P2608f-2612A Hon George Cash
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Extract from Hansard [COUNCIL - Thursday, 31 May 2007] p2608f-2612a Hon George Cash ESTIMATES OF REVENUE AND EXPENDITURE Consideration of Tabled Papers Resumed from an earlier stage of the sitting. HON GEORGE CASH (North Metropolitan) [4.35 pm]: Before question time I was indicating that, each financial year, generally in May, the government makes a statement that it will spend so many billions of dollars for the financial year. Only 30 to 50 days later - by 30 June - it is spending much less. I indicated that in 2001-02, in 45 days, $153 million worth of works went missing or did not occur; in 2002-03, over 53 days, $350 million went missing; in 2003-04, over 55 days, $355 million went missing; and in 2004-05, over 35 days, $453 million went missing. I was up to 2005-06. On 11 May 2006, the government announced that it would spend $5.1 billion on infrastructure and general capital works for the financial year. Fifty days later, on 30 June, the actual expenditure was $4.527 billion. During that 50-day period, for some inexplicable reason, $573 million worth of construction of general infrastructure and capital expenditure did not occur. Adding up those figures shows that, in May and June of the years I have mentioned, the total underspending was $1.9 billion. I acknowledge that in some cases projects were rolled over to the next year, there were cost escalations in other cases, and there were, no doubt, some other reasons. However, it beggars belief that the government can make a statement in May that it will spend a specific amount of money, and then a matter of weeks later change that figure by millions and millions of dollars. Some interesting items are included in the government definition of “infrastructure”. For instance, from the documentation that we have been provided with, it appears that new lotto games, new government cars, project management and marketing, art acquisition, consultancy fees, software, the Government House security system, the Parliament House airconditioning, furniture and, surprisingly, Keystart and GoodStart, are included in the budget as infrastructure. It is an interesting proposition, and perhaps something that we can take up with the Treasurer in due course. It is interesting to look at some of the cost and time blowouts on some of the projects that the government keeps telling us about. For instance, the cost of the Perth-Mandurah railway has blown out by at least $400 million, and the opening has been delayed by two years. To give some indication, the original cost was said to be $1.2 billion. In May 2002, there was a cost increase of $187 million, taking the total up to $1.4 billion. In June 2002, another cost increase of $15 million took the cost up to $1.42 billion; in December 2003, a cost increase of $100 million took the total cost up to $1.52 billion; and in April 2005, a cost increase of $45 million took the total cost of the project up to $1.56 billion. It would not be right to have a year in which there was no cost increase, so, in April 2006, true to form, the cost of the Perth-Mandurah railway increased by $50 million, which took the total cost up to $1.61 billion. Twelve months down the track we are all trying to find out exactly how much the railway will cost, but the government does not want to tell us. Hon Nigel Hallett: It’s the same with the Peel deviation. Hon GEORGE CASH: Hon Nigel Hallett is right; I will deal with the Peel deviation in a minute. The cost of the railway is up to $1.161 billion, and we know it will cost more. The original opening date was scheduled for December 2005, and the government certainly trumpeted that on as many occasions as it had the opportunity. However, by July 2001, only a matter of months after the government had taken office, it delayed the scheduled opening of the line, and said that it would be 2006 rather than 2005. Later, in, I think, May 2002, there was another indication that the opening would be delayed, this time to 2006. In August 2002, a few months later, another announcement was made of a delay to 2007. In December 2003, the government thought it had got on top of the various issues, so it suggested an improvement in the opening date and brought it back to 2006. However, by April 2005, the opening date had been delayed until April 2007. In January 2006, the opening was rescheduled to May 2007. In April 2006, the suggestion was that the opening of the line would occur in July 2007. In May 2007, only a few months before the alleged opening of the line, a delay has been announced for the opening to December 2007. However, I must say that there would need to be 16 question marks after December 2007, because the opening date is an unknown quantity at this stage of the game. Worse than that, there will be considerable disruption to the Perth-Joondalup line and, I understand, to the Perth-Armadale line as a result of the electrical works that are required for switching and other gear as the Perth-Mandurah line comes on stream. As with the many questions we ask in this house about the situation surrounding the disruptions to the Perth-Joondalup line in particular, the more we ask, the less we are told. The other major project that is often trumpeted by the government is Fiona Stanley Hospital. We on this side of the house are keen to see that hospital become a reality. The original cost was $420 million some years ago, but in September 2005, it was increased by $322 million to $742 million. That is a huge increase for this public and necessary infrastructure. Twelve months later, in December 2006, the cost had increased another $350 million, taking it up to $1.1 billion, and there it stands at the moment. It will be interesting to know what the additional cost blow-out is by May 2007, some six months later. The original construction commencement was to be in [1] Extract from Hansard [COUNCIL - Thursday, 31 May 2007] p2608f-2612a Hon George Cash 2007. However, that now appears to have been delayed until 2008. The original opening date was to be in 2010, but in December 2006, the government announced that the opening would be delayed, and it is now scheduled for 2012. We would not want to book ourselves into Fiona Stanley Hospital in a hurry, certainly not within the next four years anyway. The other project that has blown out in cost by $270 million, and in time by two years, is the Perth arena project. The original cost was a $50 million contribution. However, in September 2005, there was a cost increase of $110 million, taking the cost to $160 million. By May 2006, the cost had increased by another $35 million, taking the cost to $195 million, and by August 2006, the cost increase was another $125 million, taking the cost up to $320 million. Therefore, there is a $270 million cost blow-out on this infrastructure. The original construction was to commence during 2006. However, in September 2005, we were told that there was a delay to the start, and it had been changed to October 2006. By February 2006, we were told that there was another delay to the start, and it would now be changed to late 2006. In August 2006 - all in the same year - we were told that there was another delay to the start and that it had now been changed to April 2007. That was just to start the project. As far as the completion is concerned, the opening date was meant to be in 2008, in time for the Hopman Cup. However, in September 2005, we were told that there was a delay to the opening and that it would be open in time for the 2009 Hopman Cup. No doubt people sought to make their arrangements, taking into account that it would be open for the 2009 Hopman Cup. However, by January 2007, the government acknowledged that the delay to the project meant that it would be open for the 2010 Hopman Cup. That project has also blown out in the terms I have described. Most people would be embarrassed if they said that they were thinking of opening something in a particular year and then found that it would be three, four or five years later. However, this government knows no shame. It just trots out a new figure and a new opening time, and believes that the community will just accept it. Hon Barry House: Usually, it makes more announcements. Hon GEORGE CASH: That is right. Hon Barry House talks about a few more announcements. Take the Northbridge link, for example. That was announced two and a half years ago. If members look back at the minister’s press releases, it looks as though it is going to happen in the immediate term. Hon Barbara Scott interjected. Hon GEORGE CASH: Quite so, yes. However, the Northbridge link, which I will deal with in detail in a moment, has just gone on and on. The fact is that in this year’s budget, funding for the Northbridge link does not exist. The Treasurer has already killed the deal. However, what the government got out of it was press release after press release, and promise after promise.