Joint Press Conference - Perth Freight Link – Release of Business Case Summary

Senator the Hon Mathias Cormann
Minister for Finance
Senator for Western Australia

Colin Barnett
Premier of Western Australia

Dean Nalder
WA Minister for Transport






Perth Freight Link business case complete, GST

MATHIAS CORMANN: Today is a great day, as we release the summary of the business case for the Perth Freight Link, a critically important piece of transport infrastructure. The Roe Highway extension in particular is a long overdue piece of economic and community transport infrastructure. It will help us build a stronger, more prosperous economy not only here in Western Australia but nationally. The benefits that this $1.6 billion project will deliver to the Western Australian economy have been assessed at a benefit to cost factor of 2.8, which is quite significant. Not only will this project help boost economic growth, not only will it help reduce the cost of doing business by reducing travel times, by reducing the cost of transport, by providing an important link between the industrial heartland of Western Australia, the airport and the Port of Fremantle, it will also help remove congestion from our local roads. It will remove about 500 trucks from Leach Highway by 2031. It will reduce travel times from Kwinana Freeway to the Port of Freemantle by about nine and a half minutes. It will reduce the cost of transport over that particular piece of road by about eight minutes and 15 seconds. These are all tangible benefits. Boosting economic growth, improving safety, reducing the congestion and generally helping to improve the quality of life for people living in these suburbs here around Leach Highway. So it is a great day to be here with my good friend and colleague the Premier of Western Australia Colin Barnett, the local Members Matt Taylor and the Transport Minister Dean Nalder and the Treasurer Mike Nahan. I am very pleased to see a very tangible example here of the Abbott Government working constructively and positively together with the Barnett Government to deliver tangible benefits for the people of Western Australia.

COLIN BARNETT: I will just make a few comments and then I will get Dean Nalder to go into some of the detail. Perth is a rapidly growing city. We are fast approaching 2 million people and the nature of our State economy is that we have a large number of heavy vehicles coming out of Fremantle and Kwinana serving both the mining and farming industries. Large numbers of heavy vehicles are moving construction machinery, building materials, components of major industrial projects, chemicals, fuel and the like, so it is an unusual combination. The State and the Commonwealth Governments have worked very cooperatively over the last few years on what will ultimately become the Perth Freight network. You are all aware that there is the Gateway Project near Perth Airport which is well advanced and coming together very quickly. In 2016, work will begin on the northern end which is the Swan Valley Bypass, taking that heavy vehicle numbers off the major roads that people use and put them onto the freight network. This is the third major part of that plan and addresses the southern suburbs. This overall project will cost in excess of $1.5 billion. It has been 60 per cent funded by the Commonwealth Government, 40 per cent by the State. I want to very much thank the Commonwealth Government and Mathias in particular, this is a huge contribution to sorting out some of the traffic issues south of the river and providing more efficient heavy vehicle freight network. The project has got three broad components to it. The first and the biggest is the Roe Eight project, extending Roe Highway from the Kwinana Freeway through to Stock Road. There is some controversy about that. It will either go through or over the Belliar wetlands. But those wetlands will be protected and indeed public access and usage of that environment will be very much enhanced. There will also be a major upgrade to Stock Road providing that sort of north/south component of this work and also at the southern end of Stirling Highway in north Fremantle, also further work will be done. The amount of heavy vehicles is just obvious any time of day or night. This will take 500 heavy vehicles off Leach Highway. That will be a great benefit to the local community where you have got that unhealthy and dangerous mix of normal suburban traffic with large numbers of heavy vehicles. That is probably all I think I need to say. It is a big project, it will be totally completed by 2019. It will come in stages, one of the stages will be the interchange around the new Fiona Stanley Hospital which has got potential to be a major source of congestion so that will have to be virtually rebuilt to cope with this. So this is going to be a big engineering project. There are around 2,500 jobs created over the course of construction. I will hand over to Dean Nalder who will particularly comment on some of the aspects and one of those will be a user charge for heavy vehicles. But I will ask Dean to explain that. 

DEAN NALDER: Thanks Premier. I am really excited to be here for this transformational project of Perth Freight Link. It has both broad social, economic and environmental aspects to it. I will just touch briefly on all three. From a social aspect, you have heard about the desire to move heavy vehicles off Leach Highway. But we also know that the delivery of this project will allow people in the western areas to gain greater access to the hospital precinct that both Murdoch Hospital and Fiona Stanley. In addition to that, we also know that when fully operational, the Murdoch Precinct will have over 30,000 people working there on a daily basis and up to over 100,000 people visiting on a daily basis. As it stands, South Street will struggle to cope. So doing this Roe Highway extension has huge social benefits in allowing people greater ease and access to the hospital precinct. From an environmental perspective, we have looked at this and considered this in a lot of detail. We know that we will be spoiling 38 hectares of vegetation in that precinct. In response to that, and through discussions through the EPA approval process, we will put aside over ten times that amount of land in a bush forever site. So we are looking at over 400 hectares to be put aside as bush forever. In addition to that, we have looked at the carbon emission save by stopping and creating those economic benefits to the industry, it also reduces carbon emissions and through to 2031, we are looking at in excess of 400,000 tonnes of carbon emissions saved by doing this project. That is from an environmental perspective. From an economic perspective today you have heard that there is a benefit cost ratio of 2.8 times. And that means a huge economic benefit for this State. And courtesy of the Federal Government, that means that we were looking at $650 million contribution out of the $1.57 billion that this project is estimated to cost. And we will look at a freight charge that goes with that. But one of the things that I said at the outset is that we wouldn’t create a freight charge unless we can create a win-win for industry. And working through the modelling, we still have more work to do as we go through the details and we work through the tender processes. However, we believe that we can create an outcome that is great for the State and great for industry at the same time. Economic modelling suggests that we should be able to return some of the benefit back to the industry and we are looking at about one third to two thirds used to help fund this project from a State component. Very excited about this project and I think it is a great outcome for Western Australia and the people of the southern communities.

RUSSELL AUBREY: Thanks very much Dean and good morning everyone. Well, this has been a twelve year float on behalf of the City of Melville and the local community in conjunction with our local Liberal Members. It has been a long, hard fight but it looks like we are there now and it is a great relief to us all that the pollution and the congestion on our roads is going to be relieved and we’re going to be opening up the South West Corridor for growth and employment. It is a fantastic day. The era of deleting the Eastern Bypass is clear for us all to see and this Government now is rectifying that and working in innovative ways to find a path between port and airport. It is a fantastic day for all of the residents of the City of Melville, all the residents of the south west corridors. We thank Ministers Nalder and Nahan and Senator Mathias Cormann. Thank you very much for your collaboration with the city of Melville and the community for listening to our concerns and we look forward to a much brighter future in this area. Thanks very much indeed.

JOURNALIST: Can you just explain how the heavy vehicle toll will work? It sounds like it will apply all the way from Muchea to Fremantle.

DEAN NALDER: Given that we are creating a freeway system, it will run from Stirling Bridge all the way through to Muchea. We are looking to defray the costs over the whole extent of that freeway system. The economic modelling suggests that there is potentially a net benefit and it is early days, so we have a lot more work to do and greater discussions with industry, but we are looking at a net benefit of up to 45 cents a kilometre. What we have considered as part of that is to use GPS technology, so transformational technology which will have added benefits. That system is currently being utilised in Auckland. And we look to be able to supply industry with greater information around fatigue management for the industry as well as give us better, in depth information for our planning, for planning purposes to understand exactly the routes the trucks follow.

JOURNALIST: So if the net benefit 45 cents per kilometre will the charge that applies to heavy vehicles be that amount or less than that amount?

DEAN NALDER: No, less than that amount. I talked about this needs to be a win-win for industry. There is still more work to be done too because we need to go through the tender process.  I said at the outset that our priority is, well the Premier mentioned that, the priorities are around the Fiona Stanley Hospital, that’s where we want to kick start first because we know with the Fiona Stanley up and running we really need to move on that very quickly. We will continue to work with industry and we need to go through the tender processes. We are looking for transformation, with innovative approaches from tenderers. We understand that prices are coming down so there’s a long way to go with the modelling and the consultation process with industry.

MATHIAS CORMANN: The important point here is that this project will result in tangible reductions in the cost of doing business for those commercial heavy vehicles that are using that new bit of infrastructure. It will lead boost economic growth. So it really is a matter here of sharing some of the costs, that is some of the costs. If this model is successful now, it will actually help us leverage more additional investment in economic infrastructure, helping us boost economic growth into the future where taxpayers and users share some of the cost and with all of the disciplines around making sure that it is a fair sharing of the cost.

JOURNALIST: Minister, is that 38 hectares you will be spoiling, is that in the Beeliar wetlands?

DEAN NALDER: No, the 38 hectares is a total vegetative area...interrupted

JOURNALIST: But is some of that in the Beeliar wetlands?

DEAN NALDER: Yes, there is about 6 hectares considered to be in the wetlands.

JOURNALIST: The point I just wanted to make here, is there is probably quite a substantial swap over to the other bushland you will be setting aside. However, the proponents or the supporters of those wetlands will ultimately say it is irreplaceable. The land you’ll be spoiling in the Beeliar wetlands is irreplaceable. So in that context, is it a fair swap?

DEAN NALDER: What we need to look at and as part of the process is find like for like type areas. And what we want to also do is try and improve the facilities that exist around the wetlands. So we are going to provide greater access, shared paths and allow people to have access to that. One of the things that I have requested the engineers to consider is whether or not we can use Roe Highway as a better water capture, using natural filtration to supply more water into the wetlands which has been drying out. A number of our wetlands have been drying out over a number of years. So we like to look at innovative ways that we can actually enhance the wetlands that exists there.

JOURNALIST: Are you concerned that there might be delays to the project because of the campaign the environmentalists are likely to mount over this?

DEAN NALDER: Look, I can’t comment on that with any detail. We have considered and there is an appeal process that is still underway, we are confident that that appeal process will be concluded shortly. We are confident this will proceed. We have given this a great deal of consideration and I think when you actually understand all the environmental benefits that there for the broader community, that this is a great initiative and a great project.

JOURNALIST: Has there been a full cost benefit analysis carried out on this project?

MATHIAS CORMANN: Yes there has and today we are releasing a summary of the business case.  The reason we are not releasing the full business case is because there are some commercial sensitivities and some commercial in confidence matters that it wouldn’t be in the public interest for us to release at this point.

JOURNALIST: What are those commercial sensitivities?

MATHIAS CORMANN: There is a level of negotiation that is now going to get underway in terms of getting the project underway.  There is design work that has to be done. There are contracts that are to be let and some of that information that underpins the modelling done by the Government is commercially sensitive.

JOURNALIST: Transport industry says that if you only apply the toll to trucks and not to cars you are not discouraging cars from using that freeway and therefore making a much easier progress for the trucks.

DEAN NALDER: We’re creating a freight network and a freight link right through the heart of Perth but at the same time we will be providing access to private vehicles.

MATHIAS CORMANN: The key here is trucks actually derive a tangible commercial benefit from the improvements that flow from this project. What we are saying is that it is only appropriate that in order to get this project off the ground that those businesses that derive a tangible commercial benefit share in some of that cost in order to get that underway. The suggestion that somehow this ought to be expanded across everyone is not a suggestion that we support.

JOURNALIST: So you’re confident, you can guarantee then that those companies that don’t want to pay that charge will not want to go back and use Leach Highway which they won’t be paying any money for?

MATHIAS CORMANN: That is a matter for the State to determine who has to use which part of the road depending on what the size of the truck that is going through a particular road. The point here is this though, a tangible commercial benefit in terms of reduced travel time, a tangible commercial benefit in terms of reduced cost to transport goods from point A to point B and what we are suggesting is that in order to get a project of this size off the ground, it was only appropriate that some of that cost is shared by those businesses that derive a tangible benefit.

JOURNALIST: Well Minister how would you enforce that trucks don’t avoid paying that toll then?

DEAN NALDER: Look I would like to think that if we can create a win-win situation, there is a tangible benefit for them and they will get a benefit from utilising it. At the same time, with GPS technology, we will be able to track every route that heavy vehicles or commercial vehicles will use.

JOURNALIST: Would there be penalties?

DEAN NALDER: Look, you are getting into a level of detail that now needs to be considered. We need great consultation with industry, we need to go through the contract negotiation phase with the construction industry to get the best possible outcome we can for this State.

JOURNALIST: But you are not ruling out forcing trucks to use this route?

DEAN NALDER: I am not ruling anything in or out at this point in time because I think it is premature. And I think that we have a long way to go to work with industry and to get the best possible outcome we can for the State. But we are, and I keep coming back to that point, we are creating a tangible benefit for the freight industry.

JOURNALIST: The way that the press release is written suggests that the heavy vehicle charge will be revenue that accrues to the State Government to offset its $650 million contribution. Do you have an understanding of how much of that $650 million contribution you would like to recoup from heavy vehicle charge and over what timeframe?

DEAN NALDER: There are a number of different models that are available to the State. And right at the outset we were talking about a private/public partnership. We have decided to take that on ourselves at the moment. Our modelling suggests that the net interest cost of the increase of the State debt will be fully covered by the freight charge, where we progress ...interrupted

JOURNALIST: So the interest will be charged but not the capital? Not the principle?

DEAN NALDER: No, it will also cover the principle amount over a period of time. But we will have alternatives down the track. There is no reason down the future once this is up and running and been proven that we don’t sell through to a public/private partnership arrangement. It is...interrupted  

JOURNALIST: So you may privatise the road?

DEAN NALDER: We won’t privatise the road, no. What we may do is sell off the income stream to pay down the capital at a certain point in the future for that freight.

JOURNALIST: So what stops the private operator then ramping up the cost to use the road?

DEAN NALDER: It is like everything, it is a little bit early at this stage to get to that level of detail. The key point here is that the is a tangible benefit for the industry. We now need to go into contract negotiations, we need to engage further with the industry.

JOURNALIST: But there may be no tangible benefit for the industry if a private operator gets a hold of it?

DEAN NALDER: We are not looking at a private operator, all I said is that’s a possibility in the future that we may consider.

MATHIAS CORMANN: And Jeff, with all due respect you are making assumptions on what the terms and conditions would be in that sort of scenario.

JOURNALIST: Well the Minister raised it. He’s going forward with this plan without getting all the t’s crossed and the i’s dotted.

DEAN NALDER: No, what we are saying is that we are taking the responsibility at this point in time for this project. What it may look like in the future, we know that it will pay for the capital and the interest costs of this project. What model we adopt in the future given private/public partnerships, it is too premature at this point to analyse. 

JOURNALIST: In terms of the Roe Eight section, have you got an understand of what the latest costs are for that section given the environmental requirements to get that road built, or that section of the road built?

DEAN NALDER: The modelling at this point in time suggests that there is two elements to it. There is the element around the Fiona Stanley Hospital which is estimated to be budgeted to be $265 million. But the whole Roe Eight component, including that, is estimated to be $740 million. That is the same number that we have worked with all the way through.

JOURNALIST: Are you confident that these construction time frames are realistic? That is starting construction in 2016 and finished by 2019?

DEAN NALDER: The State Government, this State Government has a fantastic track record of delivering on time and below budget. I have great confidence in the work that my department has done in the time frames that are allowed. And I can only talk about the history that we have and the Gateway Project is a classic example coming well under budget and looking like well over a year ahead of time frame. So I have great confidence in those time frames and really excited, this is a transformational project for Perth and I am really excited about it.

JOURNALIST: To Senator Cormann as well, just that the $900 million plus that the Commonwealth is contributing, you don’t get any revenue stream back from the heavy vehicle charge, that is just a grant?

MATHIAS CORMANN: This is part of our historic record breaking infrastructure investment program. The Prime Minister in the lead up to the last election said that he wanted to be the Infrastructure Prime Minister. We are rolling out more than $50 billion in infrastructure investment right across Australia and this is a very significant investment here in Western Australia, which will help boost economic growth in WA and nationally and we are very proud to have been able to play this role getting this project across the line.

JOURNALIST: Minister, why don’t you support WA getting a greater share of GST?

MATHIAS CORMANN: In the lead up to the last election we were very clear. We said that we would not make any changes to the GST in the first term of an Abbott Government, full stop end of story. We are delivering on that commitment…interrupted 

JOURNALIST: You personally didn’t. You personally didn’t Minister, you personally didn’t.

MATHIAS CORMANN: …we also said that we would engage in a Tax White Paper review process, which is about to get underway where we will consider opportunities for medium to long term tax reform, to help us build a stronger more prosperous economy across Australia. Now in terms of me personally. Me personally, I am a Minister in a national Government. As a Minister in the national Government I have to consider, all of my colleagues have to consider, all of the legitimate perspectives, views and aspirations from right across Australia in a way that is in the national interest and that is what we will do.

JOURNALIST: The OECD has made the case for a GST rate of between 15 and 18 per cent, what do you think of that argument?

MATHIAS CORMANN: As I’ve just said we went to the last election with a very clear commitment that we would not make any changes to the GST in the first term of an Abbott Government, full stop end of story. We will stick to that commitment. Now beyond that there is a tax reform process about to get underway. We will be engaging in an open, transparent and consultative process with the Australian community, a conversation with the Australian community on how our tax system can be improved into the future. How we can make it simpler, more efficient, how we can ensure that our tax system is designed in such a way as to maximise economic growth opportunities into the future. These issues will be considered in that context.

JOURNALIST: Your role as a Minister, is that conflict with your job as a Senator?

MATHIAS CORMANN: Not at all. The same way as my good friend Colin Barnett as Premier for Western Australia represents the interests of people from Kununurra to Esperance, Geraldton to Bunbury, Joondalup to Rockingham and not just the interests of the people in his local electorate of Cottesloe, I am responsible as a Senator for Western Australia to represent the interests of Western Australia but as a Minister in the national Government, I represent and I have to consider the legitimate views and aspirations of people from Perth to Hobart, from Darwin to Adelaide, from Brisbane to...interrupted

JOURNALIST: Yes but the case is thatWestern Australia is getting screwed by the GST, getting screwed out of the GST?

MATHIAS CORMANN: Under the Abbott Government, Western Australia is doing much, much better than we did under the previous government. We got rid of anti-Western Australian taxes like the carbon tax and the mining tax. We are making sure that Western Australia gets a better deal in terms of additional investment in infrastructure. This announcement here today is a great example of that. We have made a series of other changes in recent months that are very good for Western Australia. There is a conversation to be had nationally over the next twelve to eighteen months about how our tax system can be improved moving forward. I’m sure that the Western Australian State Government and people across Western Australia will be active participants in that conversation.

JOURNALIST: Minister, do you think it is actually fair that, I think it was $3.7 billion, was taken away from WA in GST this year and why should WA voters vote for you again?

MATHIAS CORMANN: Again the GST sharing arrangements have been in place for some time.  In the lead up to the last election...interrupted

JOURNALIST: You argued for them to change, you argued for them to change personally.

MATHIAS CORMANN: In the lead up to the last election we very clearly said, I said, the Prime Minister said, the Treasurer said, everybody on the Coalition frontbench said that we would not make any changes to the GST in the first term of an Abbott Government. We won’t be. But we are engaging in a conversation with the Australian people about how the tax system can be improved and of course people across Western Australia will participate in that conversation. But to be very, very clear, the responsibility of a national Government is to act in the national interest after having considered all of the legitimate views, perspectives and aspirations from right across Australia.

JOURNALIST: Would a higher GST rate though and changes to the tax mix help the Federal Government return to surplus more quickly?

MATHIAS CORMANN: Firstly, there is a fundamental error in the premise of that question. All of the GST revenue goes to the States. All of it. So any changes to the GST would not have the effect that you have described. Secondly, we were very very clear in the lead up to the last election. We were very clear when we said that there would be no change to the GST in the first term of an Abbott Government, full stop, end of story. Beyond that, we also were very clear that we would engage in a conversation with the Australian people through the Tax White Paper review process on how the tax system can be further improved and we are encouraging all people across Australia to participate in that conversation so that we can come up with a better system for the future.

JOURNALIST: There’s a three year time difference between assessing royalties and GST collection. Is that fair, does that need to be looked at? That’s something that could be done with a stroke of a pen, I understand?

MATHIAS CORMANN: You can go through every technical aspect around how GST sharing arrangements currently operate… interrupted

JOURNALIST: Well do you support it?

MATHIAS CORMANN: …we as a Government have made a very clear commitment in the lead up to the last election and that is that we would not make any change to the GST in the first term of an Abbott Government, full stop end of story. We are sticking with that commitment. Beyond that, there will be a conversation with the Australian people around how the tax system nationally can be improved moving forward. People across Western Australia, the State Government here in Western Australia, no doubt will actively participate in that conversation.

JOURNALIST: Minister you keep saying that you’re looking for legitimate options. Are you saying that the OECD’s recommendation isn’t legitimate?

MATHIAS CORMANN: Sorry, I think you are misrepresenting what I said.

JOURNALIST: Senator the rise of pop up parties, Gary Gray has raised the fact that the Federal Government are yet to pass laws to prevent their rise, what’s the delay?

MATHIAS CORMANN: There is no delay. That is an issue for ongoing conversation within the Parliament and at some point these issues will be resolved. That is actually not something that is in my area of responsibility.

JOURNALIST: Sure but will it be before the next federal election?

MATHIAS CORMANN: That is not a matter for me to comment on.

JOURNALIST: Can you just tell your constituents, the people of WA, why you put the interests of primarily of the East coast ahead of WA?

MATHIAS CORMANN: I completely reject the premise of that question. 

JOURNALIST: You’ve said it yourself..

MATHIAS CORMANN: I completely reject the premise of that question. 

JOURNALIST: Well you could, by standing up for GST right now in support of WA getting its fair share?

MATHIAS CORMANN: Again, let’s be very clear, as a Minister in the national government it is my job to consider and make decisions in the national interest. To consider all of the legitimate and diverse perspectives from right across Australia, that is what we do, the same way as Colin Barnett considers the interests of the people in Joondalup, the people of Mirrabooka and the people of Kununurra, Geraldton, Bunbury, Esperance, you name it… interrupted

JOURNALIST: And they’d be better off with a fairer share of the GST, Minister.

MATHIAS CORMANN: Well, I would encourage the State government in Western Australia and indeed all Western Australians to participate in the Tax White Paper review process over the next twelve months. These things have to be considered in a way that is nationally fair. It is not the job of a national Government to side with one State against other States.  It is the job of a national Government to consider the legitimate perspectives of all and then to make judgements about the best way forward. Thank you.

COLIN BARNETT: Right any other issues.

JOURNALIST: Can I just ask one more about the Perth Freight Link. Can the Government actually afford this project? What convinced you to put this money out?

COLIN BARNETT: Well the project is a good project in the first place. It very much improves the competitiveness of industry. It will help attract investment and it will be safer for people in the Southern suburbs by getting heavy vehicles off the other roads. So it’s a good project and it stands  up to any economic valuation. In terms of our contribution, the State Government’s contributing 40 per cent of the cost. The Commonwealth, I think are very generously 60 per cent. So it’s a good deal financially and has been explained there will be a user charge on heavy vehicles, which will cover the immediate cost to the State and over time probably even repay the capital expenditure.

JOURNALIST: Does the spending for this go into the mid-year review?

COLIN BARNETT: Yes it will be.

JOURNALIST: What about revenue from the toll aspect...?

COLIN BARNETT: We haven’t been able to estimate that. There may be an estimate I’m not sure.

JOURNALIST: Sure, but in the short term it adds to debt?

COLIN BARNETT: Yes it will. And it will add to debt once it’s built, but we expect to recover that over time. Maybe over many years. But it is a good project and this one certainly stands up for Western Australia.

JOURNALIST: Are you prepared for some strong backlash – just cast my mind back when Farrington Road was put through, people were chaining themselves, there were bulldozers and the like, and the issue is quite heated in the area around the Beeliar wetlands. Are you prepared for that? 

COLIN BARNETT: Well I expect there will be that. The Beeliar wetlands had had environmental approval. There is still some aspects of that to be finalised. We expect that there will be strict conditions and the State Government will comply with that. But look I am absolutely confident that the wet lands will not be damaged. There will be disruption during the construction obviously, public will have better access, the quality of the water, the protection of the wildlife in the area is assured. And you can do both things together.

JOURNALIST: It is pretty hard to protect the wetlands if you put a road in it.

COLIN BARNETT: Well the road may go over the top. But there are options, you could have made it elevated above the water. Look, there will be access for animals, birds, fish whatever to migrate to ...interrupted

JOURNALIST: Has that been taken into consideration as to the costs though?

COLIN BARNETT: Yes it is, yes. So good engineering can combine with environmental protection and I truthfully say this, the area will be enhanced. The public will have access to it and the wildlife will have a better environment, a safer environment. And as was said earlier by Dean Nalder, we would Be able to maintain the water levels so it doesn’t dry out.

JOURNALIST: Do you expect clashes with the protesters or their opponents?

COLIN BARNETT: I am sure there will be a protest movement. But this has been through an environmental process. There are some final aspects to be determined. But it will be greatly to the overall benefit of the community. And indeed, good engineering design, good environmental design and management means that you can do major infrastructure projects without damaging the environment and Western Australia has a good record of that.

JOURNALIST: With user pays road projects in other states there’s been instances where some traffic routes have been cut off to vehicles to funnel traffic into the road that’s tolled. Is that something you are going to consider as a Government? That you may ban heavy vehicles from alternate routes and funnel them into this route?

COLIN BARNETT: That is possible on the very heavy vehicles, not lighter commercial vehicles. I have got no doubt that when we finally strike the arrangement over the pricing of heavy vehicles using this new road, it will be financially to their advantage to use it. And it will be structured that way. You will find the heavy vehicles will use this new road. There are savings in fuel, in time, and wear and tear on vehicles will certainly make that the way they’ll act.

JOURNALIST: Are you saying that savings to truck operators will be greater than whatever they tolled?


JOURNALIST: There is also a distinction between big trucks, heavy trucks and say courier vans. Is the toll apply to say a commercial vehicle as opposed to private vehicles?

COLIN BARNETT: That criteria will be set but we are talking about heavy vehicles. We are not talking about utes, or small vans and the like. We are talking about heavy vehicles carrying bulk products, construction equipment that type of thing. You only have to look down Leach Highway and every 30 seconds one will go past.

JOURNALIST: How will you actually ensure that they will actually use the GPS? Is there any legislation needed to enforce it?

COLIN BARNETT: Yes, that will be required. Those vehicles above a certain weight and definition will be required to have GPS fitted.

JOURNALIST: Premier, pop up parties were an issue at the Senate re-run election we had here in WA. Would you like to see more reform in that area? In terms of changing how many people are needed to register a party?

COLIN BARNETT: Yeah, I think there does need to be. You don’t want to in anyway limit our democracy at any level of government. But I think when you find people getting elected with say one per cent of the vote, that is not democracy.

JOURNALIST: What about in terms of requiring a Senator, a person running as a Senator candidate to have to come from the State in which their running? Would you like to see that?

COLIN BARNETT: It is desirable, but I don’t think it is necessary. We don’t want to make our law too restrictive. People should be able to stand for office, but I think the way in which some elections have effectively been gamed to get candidates elected where they’ve got virtually no support  from the public, that is not a democratic outcome.

JOURNALIST: We’ve seen that at the Victorian State election. Would you be looking for any law reform before the next State election?

COLIN BARNETT: We will look at experience. There are no changes proposed. Maybe ask Mathias, but there may well be some changes at a Federal level. I don’t think people want to see individuals with which no electoral support get elected into positions of Parliament and therefore positions of power.

JOURNALIST: What did you make of the Finance Minister’s comments on the GST?

COLIN BARNETT: I didn’t hear them. I am sure they were very well reasoned. Look the OECD comments? The OECD makes a point. Australia has a relatively low level of GST compared to most developed countries. So the argument as it was 15 years ago, if you introduce or raise a GST, you will want to see compensation in the form of lower income and company taxes to change the tax mix. For Western Australia, the major issue is the distribution of the GST so we are not going to be entertaining a rise in the rate of the GST unless that is accompanied by reform to the distribution, very simple position. Otherwise, Western Australians will be paying more GST to see it all go over to the East coast. 

JOURNALIST: Does more funding for infrastructure like the Perth Freight Link replace the fall in GST share to WA?

COLIN BARNETT: No it doesn’t. They are separate issues and the Commonwealth’s contribution to this has been just fantastic along with the Swan Valley Bypass and the Gateway Project and indeed Great Eastern Highway. I am very happy with the relationship around roads. But the GST is a separate issue and that is funding that was put in place to be a source of revenue for the States, which primarily gets spent on education and health. So they are separate issues but we can keep them separate intellectually I think Josh. And this is a great result, this project.

JOURNALIST: Do you think that the GST has to be a State’s tax? Would you yield that to the Commonwealth for a better general tax distribution back to the states?

COLIN BARNETT: I would be doubtful about that. I think one of the reforms of the GST was to make direct taxes, that’s income tax and company tax solely a revenue source for the Commonwealth and the GST solely a revenue source for the States. I think that principle that John Howard put in place is the correct one.

JOURNALIST: Premier, can I just ask you one more about the Freight Link. What’s now being proposed is tolling for heavy vehicles all the way from Muchea to Fremantle. Previously that Perth to Darwin Highway link was going to be toll free, is that a broken promise?

COLIN BARNETT: No, it is not. And to have an integrated Freight Link that connects Fremantle, Kwinana through to the airport precinct and all the wholesale outfits there and ultimately through to the Northern State, the trucking industry understands that well. You can’t just access one bit of it and pay and not pay for another bit. It is an integrated system and to be able to travel without a stop sign, without an intersection, all the way through is a huge boost to the transport industry and the transport industry in this State is an immense industry. We talk about farming and mining, but just look at that component, transport is a huge industry. 

JOURNALIST: Are we likely to now see any other heavy vehicle charges on existing roads? Any other projects?

COLIN BARNETT: No, that is not proposed.

JOURNALIST: Hypothetically, when you have a WA Senator who becomes a Federal Minister, in whose interests should they be acting?

COLIN BARNETT: Well if you are talking about my friend Mathias, his heart is very much in Western Australia.

JOURNALIST: Premier, why do you think that the Federal Government is so staunch in refusing to alter the GST in light of WA’s ailing finances?

COLIN BARNETT: Well it is one of those issues where the Federal Government can change the distribution, only the States with the agreement of the Commonwealth can change the level or the coverage of GST. So it has been designed that way to make it hard to change and it is hard to change, we are finding that out. Okay, thank you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth