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 -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

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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 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 . 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. That lifted everyone’s spirits and made people believe it was going to happen, but do members know that there is a good chance that the government never intended it to happen? However, some wise guy in the media office would have said, “What about this idea? We could run this for a few years, and then we’ll just let it die in its tracks.” Part of the Northbridge link was the sinking of the Perth-Fremantle railway line. People started to talk about that before the Second World War. I wonder whether it was a Labor government in those days that was talking about it. Hon Kate Doust: Some of us weren’t alive. Hon GEORGE CASH: Did Hon Kate Doust say that some of us were not alive? I can tell the member that there is a good chance that none of us will be alive when the Northbridge link is finally completed. That is just a possibility. Hon Kim Chance: That is real long-term planning, isn’t it - cradle to grave? Hon GEORGE CASH: Yes, and I am giving an awful lot of credit to people in this house to live a long, long time. Hon Kate Doust will be in the second 30-year period of her reign in this house. Hon Kate Doust: I hope you’ll do my numbers to ensure that happens. Hon GEORGE CASH: I cannot do those for the member. However, because Hon Kate Doust interjected, let me say this to her: I am really delighted that her husband, the secretary of the Labor Party, used his influence today. This morning when he spoke on the radio, he said that Mr Rudd would not come across to Perth for the Labor Party dinner on Saturday night, and he basically said that if a person was not a member of the Labor Party, he would not have been invited and would not be admitted to the place, and it did not really matter whether Mr Rudd was there or not because no-one said that he was going to speak. I noticed that by 10 o’clock this morning, no doubt after Mr Johnston, whom I hold in very high regard, got on the telephone and said, “I’ve just spent half an hour on the radio, Mr Rudd, trying to explain your absence from Perth on Saturday night”, Mr Rudd would have said, “I’ll come across right away, Bill.” Hon Kate Doust: He is a very persuasive person.

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Hon GEORGE CASH: The member’s husband is persuasive and I think he did the right thing. I hope that everything goes well on Saturday night, because it will be a very interesting situation when Mr Rudd comes to Western on Saturday night, especially if he talks to some of the big resource companies that employ thousands of people across this state about Australian workplace agreements. I made the point this morning when someone else was speaking that the news was already carrying the item at 10 o’clock this morning that Mr Rudd had been convinced to change his mind. That is why I interjected on the Leader of the Opposition and said that Mr Rudd was given an invitation, which appeared on the front page of this morning’s newspaper, that was framed in such a way that he just had to accept. What an amazing situation. Hon Simon O’Brien: I haven’t had an invitation to that dinner! Hon GEORGE CASH: No, and it is unlikely that Hon Simon O’Brien will get one! Hon Simon O’Brien: Why? Hon GEORGE CASH: Firstly, the Labor Party discriminates about whom it wants through the front door. Hon Simon O’Brien: Bloody snobs! Hon GEORGE CASH: Secondly, Hon Simon O’Brien is not a member of the Labor Party. Thirdly, given what he has been saying about Mr Rudd, he would not have been invited anyway. Because Hon Kate Doust referred to Mr Rudd, I will concentrate - Hon Kate Doust: Remind me not to interject and encourage you. Hon GEORGE CASH: That is right. I thought the member would have worked that one out. Mr Rudd, the Labor leader, fought the uranium mining ban, but then he agreed that perhaps the ban was not necessary. He claimed that there should never be an end to the three-mine uranium policy. Hon Jon Ford: Did you say “three mile”? Hon GEORGE CASH: I said the three-mine uranium policy. The Minister for Regional Development should listen, because this involves his area. Mr Rudd then agreed to the policy. He said, “We don’t need a three-mine policy. What are you talking about?” He fought the deregulation of the labour markets, but then, surprise, surprise, he agreed to it. He fought the goods and services tax. Do members remember the GST debate? Labor said that it would never, ever support a GST. Hon Kate Doust: Is that the one that John Howard said we would never, ever have? Hon GEORGE CASH: No. This is the one that Labor said it would never agree to, but then it did a backflip. If this guy was in the swimming or diving championships, he would win a gold medal every time for some of his backflips. Hon Barbara Scott: He doesn’t know whether he’s coming or going. Hon GEORGE CASH: Indeed. Hon Barbara Scott is right; he does not know whether he is coming or going. Mr Rudd also said that Labor would never support privatisation, but he was quite happy to sell Qantas and the Commonwealth Bank. Do members remember the signs in Forrest Place in Perth right outside the Commonwealth Bank headquarters, and all the Labor people saying, “Don’t sell the Commonwealth Bank”? The Commonwealth Bank was sold and the Labor Party said, “Oh, well, that’s life.” Hon Kate Doust: It’s good to see you get so excited about these issues. Hon GEORGE CASH: No, I do not get excited; I get amused, because I remember Mr Rudd saying, “We will never allow the sale of Telstra.” Sure enough, a matter of days, weeks or months later, yes, the Labor Party agreed to the sale of Telstra. It fought against secret ballots for strikes. That is a pretty important matter that goes to the core of the Labor Party. It said that there would be no secret ballots for strikes. When the legislation went into the federal Parliament, what happened? Labor agreed to that. The Labor Party said that it would never, ever support the unfair dismissal rules, but, sure enough, it agreed to that when the legislation hit the Parliament. Do members remember the issue of full-fee paying places at universities? Mr Rudd said, “We will never agree to that. It’s not good enough; you’ve got to put Australian students first.” However, he changed his mind; he agreed. Hon Norman Moore: I think he changed his mind on voluntary student unionism. Hon GEORGE CASH: Indeed; that was Mr Rudd’s economic genius. I do not want to get into personalities, because he is entitled to his views. However, I wish he would stick with the one view. The one thing about Mr Howard is that, like him or not, when he says something, he sticks with it. Hon Kim Chance: Are there still weapons of mass destruction in Baghdad?

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Hon GEORGE CASH: I do not know. Hon Kim Chance: Has he worked out who threw those kids overboard? Hon GEORGE CASH: I do not know. Hon Kim Chance: Don’t lecture the Labor Party - Hon GEORGE CASH: The Leader of the House has just raised two important issues. Are there weapons of mass destruction in Baghdad? I do not know. Hon Kim Chance: Your Prime Minister told us that there were and he committed Australian soldiers because of that issue. Hon GEORGE CASH: Is the Leader of the House saying that he does not support Australian troops in Baghdad? Hon Kim Chance: Once they’re there, I do. Hon GEORGE CASH: Of course the Leader of the House supports them. They are good Australians who are trying to defend Australia and what we stand for. Equally, I do not know whether they found all the children who fell overboard. I was not there. Hon Kim Chance: They weren’t thrown overboard; the Prime Minister said they were. Hon GEORGE CASH: Is that so? Hon Kim Chance: And the Navy eventually contradicted him. Hon GEORGE CASH: I will tell the Leader of the House what I am going to do, given that those matters are clearly at the fore of his mind. When I next see Mr Howard, I will mention to him that the Leader of the House is not very happy with that arrangement. Hon Kim Chance: He probably won’t talk to me either! Hon GEORGE CASH: I was going to qualify that by saying that I will probably not speak to him for a long time! I want to move on from Mr Rudd. I am delighted that he is coming to Western Australia on Saturday night. I hope he promises us lots of goodies. Returning to the infrastructure projects that I was talking about before Hon Kate Doust led me into temptation, I refer to the Northbridge link, which has already experienced a $75 million cost blow-out. It was originally going to cost $255 million. However, in January this year the government said that it would cost $75 million more than expected and will now cost $330 million. The bottom line is that it will never be built. We all know that that is the situation. The government is good when it comes to infrastructure; indeed, if it were running a marketing company, it would have received gold stars all the way because it is that good at convincing the community that it is doing something when nothing is happening. In the end, the community expects some value for its dollars. I have outlined four issues this afternoon. The fifth issue is the state government’s failure to address the housing crisis in Western Australia. When I say housing crisis, I do not just mean housing for those who can afford to get into the market. I refer also to first home buyers who have been forced out of the market. I also want to talk about the impact of the Minister for Planning and Infrastructure’s lack of action on the release of residential lots in WA. I am pleased to say that last year - if the government wants a copy of its report, I would be delighted to give it one - the Leader of the Opposition, Paul Omodei, organised a Western Australia housing affordability task force. He invited a group of knowledgeable people to look at the housing situation in Western Australia in an attempt to come up with some recommendations that would ease the burden on those who want to get into the home buyers market or those who are trying to rent accommodation. The taskforce determined that in 2001, housing affordability in Western Australia was higher than at any other time in the state’s history and that it was the highest for all the mainland capitals. That in itself is an interesting situation. I remind members that the Court coalition government was in government from 1993 to 2001, and in 2001 housing affordability in Perth was the highest in this state’s history. Members should contrast that with the situation in December 2006, when housing affordability in Perth was the lowest in the country. What a phenomenal turnaround in a matter of five years. It is a disastrous situation for this state. Some of the other issues that the task force uncovered in its consideration of the issue was that the household income needed to buy a median price house in WA had blown out to $110 000 per annum. This report was presented by the task force to the Leader of the Opposition in January 2007. Whilst at that time the household income needed to buy a median price house in WA was $110 000, today it would be considerably more. Members would be aware that only the other day the HIA/Commonwealth Bank Affordability Report found that

[4] Extract from Hansard [COUNCIL - Thursday, 31 May 2007] p2608f-2612a Hon George Cash the median price for a house in Perth had hit $508 900 in the March quarter. The bad news is that that pipped the median price in Sydney, which is $507 400. It is the first time that Perth housing has been more expensive than housing in Sydney. Debate interrupted, pursuant to standing orders.

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