E&OE................................................................................................
ACTING PRIME MINISTER:
On behalf of the Government and in liaison with the portfolio Minister
responsible for the Infrastructure Borrowing Taxation Offset scheme,
IBTOS, that's Minister for Transport and Regional Services, John
Anderson, I'm pleased to make some announcements here today.
Subject to certain conditions the Federal Government expects to approve
four national infrastructure projects worth more than $900 million,
and they will receive this very valuable tax rebate and allow further
facilitation of the implementation of these projects.
The four projects which have been endorsed to this stage by the Federal
Cabinet are as follows: $400 million eastern gas pipeline which will
run from Longford, near Sale in Victoria, to Sydney, extending Australia's
gas distribution network; a $170 million construction of a new international
and domestic passenger terminal at Adelaide Airport, badly needed;
the building of a $154 million gas fired co-generation plant producing
electricity and steam for major manufacturing plants within the Botany
industrial area in Sydney; and assistance to Melbourne's City
Link Road project involving extension to Exhibition Street and production
of world-leading electronic transponder technology.
These are the first infrastructure projects that have qualified to
receive assistance under the Coalition's Infrastructure Borrowing
Tax Offset Scheme. The granting of tax offsets for these projects
will allow all of them to proceed with minimal delay. In highlighting
our commitment to nation building, it demonstrates the partnership
the governments can forge with the private sector to generate economic
growth, to sustain
further economic growth, in an economy growing well at the start of
1999 in sharp contrast to such places as Hong Kong, -8%; Korea, -6%;
and Japan, the second largest economy in the world, -2.6% at this
time. It's a perfect example of the Government's approach
to improving Australia's infrastructure which has such a major
impact on business costs, and the lowering of those costs. This assistance
will generate jobs and improve our environmental circumstance. It
is a win-win situation.
In terms of jobs, these projects offer the potential of up to 6,800
new jobs, with the bulk of them in fact being in regional Australia
in places like Sale, Bairnsdale, Orbost, Bombala, Cooma, Queanbeyan,
Nowra and Wollongong, as well as jobs extra in Adelaide, Melbourne
and Sydney. These projects will also contribute to the manufacture
of world beating technology, state of the art; reduction of greenhouse
gas emissions; and a reduction in traffic congestion, as well as increasing
tourism opportunities.
On the eastern gas pipeline, whilst there was just before Christmas
an announcement in respect of change of ownership with regard to that
project, this is the first time that the Federal Government has given
its clearance and it will involve economic benefits to many regional
centres. Not only will it provide reticulated gas to some areas for
the first time and contribute to a more competitive gas market elsewhere,
but further jobs will be created. 1,100 during construction and indirectly
up to 6,000 new jobs attached to that one project of the eastern gas
pipeline. A stronger national gas grid can reduce the likelihood of
the energy shortage that crippled Victoria for a period last year.
It will also help reduce greenhouse gas emissions by 2 million tonnes
annually by 2010.
The Adelaide Airport terminal, many of you would have been caught
in a thunderstorm, or on a frosty morning with the gate-less elements
of the Adelaide existing airport terminal. By the year 2001, the people
of Adelaide will have a state of the art domestic and international
terminal. As a crucial element of South Australia's economic
fabric the Adelaide Airport redevelopment can stimulate export growth,
increase revenue from inbound tourism, and promote Adelaide as a base
for complimentary capital investment. It will generate about 350 jobs
during construction, and directly contribute towards 800 permanent
new jobs.
The Melbourne City Link project, while aspects have been previously
announced, this is the clearance for a modified aspect of that key
City Link project which is of course well under construction at this
time. The Government assistance to the City Link project will help
deliver direct savings to the Victorian economy of about $265 million
annually. The City Link extension involved will further reduce traffic
congestion in Melbourne's streets. But just as importantly our
assistance towards the production of in-car transponders to be used
on City Link encourages the local manufacturers of world standard
technology to go ahead with an export program which would perhaps
not have otherwise taken place. 600,000 of these transponders will
be produced at the Melbourne factory which is the biggest order for
a road project any where in the world. The Government's assistance
helps ensure the adoption of a uniform national system for electric,
or electronic polling.
And then the Botany co-generation facility. The Government's
assistance to the construction of a Botany co-generation facility
will have a direct impact in reducing business costs for local industries,
encouraging a more competitive electricity market, and lowering greenhouse
gas missions in the Botany industrial area by an estimated 235,000
tonnes a year. It will generate economic savings of over $5 million
a year, and avoid a further $142 million in costs. These are powerful
economic arguments of providing the assistance. If it puts a spark
into my New South Wales State Coalition colleagues to get moving with
regard to their State election as they are now in real time, then
that might also help.
Not all projects that applied for a tax rebate under this scheme have
been successful. A number are in a second round for further consideration.
Others are in different categories. For example the Tumut super mill
involving Visy, that's in a separate category and it's been
approved by the Federal Government and announced just before Christmas.
And it's a very exciting project for the Riverina and Monaro
regions, the start of art brown craft mill which will be located at
a very useful site at Tumut. In fact over 30 projects Australia wide
applied, ranging from road, rail and port projects, to gas pipe lines
and electricity generating projects. Some of those have missed out
also. Of course, can be further considered down the track pursuant
to the second round as I mentioned. The Commissioner of Taxation is
likely to make a second call for projects under this IBTOS scheme
next month.
These four projects announced today still have some hoops to jump
through. However the successful projects have been advised of their
conditional approval and the conditions under which the rebate will
apply. Subject to that satisfactory environmental process and assessment,
my colleague John Anderson, the Minister for Transport and Regional
Services, expects to give the final approval to these projects in
detail. The rebate will also be subject to the financial arrangements
of the projects being satisfactory to the ATO. We don't expect
any great difficulty in that regard. If the arrangements are approved
formally then all the relevant parties will enter into the lock-in
agreements associated with the IBTOS scheme.
For a tax rebate of up to about $71 million over five years, today's
announcement ensures that $900 million worth of infrastructure projects
can commence without delay generating thousands of jobs, environmental
benefits and economic growth. It is a worthy investment in Australia's
future. It is the first formal clearance and announcement subject
to those conditions, under the restructured Infrastructure Borrowing
Tax Offset Scheme, which is the new scheme replacing the previous
scheme, the subject of some abuse and rorting in the past in which
both Peter Costello and now John Anderson in another capacity have
carriage of and I am very much pleased to make this announcement this
day on behalf of the Australian Government.
JOURNALIST:
Mr Fischer, is it fair to say that these four projects would have
proceeded regardless of the rebate scheme?
ACTING PRIME MINISTER:
Not absolutely....that cannot be absolutely said to be the case.
There is a fair chance that they would have otherwise proceeded. This
certainly makes the facilitation of these projects smoother and more
efficient, and I have no hesitation in stating that those directly
involved and the stakeholders directly involved will welcome this
facilitation.
JOURNALIST:
Mr Fischer, the Government's talked before about not picking
winners in terms of investment projects. How does the Government reconcile
that view about not picking out any particular industries in the decision
today to not grant these tax breaks.
ACTING PRIME MINISTER:
That's a fair question and that of course goes to the classic
arguments associated with that hoary old debate over picking winners.
In a perfect world, governments should set parameters and generic
programs and then step right back. But there is no such thing as an
absolute pure market place. There is no such thing as a level playing
field. And as a consequence glitches and points of congestion to occur.
It's with that in mind that on a very cautious basis, the Federal
Government has proceeded with the IBTOS scheme and what's more,
these projects are assessed against vigorous selection criteria which
is spelled out in the legislation. This is not just a hit and miss
process, a whim of a Cabinet Minister or ten. They are evaluated by
experts in the Department of Transport and Regional Services with
assistance from the Australian Tax Office. They are then considered
by an inter-departmental committee of officials. Recommendations then
go to the Employment and Infrastructure Committee of Cabinet as an
additional stage, then ultimately to the full Cabinet. It is a very
careful and rigorous process of selection, and as I say Cabinet now
has signed off on these four to this stage of approval under the process
and these are the first four. I think in 1999, the start of 1999 with
an economy growing at +5% there can be no complacency. That's
the figure historically for the last 12 months. The next 12 months
as we officially say, this will notch back. This is also an element
of activity and facilitation by the Federal Government to ensure onward
economic growth through what could be a very difficult trading period
world-wide.
JOURNALIST:
Mr Fischer, the total cost to Government is $71 million over five
years....
ACTING PRIME MINISTER:
Loss of revenue in a sense.
JOURNALIST:
[inaudible] revenue foregone, that's the total cost, there's
no additional cost as a result of this project ...?
ACTING PRIME MINISTER:
That is correct with regard to these four. But of course as they gather
momentum they will themselves generate additional revenue. There is
still money available within the cap for additional projects to be
approved. The scheme is capped at a total of $75 million per annum.
JOURNALIST:
Mr Fischer, you mentioned [inaudible] to go through. Can you say broadly
what they are?
ACTING PRIME MINISTER:
The criteria's straight out in the legislation. Basically they
have to stack up environmentally and be a environmental positive -
all things considered. They have to stack up in terms of sensible
broad parameters, and cost benefit, and not constitute yet another
disguised scheme from the big end of town to rort the payment of taxation.
And that's where the infrastructure bonds and other schemes went
wrong was the fact that the big end of town could climb into these
schemes, find the right apparatus to in fact get away with blue murder,
reduce their taxation exposure, but not actually do anything about
building actual infrastructure at the end of the day. The criteria,
laid out in the legislation, I refer you to that, but above all else
I don't underestimate, and neither would you my friend, the rigor
of the Australian Tax Office on a range of matters including ensuring
that these are not shonk projects but real and valuable projects.
JOURNALIST:
[inaudible] outstanding hoops to jump through.
ACTING PRIME MINISTER:
That is the process yet to come is the environmental final sign off.
Essentially they are through all other hoops and Cabinet has approved
to that stage.
JOURNALIST:
[inaudible] project in Queensland an applicant also under this scheme
and if so what's occurred with that project?
ACTING PRIME MINISTER:
Fair question and I just want to check but I think I am right in saying
that they are in another category, yes. And they are not - it's
always the case of coming in with too many papers - there's one
other page which will tell me that. They are in a separate category
as was Visy as I mentioned. If you like, for a rule of thumb description
they are in the Mansfield process. I would like to take this opportunity
to say I spent four days - unusually long period of time - quite deliberately
going to Papua New Guinea just a week before Christmas. I was uneasy
about the capability of that project to supply gas from the very challenging
terrain of that part of Papua New Guinea and the other difficulties
including the local politics associated with major resource projects
in Papua New Guinea. I am very pleased to say today that having gone
out to Lake Kutubu, having gone through the terrain of the existing
oil field, which will gradually move to gas production under the project,
I am well satisfied on two counts that it's up to the experts
to say the field of gas is there and I gather it is but also the way
they have put the infrastructure into that area is very careful and
very cunning and with great care and respect to the environment. I
am satisfied on that count. But more particularly the one thing I
really wanted to look at was the extent of village liaison and cooperation
the Port Moresby royalty equation that does other things doesn't
it. It is on the ground liaison and cooperation of the project with,
and I am pleased to say that there is a huge programme involved practically
with health education in the surrounding villages. A bit like Ok Tedi
And unlike what Bougainville did 20 years ago which laid the pathway
for all that happened there. I mean, there was a huge gap between
the project and the local people. I actually am very happy to say
that there's a lot of good news stories in Papua New Guinea.
One of the best I believe that the lateral thinking project to provide
a pipeline from Papua New Guinea to Gladstone stacks up in terms of
the ability of the equation at the start point and the ability to
produce the gas and supply the gas to feed into that pipeline.
JOURNALIST:
Mr Fischer, do the Commonwealth's most senior public servants
deserve a 40 per cent pay rise?
ACTING PRIME MINISTER:
Okay, any other questions on this and I'll come to that?
JOURNALIST:
[Inaudible]
ACTING PRIME MINISTER:
We've had an extraordinarily busy 1998. They're in various
stages of being processed. Bob Mansfield's been extremely busy.
There's no great delay but in the case of the pipeline I think
the next move is with private enterprise at Gladstone and that end
of the equation Cabinet stands ready and the Prime Minister, John
Howard, stands ready to really drive this process along with Minister
for Industry, Nick Minchin. And I don't anticipate any great
delays. We got Visy away before Christmas, but after the election
and quite deliberately so that the announcement might be seen in a
very non-partisan light and seen for what it is. Okay, now turning
to your question, you might care to repeat it although I do remember
it.
JOURNALIST:
Do the Commonwealth top public servants, most senior public servants
deserve a 40 per cent pay rise or can it be justified?
ACTING PRIME MINISTER:
Well, that's your figure, not mine. And at the end of the day
there is a process to be completed. I can confirm that no final decision
has been made with regard to the amount of pay increase for federal
public servants, senior federal public servants. The whole matter
is still before the remuneration tribunal. I note from some reports
today of suggestions of a very large pay rise. At the end of the process
I do not anticipate that it will be as large as has been variously
reported today. That, of course, leaves the situation where many senior
federal public servants will be below the pay levels of senior State
public servants. As I said on AM this morning, the Federal
Government has little choice but to properly remunerate senior public
servants so that we can have quality, cut-through, capable administrators.
And we have a very strong team of senior public servants. One of the
delights of being in Federal Government has been the very professional
high standard I have encountered with regard to the public service
in general and the senior public service specifically. We have slipped
behind the pace, and just to flesh that out one little bit more I
point out that for 1997 the Secretaries of Federal departments received
a 1.5 per cent pay increase. For 1998, they received a two per cent
pay increase. Compare that, happily in one sense, under 13 years of
the Federal Labor Government real earnings for Australians, there's
inflation adjusted wages and salaries rose by six per cent. But in
the two years the Federal Coalition has been in power the comparative
figure is in fact real wages rose by 10 per cent. So Australian workers
have had a 10 per cent pay rise in the first couple of years of the
Federal Coalition Government. It happens that senior federal public
servants have had a 3.5 per cent pay rise and there's been further
slippage against the State public servants. Now, I just would make
the point I really don't want to spend too much time in the position
of having to defend what has not yet been finally decided. But I will
defend the principle, the feds ultimately will get the quality of
service from their public service and their senior elements of their
public service for which we pay. And if we don't pay a reasonable
amount then we are going to have a drop off in that performance. I
might add, as the Prime Minister has pointed out, there's no
permanency any more. These are quite specific performance orientated
contracts and that factor should be taken into account.
JOURNALIST:
Has the Government recommended to the remuneration tribunal what the
pay rise should be?
ACTING PRIME MINISTER:
There's an ongoing process, it has not been completed. Ultimately
it comes back to the Government and therefore I cannot confirm or
deny any particular amount. But is the tribunal considering this matter?
Yes they are. Is there some proper liaison with the Government with
regard to that consideration? Yes there is - but that is internal
to the process of the Government. At the end of the day, will and
should we be paying senior federal public servants more? Yes we should.
And it is not the most popular cause to defend but these are the other
elements of having the privilege of being the Deputy Prime Minister
and Acting Prime Minister in the first fortnight of each January.
JOURNALIST:
Should Max Moore-Wilton be part of this process? He is basically pushing
the process that will give him a pay rise that's been reported
to be about $80,000?
ACTING PRIME MINISTER:
One thing about the Cabinet processes under John Howard is that he
does not hesitate to ask those directly affected by discussions in
the Cabinet room to leave the Cabinet room for the duration of those
discussions. Whilst I don't reveal the detailed operations of
Cabinet or the content of those discussions I will say on this occasion
that there's been rigorous application of that quite correct
practice.
JOURNALIST:
[Inaudible] fair, Mr Fischer?
ACTING PRIME MINISTER:
I am not an expert on the remuneration of public servants, federal
or State. But I am an expert on one other thing, this business of
credit cards being issued to State ministers of the Crown year on
year, used and abused. To be fair, they are very busy people, they'll
inevitably make mistakes, they will confuse personal payments with
proper payments which should be reimbursed by the Crown in relation
to their activities as ministers. If State public servants with their
big pay can't sort out one thing they might like to start 1999
by sorting out the credit card shamozzle at the State level which
has led to ministers having to resign, led to difficulties at various
States around this land. I, as Deputy Prime Minister of this country,
do not have a Commonwealth Government credit card. If I have an expenditure
as I belt through seven countries since polling day on working trade
Visyts I have to submit a cheque for that and get reimbursed or there's
another very tight process that applies. If it's good enough
for the Deputy Prime Minister of this country and all my ministerial
colleagues not to have a governmental credit card then perhaps these