House of Representatives Committees

House Standing Committee on Infrastructure, Transport, Regional Development and Local Government
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Transcript: Conference Opening

Conference met at 9.06 am

CHAIR (Ms King)—Welcome, everybody here today. We are a little bit behind schedule, but we will try to make up the time during the course of proceedings. My name is Catherine King, and I am chair of the Standing Committee on Infrastructure, Transport, Regional Development and Local Government. First, I acknowledge the traditional owners of the land on which we gather and pay my respects to elders past and present.

Welcome to the 2010 Think Future conference. I believe it was Abraham Lincoln who said that one of the best things about the future is that it comes one day at a time. It is our hope that today will be a singly useful and interesting one for all of you here. My committee is holding this inquiry to foster discussion, ideas and networks about smart infrastructure in Australia. We hope this event will identify areas for future consideration as our inquiry into this area progresses. At a later date the committee will be calling for submissions and holding public hearings.

Before we get underway, I will share three quick facts that I took out of a NICTA paper that was presented to us earlier this week. First, in Australia’s eight capital cities the movement of goods is expected to grow by 70 per cent between 2003 and 2020, with the resulting effect on our air quality, productivity, congestion and commuting and work times. Second, projections show that by 2020 the avoidable cost of congestion in Australia’s major cities will rise to $20.4 billion. That is up from approximately $9.4 billion in 2005. Third, the average Australian mobile phone chip now has the same order of computing speed as a multinational company used a decade ago for a fraction of the cost. It is possibly these three facts—the growth in the volume of transport over the next two decades, the effect of growth on our cities and where we live and the accompanying ability of technology to meet these challenges—that neatly sum up what smart infrastructure is trying to resolve.

We have gathered today an enormous breadth of expertise and knowledge. Our speakers are leaders in their fields and are at the forefront of smart infrastructure thinking and strategy. It is our hope that you will be challenged, stimulated and encouraged by what you hear today. Before we start, I have just a few housekeeping matters. Today’s program and other general information can be found in your delegates’ pack. Conference staff all have lanyards to identify themselves; please ask them any questions you may have. Because of the large number of presentations we have today, I ask that you be punctual in returning from breaks. In addition, our last session will be an interactive dialogue between you and members of the committee who are here with us today and whom I will introduce at that time, and I ask that you take note of your questions and keep them for then.

Our opening speaker today was first elected to federal parliament in 1996 as the member for Grayndler. On 3 December 2007 he was sworn in as Minister for Infrastructure, Transport, Regional Development and Local Government. Since that time the Hon. Anthony Albanese has been a passionate and forward-looking advocate within this government for infrastructure investment and the opportunities presented by embedding smart systems into that infrastructure. Ladies and gentlemen, please welcome Anthony Albanese.

Opening Address [9.10 am]

ALBANESE, Mr Anthony, Minister for Infrastructure, Transport, Regional Development and Local Government

Mr Albanese—Thanks very much, Catherine. I too wish to acknowledge the traditional owners of country and pay my respects to their elders, past and present. Through Catherine King, the chair of the House of Representatives committee, to Paul Neville, the Deputy Chair of the committee, Ian Macfarlane, the shadow minister and John Sullivan, the member for Longman—friends one and all. This is a gathering of some of the best and the brightest of the public and private sectors, to look at a topic of great interest. The fact that 200 people have shown up to a forum such as this, to launch this inquiry, shows that it is timely that the committee is devoting its time and energy to the issue of smart infrastructure.

I want to congratulate Catherine and her committee for the way that they have begun this inquiry and conducted it so far. Ministers can give a committee a brief. Once that happens, though, it is up to the committee to take the ball and run with it. This is an example of the parliament working as it should—not just parliamentarians talking to each other but parliamentarians reaching out and making sure that we have the widest input of views as possible on these issues. I want to thank the speakers who have given up their time to come here today. This is indeed a very impressive gathering, and I am sure it will be an extraordinarily productive day and kick-off to the inquiry.

This is an opportunity to look at these issues with fresh eyes. It is an opportunity to get submissions from individuals, from businesses, from public sector organisations, from the academic sector and from consumers of infrastructure about the direction as we move forward. Importantly, it is a chance to break out of the silo approach, which is taken too often. That is the reason why I am the minister for infrastructure, rather than just transport, and I am pleased that the opposition have a shadow minister for infrastructure. I have said that I am the first minister for infrastructure but I will not be the last. It is clear that over a period of time there will be a recognition that you actually need to look at systems as a whole and how they integrate. With this inquiry looking at transport, energy, water and communications and how they all interlink, I think there is a real prospect of moving forward.

Take the example that Catherine raised, of communications. One of the issues about the National Broadband Network is that it is a transport system in the digital age. It will change the way that workplaces work. It will change the nature of how people use our road and rail systems. It is one of the great challenges in this nation, where we have some 22 million Australians spread across this vast continent. For us, the National Broadband Network is particularly important. This week, we had a bit of debate about the report that I released last week, State of Australian cities 2010. I want to quote one of the responses to this—not to have a go at the response, of course, because we always like our friends in the media, but to say to you what the challenge is. The Sydney Morning Herald editorial on Monday spoke about ‘fluffiness’ with regard to the state of the cities report. It said it is:

… fluffy about remedies. There is much talk of “liveability” and something called “smart infrastructure” that is to be—

and this is quoting me—

“a central component of the shift towards a systems approach”.

They conclude that with help. They have no idea. I rang the editor about smart infrastructure. It is lot of things; it is not fluffy. It is central to the economic debate in this country; it is central to the employment debate; it is central to the debate that we have to have about our cities. That was an indication that we have a way to go in lifting up that debate.

One of the things that inquiries do is take an issue that is underground—an issue that is being spoken about in the boardrooms, in the government, in the opposition and in the parliament—and through the input of you today and through the activities of this committee, you are changing things through that process. Part of change is about lifting up that debate and being able to create a momentum behind change across the economic and social sphere that then has an impact on the political debate in this country. So I am very pleased. I am also pleased that Ian Macfarlane will be contributing today. It is appropriate that we move forward wherever we can in a bipartisan way. Ian has substantial credentials in being prepared to do that on other issues. This is a committee, by the way, for everyone’s information, that has, through Catherine and Paul, some leadership, and the membership of the committee work in a bipartisan way and produce some really good work, particularly on freight systems, shipping and other issues. I would look forward to that being consistent.

I would like to make some comments about infrastructure, the government’s objectives and how we have set about achieving them. The first thing that we did was lay a foundation for infrastructure policy development. We did that by establishing Infrastructure Australia. It is an approach that brings together the three tiers of government as well as representatives of the private sector. The board is chaired by Sir Rod Eddington, someone who has a great deal of experience across the infrastructure sector. The role of Infrastructure Australia is not to fund anything. I often get correspondence saying, ‘We want Infrastructure Australia funding.’ Infrastructure Australia does not provide funding; it is not that sort of body. It is an advisory council. It is an advisory council on two separate issues. Firstly, it has developed an audit of Australian infrastructure—what we have and what we will need into the future. It has developed an infrastructure priority list and a pipeline of projects on which it makes recommendations to the government and then the government makes decisions on that. Were it a funding body you would have difficulty attracting anyone from the private sector to participate because of conflict of interest issues, which is why we have established the structure which is there. Secondly, and perhaps more importantly in the longer run, it is about an appropriate regulatory regime. What are the policy changes that can be made? The first piece of work that it did was on public-private partnership guidelines—getting some uniformity there. It is doing work on reducing cost to business for bidding on projects. It is developing a national freight strategy. It is developing a national port strategy. That work—not as sexy in terms of the headlines in the tabloids—is just as important in the long term. It is an important task we have given Infrastructure Australia.

At the same time the government have invested in infrastructure. We have doubled our investment in road funding. We have quadrupled our investment in rail funding. We have the first ever significant investment in water infrastructure for our cities. We have changed the way that we deal with infrastructure because we recognise that, unlike former programs, you need to have an approach that does not look at road or rail and does not look at regional or urban but actually looks at the integration of the cities as a whole. We recognise that everything is connected to everything else, and that is an important component when it comes to smart infrastructure and the role that smart infrastructure can play into the future.

‘Smart infrastructure’ is shorthand for innovative, technology based, adaptive infrastructure—infrastructure that, once built, could serve our economy’s needs for the rest of this century and beyond. Not long ago, this was a bit of a New Age concept. When I announced the establishment of this inquiry, I flagged the enormous potential to apply advances in information technology to tackle bottlenecks and urban congestion. Australians are now beginning to see practical, everyday examples of smart infrastructure, such as traffic signals in Sydney and Melbourne that prioritise bus flow. Our investment in the Kwinana Freeway in Perth will help install advanced technologies, like variable speed limits and lane management systems. When complete, road users will get real-time traffic information, freight vehicles will get priority access when it is needed and all will benefit from a safer and more integrated road and transport system.

In energy, there is our $100 million investment in the Smart Grid, Smart City demonstration project. This trials advanced grid technologies to improve energy efficiency to homes and businesses. Technologies that allow power generators to manage and control real-time grid performance, meaning more reliable, efficient electricity, less energy loss and less greenhouse gas emissions.

Of course, we know from the experience overseas that increased reliability is nothing to sniff at. In the United States, the Department of Energy recently funded smart grid technologies which are helping reduce outages and disruptions that account for more than a quarter of electricity costs. So it is fair to say that even the first-generation applications are proving their mettle and improving our management of congested cities.
There are lots of good ideas out there, and this inquiry and today’s conference are about harnessing them. We need, however, that broader focus. When I studied economics at university—and, indeed, at school with Mr Boreham here—we were told to look at our economy as a system of moving parts where change to one section had an impact across the whole system. We need to look at infrastructure in very much that way.
It is clear when it comes to transport that you cannot plan the moving of goods without also planning the movement of people. When it comes to Sydney, the number of times I have had to explain that the Northern Sydney freight line and the Moorebank intermodal terminal and those plans for freight are actually about improving the passenger services—it is extremely difficult. However, we need to get the message through about those interrelationships between systems.

I want to run through as well some of the other systems that we need to change. I want to run through four reforms that we have done. First is the IA process. As part of that also I will add one thing to what I have already said, which is about the formation of a national transport regulator. One of the issues that we have to look at if we are going to apply smart infrastructure across the economy is breaking down some of the state-by-state approaches. It is absurd that we have nine rail safety regulators in this country. It is absurd that we have seven maritime regulators. It is lucky the ACT does not have an ocean or we would have eight. We need to look at these systems as we move forward. A single national transport regulator is a major national microeconomic reform and one that we need to continue to drive.

Secondly, I want to point out to you that the COAG Infrastructure Working Group is also playing an important role. It is a group that I chair and it brings together the state and territory bureaucracies, essentially, from around the nation. It is pretty clear that one of the things that we need is not just new investment but to look at how smart infrastructure enables us to use existing infrastructure better and get more out of it. Governments and the private sector do not have bottomless pits of money, so we need to look at how we can use existing infrastructure better.
There are real examples out there. One I want to point out to you is at Albion Park, which is in the south of Wollongong in New South Wales. It had the busiest regional intersection in Australia. A $700,000 investment there has installed traffic cameras and uses specially designed algorithms to moderate traffic flows. This is a project between NICTA, who are participating today, and the New South Wales RTA. The result has been an increase in the intersection’s capacity, such that a planned project of $20 million to fix it will not be needed for another decade. It was a $700,000 investment, rather than a $20 million investment—therefore, freeing up money for other projects. It was a smart way to use smart infrastructure. Smart infrastructure is smart financing for government and for the private sector.

The third issue I want to draw to your attention is the State of Australian cities 2010 report. As Catherine pointed out in her introduction, the costs of urban congestion with no action taken were estimated by the Bureau of Infrastructure, Transport and Regional Economics at $20 billion. This is an economic issue about productivity, but I want to say this: it is also a social issue. If you look at social issues such as domestic violence and family break-ups, a direct correlation can be given between the rates at which social breakdowns and divisions occur and travelling times to and from work. If you actually track it by suburb, you can see a relationship there. It is a fact that many working parents spend more time travelling to and from work in their car than they spend having quality time with their kids at home. So we need to look at those issues as social issues, not just economic issues.

The fourth issue that I want to raise is communications and how they fit in. I have already spoken about the National Broadband Network but I want to mention again just a couple of examples of how it is working. The Rudd government has invested some $45 million to trial advanced train management systems in South Australia. These deploy satellite based GPS and wireless broadband communications to manage train movements. This is having a major impact on efficiency and is an example of where we have federal cooperation leading to good outcomes. If this is successful, the Australian Rail Track Corporation will look to rolling out this technology across our interstate and Hunter Valley networks, replacing ageing physical land based control and signalling systems and permanently increasing the capacity of the rail network. It is simple improvements like these that Access Economics estimates could boost GDP by up to $13 billion a year.

Some of this change was initiated by the former government but until very recently, when I became the minister, on the freight lines in northern New South Wales the crew still had to stop, physically get out of the train and go through a ticketing system in order to get access to the next section of the network. I actually thought they were joking when I got that briefing. We know that smart infrastructure when applied to rail will improve reliability, and deliver cost savings and the ability for more trains to travel on the network at any one time. This is just a practical example of how communications and the application of broadband technology could revolutionise the way that our economy functions.

In conclusion I want to say, as ministers tend to do, that I come with an announcement. Today, I am pleased to announce the establishment of two Australian government smart infrastructure awards. These will champion on the national stage excellent design that delivers innovative solutions to infrastructure challenges. We are doing this for the same reason that you are having this inquiry: to lift up public debate and to challenge people and organisations in the application of smart infrastructure. The major award will be the Australian Smart Infrastructure Award for an infrastructure project that embeds innovative technology solutions in one of the seven priority areas that Infrastructure Australia has identified. The second award will be the Smart Infrastructure Research Award, with a research grant of $25,000 to an individual for a smart infrastructure research proposal—again, in one of Infrastructure Australia’s priority fields.

The nomination process for the inaugural 2010 awards starts today and closes on 14 May. I urge you to get word out and ensure that we have a substantial number of nominees, some of which, I am sure, might come from among the people in this room. Structurally, we are designing the awards to reflect the way that we see the rollout of smart infrastructure, which is not just about government; it is about government and the private sector working in partnership. Hence, I announce that Infrastructure Partnerships Australia—Brendan Lyon, its Executive Director, is here today—has generously agreed to host the awards from 2011. We think that picking up the expertise of the peak private sector organisation is a good way to go and is a great example in practical terms of the public and private sectors working together.

Last night the IPA had its annual awards. It was a very impressive line-up. I want to congratulate all the 2010 IPA award winners, especially the Port of Melbourne Corporation’s channel-deepening project for its well-deserved recognition as project of the year. As someone who supported the project, which was a bit controversial, I am particularly pleased that some of the doomsayers about that project were proven wrong. It is a major economic productivity project for the nation and it is one in which smart infrastructure and best technology were used to ensure that there was a good sustainable outcome as well as a good economic outcome.

Let me conclude by making the point that today’s discussion is just a beginning. I look back to the time when I began working in this building. I worked for Tom Uren, who was the Minister for Administrative Services and was therefore in charge of the building, government purchasing et cetera. He was also the Minister for Local Government. I sat in Old Parliament House with a typewriter; I did not have a mobile phone. But new technology was coming through—we got a fax machine. We got one of the first fax machines because we controlled the rollout, so we gave it to ourselves—as you would. We thought this was fantastic—this machine that you could put a bit of paper on and where the paper popped out at another end. It seems so simple to my nine-year-old, who is better with IT than I am and who would be horrified to think that it never existed. We thought this was great. There was just one problem: no-one else that we knew, except the Prime Minister, had a fax machine. So not only could we not send anything, except to the PM’s office to check it was working; we never got anything out of it either.

That was not that long ago. It was during our lifetimes. Even during my time in parliament—within 12 years—the application of technology has revolutionised the way that we work. Not all of it has been positive in a social sense, in the terms of the number of emails that we get! What we need to do—and it is the role of the parliament—is to provide leadership on these issues: get ahead of the game in terms of where the country is going and, as the world becomes a more globalised place, understand the way the globe is going, so that we play a role in ensuring that Australia does what it does best—which is, get ahead of the game and be a world leader. We have an opportunity to do that. I think this committee has an important role to play in providing that leadership for Australia.

CHAIR—Thank you very much, Minister, for that challenging address and for setting the scene so well, not only well in terms of the challenge the committee has in undertaking this inquiry, but the important role that everybody in this room plays in lifting the importance of smart infrastructure up into the public debate. I thank you very much for agreeing to open to conference and also for your very challenging presentation.

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