic powerhouse in this country. It represents 25 per cent of the Australian economy. If a state Labor Party is going to trash the economic reputation of the state government and the state in its entirety, this has flow-on implications for the rest of Australia, and for that reason I thought the Leader of the Opposition would do the right thing and pick up the phone and tell him to change this outrageous proposal to cancel the East West Link contract.

But it actually gets worse, because now the state Labor Party is saying that in order to get out of possible compensation that will be payable—potentially over $1 billion—they may legislate to cancel any damages claim that the consortium may have. So we have got the first lie, and that lie was that this contract is not worth the paper it was written on. That is what the state Labor Party said. That is what the Leader of the Opposition supported before the Victorian state election. When that was proven to be a complete falsehood and compensation is definitely payable and most likely over $1 billion, the state Labor Party have said that they are actively considering legislating to ensure no compensation is payable. This has sent shock waves through the investment community, including not only through those investors in Australia but also through international investors. A very reputable publication, Infrastructure Investor, had a front page just a couple of weeks ago. The headline to the article referencing Dan Andrews and the state Labor Party and now the Leader of the Opposition and all of the Labor opposition was: ‘Can Australia be taken at its word?’

The first line of the article says: ‘Retrospective legislation—two words designed to send shivers down the spine of infrastructure investors following the post crisis solar PV debacle in Spain.’ The solar PV debacle in Spain was just another example of a government retrospectively legislating away previous commitments it had made, previous contractual arrangements it had made. The article went on to say this: ‘So why would any other country even think about following suit today? And, more to the point, what would the world’s leading infrastructure market think about it? Those questions are being directed with increasing frequency at Daniel Andrews, Premier of the Australian state of Victoria.’ So we now have reputable publications around the world highlighting that the market and investors whom Australia relies upon for a lot of our development—in particular, our infrastructure development—will not want to touch Australia with a 10-foot pole if the environment is such that a contract legally entered into in good faith is cancelled by an incoming government.

I can assure members opposite that, every time a coalition government takes power, there is a hell of a lot of stuff that we would love to cancel—because we always inherit an absolute mess. In my state of Victoria we inherited a white elephant desalination plant. It is costing us millions of dollars a day and not even a drop of water is coming out of it. We inherited the myki ticketing system on our public transport system which, frankly, is moribund. But so much money was invested in those things that it was not prudent, not in the interests of taxpayers, for those contracts to be cancelled. So we did not cancel them—even though, to our core, we dislike those projects.

But here we have got a project which in addition to the time savings for commuters will also create nearly 7,000 jobs during the construction phase. It will be the economic shot in the arm Victoria needs. Victoria cannot afford to say: ‘Thanks but no thanks; we don’t want 7,000 construction jobs.’ But that is what the state Labor government is doing and that is what the federal Leader of the Opposition has today endorsed. So we are now in a situation where we are absolutely on the edge of it. I know there are a lot of Labor Party people who are shaking their heads at the thought that they would trash Victoria’s reputation like this. I appeal to those few sensible people in the Labor Party to speak to Dan Andrews and the federal Leader of the Opposition and tell them this would be an absolutely disastrous decision for the Victorian economy.

I would also recommend that everybody get behind our campaign. Recently we launched the Build the Link campaign—at buildthelink.com.au—and we got nearly 40,000 signatures in a couple weeks. The reception from the electorate has been absolutely extraordinary. Victorians want the East West Link. They absolutely weep at the thought that the disgraceful Labor Party would spend over $1 billion of taxpayers money not to build a piece of infrastructure that is going to future-proof our city. We are already congested and Victoria is projected to grow quite significantly over the next five to 10 years. This is going to affect the lives of everybody, not just the people in my electorate of Deakin. Sure, the people in the eastern suburbs of Melbourne will be hit hardest. We will be the ones who pay the best price for Labor trying to win over a few inner-city Greens voters. I say to the Labor Party: don’t look at the inner-city Greens voters as your core constituency, look at what is right for all voters—and that includes people who live in the outer eastern suburbs of Melbourne. I say to Bill Shorten and Dan Andrews: walk away from this ridiculous position and build the East West Link.