The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 17/09/2004

TRANSCRIPT

 THE HON PETER COSTELLO MP
TREASURER

 Doorstop Interview
Corner of Princes Highway and The Avenue
Pakenham

Friday, 17 September 2004
9.00 am

 

SUBJECTS: Pakenham By-pass, State GST Windfall

TREASURER:

Now back in 1998 the Commonwealth offered to make the Pakenham by-pass a Road of National Importance. And under that Programme 50 per cent of costs for construction are carried by the Commonwealth and 50 per cent are carried by the State Government.

In 2000, the Victorian Government accepted the Commonwealth offer and we immediately made available $100 million for the construction. And if VicRoads had gone ahead back then it could have been constructed for $100 million. But Steve Bracks has not got on with the construction of this Pakenham by-pass. It is another project that Victoria has stalled on and because Victoria has been stalling the price has risen.

Now I am here today to affirm that the Commonwealth Government has now set aside $121 million for the full construction of the Pakenham by-pass with its 50 per cent contribution. The full $121 million consists of $100 million which was set aside back in 2001 plus an additional $21 million which I set aside in this year's Budget.

The full $121 million of Commonwealth money is now on the table and there is no reason why the Pakenham by-pass can't be let out to tender immediately and why construction can't commence. It has taken too long. You can see from the traffic behind us the traffic that comes down the freeway and onto the Princes Highway comes right through Pakenham. Pakenham needs its by-pass. Pakenham needs to get this traffic out of the urban areas inside the town and Victoria needs a great freeway system down on to the Princes Highway.

I want to pay tribute to Jason Wood and Russell Broadbent, Jason the candidate for Latrobe, Russell Broadbent the candidate for McMillan, who are here with me today for this very important announcement. They are absolutely committed to this project. The Federal Howard Government has set aside the money. The project can commence. The Pakenham by-pass should be built immediately.

JOURNALIST:

Why has it taken, why hasn't construction started from your understanding by the State Government?

TREASURER:

The State Government accepted the Commonwealth offer in October of 2000. We have had $100 million waiting to be spent since 2001. The Labor Victorian Government has not met the contracts. And here we are in 2004, three years later, no construction has commenced, the only thing that has happened is the price has gone up. Whilst the price has gone up…

JOURNALIST:

(inaudible) putting pegs in down at Beaconsfield so it has started…

TREASURER:

No contracts have been let.

JOURNALIST:

No contracts have been let.

TREASURER:

No…

JOURNALIST:

It's just not going to just roll along in its own time anyway?

TREASURER:

Well hang on, if, the offer was accepted in October of 2000, the Commonwealth made available $100 million in 2001, here we are in 2004 and no contracts have been let. The only thing that has happened in the last three years is that the 50 per cent cost which was $100 million back in 2001 is now $121 million. Now, that is a 20 per cent escalation in price over the last three years. Now I am here today to say it should never have happened, it should never have taken three years but notwithstanding all of that the Commonwealth has increased its commitment by that additional 20 per cent. The $121 million is on the table, open the contracts, close the contracts, begin construction, build the Pakenham by-pass.

JOURNALIST:

Did Federal Labor's pledge this announcement today because they have already pledged $121 million…

TREASURER:

Federal Labor hasn't set aside any money in relation to this.

JOURNALIST:

How do you justify that? They have announced that they would put in $121 million.

TREASURER:

Well they haven't set aside any money for it because Federal Labor has not put out a fully costed roads programme…

JOURNALIST:

(inaudible).

TREASURER:

…this is in the Budget, it is in the Pre-Election Fiscal Outlook, it was allocated by me as Treasurer. If I had of had my way it would have been spent three years ago.

JOURNALIST:

Aren't you just re-announcing part of a package announced by John Anderson earlier this week as part of a total roads funding package?

TREASURER:

What I am announcing is that the money has been allocated, all Mr Bracks has to do is to let the contracts and the money will be paid. That is what I am announcing. The money is there, it is on the table, ready to be spent. We want it to be spent. We want the Pakenham by-pass to be built. We want the people of Pakenham to have the road that they should have had three years ago. And we call upon the Victorian Government to get on with it.

JOURNALIST:

Is it going to be a big thing if he doesn't back down on the tolls for the Scoresby, that seems like that is just what is going to happen, there is going to be tolls, do you think that that, he is being stubborn?

TREASURER:

Well I think Mr Bracks is entirely wrong to put a toll on the Scoresby Freeway. He promised the people of the eastern suburbs of Melbourne a freeway. He wrote to every one of them before the state election and said, if they voted him in, he would build the freeway. The Commonwealth stands ready to fund 50 per cent of the cost of the freeway. Mr Bracks has the money to build the freeway. It is not as if he doesn't have the money. He has the money to build a freeway.

JOURNALIST:

Will the Federal Government offer anymore though to try and you know, talk him around, I mean is that offer just going to keep increasing?

TREASURER:

Look, the Federal Government will offer 50 per cent of the share of building the Scoresby Freeway, which we have done. And Mr Bracks can keep his word, keep his signed agreement, get the Federal Government money and give the people of Scoresby a freeway or he can break his word, break his contract, not get the Federal Government money and toll the people of Scoresby every day of their lives for the rest of the time they commute. Now to me it is a no-brainer. I can't understand for the life of me why Mr Bracks won't keep his word. And you might think that his argument will be that he hasn't got the money. I am going to release financial estimates later on today which will show that Victoria is in a huge windfall position out of GST. And their windfall is more than enough to fund 50 per cent of the Scoresby Freeway.

JOURNALIST:

Mr Costello, should they spend the windfall on health or education or roads or rivers or forests…?

TREASURER:

Well the first thing they should spend it on is building the Scoresby Freeway.

JOURNALIST:

The first thing?

TREASURER:

Well that is what they promised at the last election. I can't understand why they can't build the Scoresby Freeway.

JOURNALIST:

They in fact say that it is not 50 per cent, what the Government, what the Federal Government is offering, it is only a portion of $2 billion in that project.

TREASURER:

The Federal Government has offered 50 per cent of the agreement, we have a signed agreement. There is a signed agreement you know which is…

JOURNALIST:

(inaudible) going to cost more that $2 billion.

TREASURER:

No I am sorry, there is a signed agreement, signed by Victoria and the Commonwealth for the Scoresby Freeway at $445 million. Now if it had been built according to the agreement it would have been built for $445 million. It has since gone up and we have allocated another $120 million. But you ask Mr Bracks: Mr Bracks why do you have to break your word? Why can't you keep your agreement? Why do you have to toll? Why don't you spend your windfall on building the Scoresby Freeway? I have, in politics I have seen bad behaviour before but I have never seen a State Government break a signed agreement with the Federal Government on road funding in my life before. Labor in Victoria has done an Australian first. Now it is not too late. If there is a strong vote for the Liberal Party in the eastern suburbs of Melbourne on October the 9th he can still have a Freeway. It is not too late. There is one last chance to tell State Labor and Federal Labor that the people of the eastern suburbs want a freeway and it is on October the 9th.

JOURNALIST:

You talk about breaking agreements do you, what do you say to the States who claims that the claim that the Commonwealth, the Prime Minister, has broken an agreement with them over competition payments?

TREASURER:

Well that is not right. Competition payments run until 2005-2006 and competition payments will be paid in full until 2005-2006.

JOURNALIST:

But after that?

TREASURER:

Well the agreement provides payments until 2005-2006. The agreement does not provide payments for 2006-07 or 2007-08. OK thanks.

JOURNALIST:

Just on tolls thought for this road…

TREASURER:

Yes.

JOURNALIST:

…is it possible that if it…

TREASURER:

Last question.

JOURNALIST:

…if the Government continues not to let contracts, that we could see tolling on this road and is your money provided on the basis that this road would be toll free.

TREASURER:

I am glad you asked me that because the people of Pakenham should know this, that if Mr Bracks promised a freeway for Scoresby and imposes a toll, how do they know that he won't try and impose a toll on the Pakenham Bypass? If he get away with a toll on his last freeway promise, how do they know he won't try a toll on the Pakenham Bypass?

JOURNALIST:

And will you rip the money away from the State Government if…

TREASURER:

Well let me tell you…

JOURNALIST:

…they did that U-turn?

TREASURER:

…we will, the Commonwealth Government fund a Pakenham Bypass freeway just as we will fund a Scoresby freeway, but I will say this to the people of Pakenham, if Labor gets away with turning a freeway into a tollway at Scoresby, what is the risk that they might not try and put a tollway on the Pakenham Bypass. Thank you very much.