Distinguished Guests, Ladies and Gentlemen,

It is a great pleasure to be here today and I thank Greg Pearce for the opportunity to discuss one of the most important issues on which the next election will be fought – infrastructure and the rebuilding of New South Wales.

On March 24 next year - less than a year from now – the people of New South Wales will have a clear choice and an historic opportunity to change the government.

This opportunity will not just be about changing a government for change sake.

It will be an opportunity to revitalise our economy.

It will be an opportunity to restore the confidence of our people and our communities.

It will be an opportunity to regain our status as Australia’s leading state.

And, most importantly, it will be an opportunity to rebuild our State’s infrastructure and services.

Today I would like to talk about how my government will achieve this vital goal – rebuilding our state’s ailing and ageing infrastructure.

Everyone in this room knows that our State is suffering from eleven years of neglect and underinvestment in infrastructure.

The government’s failure to maintain and renew our infrastructure is hurting people throughout our state on a daily basis – as they travel to work or need hospital services or suffer in a poorly maintained classroom.

We hear about and read about the horror stories constantly – sadly, they are now a part of living in New South Wales.

The road networks are clogged and congested - and the Cross City Tunnel has become a symbol of all that is wrong with how this government does business.

They did a deal behind closed doors that sold off freedom of movement for motorists and slugged the public with higher tolls to help fund a $97 million revenue grab for the RTA.

So the tunnel that was meant to solve the city’s traffic problems has just created more chaos and congestion.

And to add insult to injury for Sydney motorists and taxpayers Carl Scully says he has no regrets and he is proud of the deal he did.

The NSW rail network is run down and our buses and ferries are consistently failing to deliver the services the community needs.

Electricity substations are failing and there is no plan for the increased generation capacity our community needs now and into the future.

NSW’s water infrastructure is badly in need of maintenance and upgrading, as are our wastewater and storm water systems.

In fact Sydney Water loses 10% of its drinking water through pipeline leaks and burst water mains.

Our social infrastructure – our hospitals, schools, preschools and basic community services are all suffering from underinvestment and neglect.

And the poor condition of our infrastructure is one of the main reasons why our economy has slowed because high quality, well planned, accessible infrastructure is the essential foundation of economic growth.

A decade ago, the NSW economy was Australia’s economic engine room.

We led Australia by so many measures of economic growth and the living standards of our people were rising accordingly.

Today NSW is a dead weight on the Australian economy.

Our economic performance lags behind the other states and we have record taxes, above average unemployment and a budget deficit that has led to a rationing of funds for basic services.

Make no mistake – this underinvestment in infrastructure and services is the result of the Labor Government’s mismanagement of the budget and the state’s finances over eleven years.

And the effect of Labor’s underinvestment will be felt for a long time to come, unless we put a halt to the cycle of decline and start rebuilding our State.

In government, the Coalition will restore budget discipline in New South Wales.

My government will stop the cycle of decline by aggressively encouraging the investment and jobs growth that will bring the NSW economy back to the forefront of national leadership.

And a critical cornerstone of the strategy to achieve this will be to revitalise investment in infrastructure and rebuild NSW.

It’s a big task that will require political will and hard decisions – and it’s a task the current government is simply not up to.

In this, the final months of a tired, long term Labor Government, the mantle has been passed on by Bob Carr, Michael Egan and Andrew Refshauge to one of the poorest qualified groups of Ministers ever to lead our State.

The Premier and the Ministers who are now responsible for infrastructure in NSW are a cabal of Labor mates who have grown up through the ranks of the Carr Government and finally clawed their way to the top.

They are back room operators, party officials and union hacks – a closed shop that have done deals together for years and put their own advancement and interests before anything else.

They are not representative of the community and they are not responsive to its needs.

Let’s look at the Ministers currently responsible for infrastructure provision in NSW –

• The Premier, Morris Iemma, is a former Federal Labor staffer and backroom numbers man – he was promoted into the top job because the only other contender, Carl Scully, had such a terrible public image.

• The Minister for Commerce and Minister for Industrial Relations John Della Bosca is the former State Secretary of the NSW Labor Party

• The Minister for Roads, Eric Roozendaal, is another former State Secretary of the NSW Labor Party.  He was Della Bosca’s understudy for many years and followed him into the job.

• The Treasurer and Minister for Infrastructure, Michael Costa - after an interesting track record as an active Trotskyist at school and a member of the Socialist Workers Party at University - rose to be the Head of the NSW Labor Council before entering Parliament and becoming Treasurer.

• And our Minister for Energy, Minister for Ports and Waterways and Minister Assisting the Treasurer, Joe Tripodi, also worked at the NSW Labor Council and has been frequently described as simply a right wing factional warrior.

This is a Government of the NSW Labor machine – a government that believes infrastructure provision is a political and bureaucratic process to be managed purely for electoral outcomes.

Let’s look at how this Government deals with infrastructure planning and investment – and, consequently, what you - the private sector - have to deal with.

For many years they have called their approach to public-private partnerships “working with government.”

But can anyone in this room truly say they understand how to work with this government in the provision of infrastructure?

Can anyone in this room truly say they understand the government’s policy on PPP’s, their priorities for infrastructure projects, their plans for the future or the right area of government to talk to about a project?

They have so many different people, agencies and processes responsible for infrastructure that even senior people in the government have lost track of how it is all meant to work.

It’s important to note the scale of what we are talking about in New South Wales – the size of the responsibility we have entrusted to this government.

According to the 2005-06 Budget Papers there are $167.8bn in State owned physical assets. The same budget claimed $8.2bn in capital expenditure and $2.3bn in physical asset maintenance - big numbers by any account.

But how does this government handle that responsibility?

Their process for infrastructure delivery is worse than Barry Jones’ infamous 2001 ‘Noodle Nation’ Labor education plan! (see attachment).

And the result of all this is the cycle of inertia and crisis we all know so well.

New South Wales has now suffered the 8^th Labor infrastructure ‘grand plan’ in 5 years:

We have had…

-         The NSW Infrastructure Council in 2000 that didn’t meet for 18 months

-         The Christie Report on transport infrastructure

-         The State Infrastructure Strategic Plan in 2002 – with nearly one in every four projects delayed, one in ten abandoned or downsized; and budget over-runs in excess of $752 million.

-         The promise of around 100 potential PFP/PPP ‘emerging opportunities’ out of the Strategic Plan – which in reality were mostly just traditional Design and Construct, rather than true PPPs

-         Bob Carr’s March 2005 infrastructure plan re-announcement (complete with hard hat in a tunnel) – which was deservedly panned by commentators

-         Then the Metro Strategy, which started with great promise but ended up two years late and with no infrastructure dollars. It’s a shadow of what it should have been, despite the great work and inspiration of world planning experts like Prof Ed Blakely, and the time, money and intellectual capital invested by industry advocates

-         and now we have  ‘ Spaghetti State’, and 

-         the promise of a new ’10 year Infrastructure Strategy’ sometime before the Budget.

At a recent CEDA lunch, Government officials were working overtime to dampen expectations of what would be in this strategy. A senior treasury official made it clear that the ‘plan’ was not for public consumption because it may raise expectations that all those projects were real, and said “please don’t take it we are necessarily going to do those things”.

The bottom line is the Labor Government has no plan, no commitment and no political will.

THE LIBERAL NATIONALS APPROACH WILL BE VERY DIFFERENT.

Kickstarting New South Wales will be the number one priority of my government, starting with a series of fiscal measures to rein in spending, cut taxes, and make us competitive again.

We all understand there is a growth dividend from infrastructure spending if its properly targeted, fit for purpose and well managed.

Our infrastructure is central to achieving competitive advantage for NSW – and would be driven from the highest level of Government – the Premier.

Let me outline a series of Structural, and Administrative initiatives in our plan to kickstart infrastructure renewal in New South Wales.

First, I will ensure there is a clear, public, infrastructure plan for metropolitan Sydney and NSW that sets out priorities and projects for the near and long term.  This will include State and Federal projects.

Achieving this requires the full authority of the Premier.  Responsibility for setting and implementing the states infrastructure strategy will rest with me.

Silo-based infrastructure decision-making will end, as will separate road, transport, utility and other empires intent on their own agendas. There will be no more spaghetti state!

We will use the best of the successful Olympic Coordination Authority model to deliver a whole-of-government approach, for major infrastructure projects and significant developments do not suffer unnecessary bureaucratic delays.

It is also critical that the private sector remain involved in infrastructure delivery.

There are things the public sector does well – like tax.

And there are things the private sector does well.

Unlike Labor we see the private sector as a partner, not the enemy. We believe there is much greater scope to involve the private sector in public infrastructure and its planning.

To achieve this we will establish an Infrastructure Development Round Table, which I will chair and which will comprise relevant Ministers, Department Heads and business leaders.

Given the expected workload the Roundtable will meet every two months in our first year and every quarter from then, and will be tasked to:

-           undertake project identification and priorities (as a part of the state infrastructure plan);

-           recommend improvements to the bid process to reduce costs and delays to benefit all parties; and

-           pursue a national approach to PPPs, including better risk allocation models, standardising bid documentation, and continuing the progress already made through COAG and the National Reform Agenda

In a further initiative, we will invite representatives of NSW universities to participate on our Infrastructure Development Round Table. This will ensure the under-utilised intellectual and innovation capital of universities is integrated in the economic development of our state.

We will also adopt the best of the Partnerships UK model of public private interface, in a ‘Partnerships NSW’ entity. Its job will be to determine the best finance vehicle for each project on its merits – across a spectrum of options from full Treasury/ debt funding, to full private funding. 

We will ensure that each project is funded in the way that delivers optimum public value and outcomes for taxpayers and the community, by allocating risk and responsibility appropriately in any partnership.

To deliver better value to citizens, we will centrally negotiate all PPPs through ‘Partnerships NSW’. This entity will bring together the most experienced and brightest minds from government departments and agencies, as well as recruiting talent from the private sector.

We will also speed up planning decisions to help you get on with business.

Delays, indecision and disputes have delivered New South Wales the worst planning processes and outcomes in Australia.

One of the main reasons NSW has an electricity supply crisis is that despite the fact there are at least six private gas fired peak generation proposals in the starting blocks, the government won’t make planning decisions.

NSW is ‘running out’ – of water, electricity, industrial land, transport capacity, health service capacity, and skills – as a result of Labor’s failure to plan and implement.

As Premier, I will personally take charge of Infrastructure coordination and drive the integration of planning and major projects to kickstart New South Wales.

We will also end the paralysis of Labor’s planning and approval system, - with the creation of the infrastructure plan, and by resolving numerous and long over-due regional plans and LEPs across the State to give certainty to councils and investors.

We are committed to lifting the standards on public administration, particularly in the area of infrastructure delivery.

If we are to build more and better infrastructure, we have to reduce bid costs, especially for smaller projects. 

Partnerships NSW will ensure that there will no longer be a dozen different portfolios all with their own pet methodologies and documentation. 

This will reduce costs, enable greater standardisation of documentation and certainty in assessment procedures, and will also value add by enabling projects to be packaged in innovative ways with the private sector, so we get more bang for the buck than we can ever achieve now in existing silos.

Government must lift its own performance standards with clearer objectives, to avoid delays with re-bids, moving goalposts, abandonment of projects, and unnecessary levels of detail required before going into a fully documented bid. 

We need an appropriate balance between necessary probity protections, and an instructive flow of information between bidders and clients.

Despite the toughest probity rules in the country, the Cross City Tunnel was still a debacle, so clearly our mechanisms are failing to do the job people intended.

The Coalition will continue to consider ways to reduce bid costs and increase flexibility and efficiency in private sector project delivery, and we look forward to further industry input on possible specific reform

We understand that contractors need a steady project flow in order to retain skills in NSW, and keep costs low.   Once the CCT, the Westlink M7, (and soon the Lane Cove Tunnel) were complete, 10,500 jobs and all the skills involved had nowhere to go – except our rival Queensland.

We also understand the need to tighten up Government specifications to reduce uncertainty in bid design in those projects that are easy to prescribe and define.

However, we think the greatest value in the private sector is their capacity to innovate. We need people who are unafraid to think outside the square, who understand the bottom line, and want to build a better business and living environment.

We can do this by setting out the objectives we want to satisfy – not by prescribing the government’s limited experience of what a solution should be.

A good example is the current debacle on Sydney’s water needs. Labor ignored private sector and academic water technology innovation proposals for a decade while Sydney’s dams gradually emptied.  Water technology providers have been telling us for four years that these solutions exist if only government opened their mind beyond Sydney Water’s pipe and outfall mindset.

In contrast to the Government, we have been advocating large scale water recycling and re-use for non-potable purposes for several years. Providers have already been working with local governments around the country on a range of site-specific water reuse technologies on a small scale.

Many of which could, on a larger scale, contribute to a suite of water technology solutions around the Sydney Basin, all working to achieve necessary recycling targets to reduce pressure on our dam supplies – and eventually see the end of ocean outfalls.

A clever government in search of innovation would say to the market innovators ‘please give us proposals to meet an objective of recycling and reusing Sydney’s waste water and stormwater’. 

Yet the Government decided, against all expert advice, to pursue desalination with the outcomes we unfortunately are all now familiar with.

Procurement and asset management reform is also urgently needed.

Government must be a more informed buyer.  We spend $20 billion a year on salaries, $10 billion a year on maintenance and operations, and around $8 billion on infrastructure. 

Our asset management is wasteful and woefully under-managed.

Add to this the consequences of demographic change in the public sector, and it is inevitable that we must plan now to involve the private and NGO sectors in delivery of public sector services – with or without associated infrastructure.

There are no easy answers to this, but we also know that reputable companies and organizations want to participate in delivering better public services. Most are as sensitive to public reputations as elected officials.

Service contracts – especially where associated with social infrastructure and facilities, can be as long as 20 to 30 years.   We need to work with you.

We will have an active policy preference to acquire new facilities – whether they be school buildings, office space, or public housing – through the private market, where this is beneficial and delivers public value.

I’ve already signalled that in contrast to Labor who say they’ll spend millions of dollars on old-style publicly built and owned aged housing, we will meet the needs of these clients by renting housing from private sector providers.  This will give the government and its tenants greater flexibility, better housing, in better locations and will deliver better value for money to taxpayers.

Benchmarking is also essential if we are to know if the community is going to get a better deal out of a PPP.

Labor has carefully avoided proper benchmarking of government services and project costs. We will do it properly, so there can be confidence in the public sector comparator and competitive neutrality.

In 2004 we committed to real performance benchmarking across Government including;

1. Establishing a set of clear goals for Government and targets for every agency;

2. Publicly reporting on all agencies performance against the targets;

3. Ensuring the accuracy of this reporting by having the data signed off by the Auditor General; and

4. Benchmarking every agency’s costs and performance against available interstate and international data – both public and private sector.

On Budget Day we will publish the 10 year targets for every agency and report on agencies performance against such targets.

Money saved by better economic management will be redirected to tax cuts, better front line services, and better infrastructure. 

Better project management, lower costs, and revenue growth from economic growth will produce more capacity to renew our infrastructure.

I have outlined a fairly detailed range of reforms to give you a clear idea of how we would do things better,

But all these reforms are worthless unless we take the community with us.

The Cross City Tunnel saga has shown just how community sentiment can impact upon a project’s success.

It’s not in the interests of Government or business to have infrastructure projects create public fear, distrust and anger. This can be avoided if Government approaches infrastructure acquisition or changes in governance in an honest and transparent fashion.

I intend to involve the community in an open and honest discussion about future infrastructure projects and governance, stating with the state infrastructure plan.

The government should consult communities before, not after, the decision has been made.

Decisions should be made publicly, and final contract documentation, and the timetable of the process be made publicly available.

I welcome the unanimous support of infrastructure advocates in favour of public consultation and transparency.

Labor’s attempt to make short term cash gains from the Cross City Tunnel and forced road closures, and their fait-accompli fire sale of the Snowy Hydro are textbook cases or how NOT to handle infrastructure decisions.

The public mess that the Snowy Hydro float has become is the Cross City Tunnel all over again – Labor trying to sneak it through without the public knowing the detail.

The real issue with Snowy Hydro is what are they going to do with the money? 

Labor seems incapable of being upfront with the community and as a result their legacy will be their dramatic lowering of the standards of public administration.

Finally, the real reforms will only come with political will.

Restructure and reform is meaningless without political will.

• Political will to grow our economy.

• Political will to lift standards in public administration

• Political will to pursue better outcomes.

• Political will that this Labor government lost long ago.

So In conclusion let me repeat what I said earlier.

At the election next March there is a very clear choice.

The choice is between my team – a qualified team that can take New South Wales from a state of decline to a state of growth again.

A team that can bring sound leadership, good planning, clear direction, openness and genuine partnership to infrastructure development.

Or continuing with more of same – another four years of mismanagement, neglect and underinvestment in NSW infrastructure from a team of backroom political operators who put their political survival before the genuine interests of our State.

I think it’s actually quite clear – the public are tired of this Labor government and its political expediency and mismanagement and they are angry at the poor state of their infrastructure and services.

The people of NSW know our state faces some serious problems that will require hard decisions to address.

The Iemma Government won’t make those hard decisions, they will continue to run from them.

If elected I am committed to addressing these problems. The decisions I make won’t always be popular but they will be necessary.

And you will get honesty and action from me, not spin .

In the meantime, with ten months to go, I and the team I lead will continue to work to hold the Government to account, to lead the agenda where possible, and to win the election.

Because it is no longer simply the case that we want to win – we know we have to win for the sake of NSW.

Thankyou.