Queensland Resources Council (QRC) Chief Executive Michael Roche has called on the State and Federal governments to “revive a tradition of prudent economic infrastructure investment” and urged Australians to start asking their leaders “where the public assets of the future would come from” if not from “visionary” government investment.
“In the past, governments invested in infrastructure ahead of demand, confident that by creating commercial opportunity, sufficient economic activity would allow them to recoup their investment. Only five years after the start of mining at Mount Isa in the 1920s, the government-owned railway was completed to haul the mineral wealth some 1,000 km east to Townsville,” he said.
“What does it say about Queensland and Australia in 2015 that the same railway line, with a few minor improvements, is still in service and subject to closures because of seasonal weather conditions?”
Mr Roche said most of the Queensland coal rail network and most of the ports used for resources sector exports had been built by successive State Governments.
“For the past decade or so, both ALP and LNP governments in Queensland have embarked on programs to divest the state of port and rail ownership through the sale of 99-year leases to private sector interests,” he told delegates to an infrastructure conference in Perth.
“However, with both major parties now ruling out further privatisation of government assets, are government infrastructure businesses going to be allowed to play a role in the provision of essential enabling infrastructure in Queensland?”
Mr Roche said the Palaszczuk Government’s plan to reduce government debt involved “hypothecating a portion” of government-owned business returns to the task.
“In discussions to date, government Ministers and advisers have given every impression of being gun shy when it comes to public sector borrowing to fund infrastructure projects, even where there may be a good commercial payback to the state or state-owned business,” he said.
“That does beg the question – if you are going to retain government assets, why would you prevent those businesses from pursuing commercially justified investments?”
Mr Roche said the government’s approach will be tested by its reaction to a sound commercial arrangement with private sector interests to help facilitate development of multi-user Galilee Basin rail infrastructure.
“If the answer is yes, then perhaps the new Queensland Government will be prepared to break free from the straightjacket stifling government’s role in economic infrastructure over the past seven or eight years,” he said.
According to him, the proposed State Infrastructure Plan would require cooperation between State and Federal governments in order to yield results.
“A consistent government position on infrastructure sends a strong signal to potential investors and potential customers. The QRC believes government has a genuine industry development role in infrastructure, noting there is not enough private capacity to pay for everything, as governments have come to expect,” he said.
“The global competitiveness of the Queensland resources sector has relied on the provision of high quality economic infrastructure ahead of demand. For the resources sector to take advantage of continuing Asian demand for minerals and energy, industry and Government need to consider how best to provide infrastructure ahead of demand, and in a least-cost way. Now is the time to be investing in the next resources sector upswing. Ten years from now we don’t want to be playing catch-up.”
Mr Roche also added that the QRC will be the Queensland Treasurer‘s biggest ally if federal infrastructure spending was blocked by politics.
“We will back Mr Pitt 100% in calling on the Federal Government to ensure that Queensland gets its fair share of infrastructure funding,” Mr Roche said.
“Tying federal support to the sale of state-owned assets is redundant as neither side of politics in Queensland is on board with further asset sales.”