Senator the Hon Mathias Cormann

GARETH PARKER: This morning the Prime Minister Scott Morrison wants to rev up the economy, nationally, by bringing forward significant spending on transport infrastructure. There is $4 billion nationally. About $860 million here in WA. Do you welcome this commitment from the Prime Minister? Is it what some economists and other commentators have been calling for? That is some stimulus. The Finance Minister is Mathias Cormann. Senator Good morning.

MATHIAS CORMANN: Good morning Gareth. Good morning to your listeners. 

GARETH PARKER: Is this a departure from the economic plan? Is this recognition that the commentators and economists are right, that the Government needs to do a bit more to prime the pub?

MATHIAS CORMANN: No it is not a departure. It is actually us continuing to implement the plan that we took to the last election. We took a $100 billion Federal infrastructure investment pipeline to the last election. We have been saying for a number of months now that we were working with State and Territory governments to explore what projects could sensibly be brought forward. A few months ago, and that that is a matter of public record, the Prime Minister wrote to Premiers and Chief Ministers to invite them to work with the Commonwealth, to identify those projects that could be delivered sooner if there was a bring forward of the necessary federal funding from over the ten year period into the four year period. That is what we have done. Nationally, about $3.8 billion worth of infrastructure investment is now being brought forward, $868 million of that here in Western Australia. The State Government here in Western Australia working with the Federal Government has been able to secure more than 20 per cent of the additional funding to be rolled out nationally over the next four years, more than 20 per cent of that will be rolled out here in Western Australia. 

GARETH PARKER: Ok, we will cover the specifics of the projects in a moment. Are you are saying this is not a moving reaction to the fact that a lot of people feel as though the best thing that your government could do to stimulate the economy is to get spending happening, and spending happening now? 

MATHIAS CORMANN: Our Budget that we delivered in April is a pro-growth Budget. It involved $158 billion in additional personal income tax relief. It involved a $100 billion infrastructure investment pipeline but over a ten year period. In this announcement today we have brought forward a significant proportion of that into the forward estimates period. We are always in a sense dependent on what the States are telling us what they can essentially deliver in terms of the ambitious timetable that we would like to see delivered. 

GARETH PARKER: So there are five particular projects in WA. You’ve got the Albany Ring Road, the Karratha to Tom Price Road, The Tonkin Highway Gap which will be of intense interest to a lot of listeners who know that is a trouble spot every day. That’s the Tonkin Highway going over the Swan River between the Airport and the new North Link and the Port Augusta to Perth Corridor. Bringing forward, this announcement this morning, when will work start on those projects? 

MATHIAS CORMANN: 

In relation to the Tonkin Highway project, we are led to believe that this project can now get underway in 2020, so next year. We are bringing forward another $160 million worth of funding for that project. When it comes to the Bunbury Outer Ring Road, we are bringing forward another $284 million worth of funding. About $83million for the Albany Ring Road. We are also incidentally put in an additional $16 million over the current forward estimates towards the Fremantle traffic bridge upgrade which is also a congestion busting project in the metropolitan area. About $167 million worth of funding is being brought forward for the Karratha to Tom Price Corridor. You mentioned the Port Augusta to Perth Corridor, we are bringing another $41 million forward in relation to that project. 

GARETH PARKER: So, that’s the amounts of money, but my question is when will they start? You said 2020 for the Tonkin gap, what about the others?

MATHIAS CORMANN: Across most of these projects they are expected to start, by the advice we have, in 2020, but some in early 2021. But all of these projects, based on the advice we have, as a result of us being able to provide $868 million in additional federal funding over the current forward estimates periods, we will be able to deliver faster than we otherwise would. 

GARETH PARKER: Right, and I accept the point that you make, as a federal government you don’t build roads, you pay for them and you are reliant on states. That’s true in every state. But the reality is that some of these projects are still more than 18 months away from starting. 

MATHIAS CORMANN: If you want to invest in high quality infrastructure and high quality productivity enhancing infrastructure, first you have to identify the projects that are high quality projects. Secondly you have to plan properly and you have to execute these projects professionally. But all of these projects now will be able to happen more quickly, based on the advice that we have received from the State government, than they otherwise would if it were not for additional federal funding. But yes, if you want to invest in high quality productivity enhancing, economy enhancing infrastructure for the future, you do need to roll that out in an orderly fashion. There is always a timetable involved, there is no question about that. 

GARETH PARKER: Yeah I mean I agree with that, you don’t want to rush major projects, because that’s how you end up with cost blow outs and things that don’t work properly. 

MATHIAS CORMANN: That is the point we have made all the way through the last few months. When some commentators have been hyperventilating that the federal government should push more money out the door more quickly, well that’s how you end up with waste. We are working very carefully with State and Territory governments around Australia, including the State government here in Western Australia, to ensure that we boost funding where that is sensible and appropriate, and where a project can be delivered on the basis of an ambitious timetable, but without putting us in a position where you end up wasting money because you tried to push money out the door too fast.

GARETH PARKER: So is there any you can do before those timeframes, in terms of stimulatory spending? Or will the Government keep strong to Josh Frydenberg’s plan that he’s articulating, which is a Budget surplus and no extra money beyond what you have already committed.

MATHIAS CORMANN: Of course we will stick to our plan. We will stick to the plan that we took to the last election that the Australian people voted for. It is a pro-growth plan.  It is a plan that involved … interrupted 

GARETH PARKER: But isn’t there evidence that the economy has slowed since the last election?

MATHIAS CORMANN: The Australian economy continues to grow. The Australian economy continues to grow when other economies around the world are shrinking in the context of a more challenging global economic outlook. In the June quarter, Germany, the UK, Sweden, South Korea, Singapore were all shrinking, whereas the Australian economy continued to grow. From our point of view, we are quite confident that economic growth in Australia will strengthen gradually moving forward on the back of a lower official cash rate, lower income taxes, continued high investment in infrastructure, our deregulation agenda, our commitment to bring down the cost of electricity and our ambitious free trade agenda, which is particularly important for a great State like Western Australia which is an open trading, globally focused economy.

GARETH PARKER: Just on another matter this morning, Austrac have announced they are going to lay a whole host of charges against Westpac for failing to adhere to money laundering rules. $11 billion that might have been transferred into or out of Australia on over 23 million occasions and critically the point is because these weren’t reported to authorities that might have harmed our national security information intelligence operations. That’s intolerable isn’t it?

MATHIAS CORMANN: All businesses as every Australian has to, must comply with the law. Austrac has certain law enforcement and compliance functions which are now playing out. That is how it should work.

GARETH PARKER: Senator, thank you for your time.

MATHIAS CORMANN: Always good to talk to you.