Sydney - 20th August 2008

Address by Peter Debnam MP

Ladies and Gentlemen, thank you for the opportunity to join your discussions today.

And thank you for investing your time in discussing Infrastructure in a week when it’s hard enough to get through your normal workload as well as keep abreast of the Olympic updates. 

In the time available this morning, I’ll present a few ideas about the State Government’s role in infrastructure delivery and how to protect critical Infrastructure from a dysfunctional Government.

With the NSW Government in terminal decline, it’s clear that infrastructure failures have been a major contributing factor in the public’s loss of confidence in Morris Iemma and his ministers.

Now, a few months ago I was listening to a radio program discussing infrastructure failures and the program was attempting to explain why the projects keep going off the rails.

It actually took me a few minutes to realise they were NOT talking about NSW but in fact were discussing the same sort of project disasters under the UK Labour Government.

As the Director General of the UK Chamber of Commerce said “The UK is supposed to be an advanced industrial nation, ….. but we just seem unable to deliver high quality transport projects on time that work.”

A French engineer was quoted as saying “The politics have been mingling with the project management.”

In talking about a particular project he said “I experienced so much political meddling I could write a book on it. There was no way we could deliver on time and on budget. Politicians should not try and run a business or be creative. Let people with the proper skills do it.”

I kept listening and a columnist for The Guardian said “ Almost all the projects started with a big row, a big lie and a terrible mistake.”

I thought that experience sounds familiar.

As he continued talking about political mismanagement of UK projects, I found myself mentally auditing NSW infrastructure projects like the Parramatta to Chatswood Rail Line (that’s Parramatta to Chatswood not Epping to Chatswood), the Cross City Tunnel, the Liverpool to Parramatta Transit-way and the M5East to name a few.

I thought OK, it seems UK Labour do work hand in hand with NSW Labor.

But, what can we do about it? Well, I’ll briefly discuss several areas where we can change things for the better:

• Public Trust in Infrastructure Delivery incl. Labor’s Electricity Privatisation debacle;
• Maintenance;
• Expansion of Current Infrastructure;
• Nation-Building Projects;
• Moving Contingencies from Back-side Covering to Infrastructure & Services; and
• Fixing Dysfunctional Government.

But firstly, when I was elected to Parliament in 1994, the term “infrastructure” was not in wide public usage.

Now, fourteen years later, everyone has occasion to talk about infrastructure.

The public generally know the term covers all aspects of our built environment from roads, rail, schools and hospitals through to critical behind the scenes infrastructure such as water and electricity networks.

And the public also know high quality well planned and accessible infrastructure is one of the essential foundations of economic growth in our democracy.
 
But regrettably, infrastructure is a talking point in the wider New South Wales community, not because people are proud of certain infrastructure, nor because Australia has indeed been in the forefront of some aspects of financial engineering.

It's a talking point for the average punter because infrastructure failures impact their daily lives.
 
The New South Wales Government has frequently been associated with infrastructure failures - whether a failure to deliver infrastructure (such as secure water supplies or rail projects long promised and never delivered or other basic infrastructure in high growth residential regions) or a failure to maintain infrastructure (schools, hospitals, roads).

In the run up to last year’s election, I delivered a major policy speech describing how the Coalition would manage Infrastructure. I won't repeat that speech today but briefly it set out a roadmap to change the machinery of government.

The speech outlines a strategy of structural and administrative initiatives to kick-start infrastructure renewal in New South Wales.

The strategy included the need for a clear, transparent plan that would be driven from the top, ie with political will. The strategy must optimise the involvement of the private sector including in an Infrastructure Development Round Table.

Key reform objectives included reducing bid costs and improving project flow and certainty.

The Government must lift its own performance standards with clearer objectives to avoid project delays resulting from 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 the Government.

We need to foster innovation with real focus on outcomes and less prescription in bid design. We need to reform procurement and asset maintenance.

And we need to acknowledge that real reforms will only come with political will. Restructure and reform are meaningless without political will.

I have brought copies of that May 2006 speech with me today and it is also available on my website - peterdebnam.com.au.

Public Trust in Infrastructure Delivery

One of the key drivers of reform will be transparency and that will assist greatly in re-establishing public trust in infrastructure delivery.

Remember, governments don't like transparency because it leads to accountability and ministers and bureaucrats may then be under some pressure to justify poor performance versus generous salaries.
 
But if we are to get world-class infrastructure, priorities need to change and transparency and accountability must become primary objectives.

It must also become outcome oriented not process paralysed as it is today.

Instead of publishing a pre-election glossy brochure in the style of last year’s State Infrastructure Plan, let’s push the Government to supply properly sourced and detailed information about infrastructure deficiencies and projects on a website – just as I first proposed in the run-up to the 1999 state election.

NSW didn’t do it then or since, but the Queensland Government partly picked up the idea.
 
Embracing transparency and shifting the information out of the bureaucracy and into the public domain, via a website, will be the mother of all power shifts and will engage the public in an ongoing debate about priorities.

Just to put my comments in context, let’s remember Australians don't sit around waiting for Government to improve their lifestyle or infrastructure

To the extent they can, Australians work AROUND governments. Our citizens tend to structure their lives to minimise interaction with the public sector because they have learnt to avoid disappointment.

In western democracies, people take control of their own lives, look beyond governments and take measures to minimise their dependence on or interaction with governments whenever possible.

Private schools instead of public, private hospitals instead of public, security guards instead of police, cars instead of public transport for example.
 
People actively seek to insulate themselves from government failure.

But there are several public sector functions where everyone agrees government is required - the administration of the taxation system, the justice system, national defence, customs and trade are obvious.

For state governments, the provision of world-class emergency services is critical as is the provision of infrastructure. And three areas of state services and infrastructure are raw nerves with the community and failure in these functions produces a prompt backlash.

The three raw nerves are emergency services, passenger rail and roads.

Because of poor planning decisions, incompetent delivery of infrastructure, union control and lousy management of public transport services, most people in New South Wales are addicted to cars instead of public transport. When the Government screws up roads, the community gets angry.

These examples (emergency services, rail and roads) will usually be the concerns that focus media interest and community concern and be the reason governments make changes to their systems and strategies.  If we get changes to infrastructure planning, process and delivery it will probably be thanks to media exposure of crisis after crisis in those three areas of responsibility.

But to date there is little sign of Government improvement in delivery of services or infrastructure.

Labor’s Electricity Privatisation debacle

Over the last decade, there has also been a slow but steady breakdown of trust between most people in this state and their Government.

That breakdown of trust has now been further exacerbated by Labor’s Electricity Privatisation debacle, which is the latest example of patronising policies from an arrogant Government.

Importantly, before last year’s state election, Morris Iemma and I were both asked by the media, on a number of occasions, if we would sell electricity.

Several times, I confirmed we would not privatise and Morris Iemma also said Labor would NOT privatise electricity.

We didn’t want to and didn’t need to privatise Electricity.

We did need to continue attracting new investment and that was happening and is still happening.

And we needed to transform the industry to Clean Energy. But none of that required privatisation and we certainly don’t need a fire-sale now.

I must stress that Morris Iemma’s re-election platform specifically said he would NOT privatise Electricity.

But once the votes were safely in the ballot box, it was a different story.

Iemma had the “Privatisation” support of the newspaper editors and others because the media believed the NSW Labor Government couldn’t run a chook raffle and the Electricity Industry would be better off out of their hands.
 
So last year, Morris Iemma rightly believed he would be given a painless run to quietly privatise Electricity.

But, it soon became apparent Iemma had underestimated the time it would take to privatise Electricity and he also underestimated the community’s sense of betrayal.

He further underestimated the strength of conviction of individual MPs on both sides of Parliament.

And he underestimated the anti-privatisation campaign the community could build, despite the Privatisation protection offered to Iemma by major Sydney newspapers.

Now Morris Iemma is in the full glare of community outrage over not only his Electricity Privatisation betrayal but also his arrogant defiance of strongly expressed community views.

Iemma’s planned quiet sell-off of electricity has in effect turned into a suicide mission.

So before the next election, there will be a new Labor Premier in NSW – probably in the next twelve months.

But for a new Labor Premier to have any hope of operating effectively the critical relationship of trust with the community will have to be re-established.

As part of re-building that trust, Electricity Privatisation should be ditched, Government should be re-structured and the means of delivering infrastructure re-engineered.

We must involve the community in an open and honest discussion about future infrastructure projects, starting with a good look at the state infrastructure plan.

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

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

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 Electricity Industry are textbook cases of how NOT to handle infrastructure decisions.

In addition to re-establishing public trust, let’s talk about the basics of infrastructure in terms of maintenance, expansion and what is often called nation-building projects.

Maintenance

Maintenance is not media sexy and governments notoriously avoid investing sufficient resources in maintenance.

For example two years ago, the NSW Auditor-General highlighted the Government’s failure to provide adequate road maintenance funding.  He noted State Roads’ replacement value is $69 billion but the NSW Government “is rebuilding at less than half its long term target, and has not met this target at any time this decade.” And he said the Government’s own plans acknowledge “it is not doing enough rebuilding to ensure the long term viability of the network, thereby presenting a risk to safety and reliability, and of higher repair costs.”

In another maintenance embarrassment, hospital and school maintenance in this state is grossly under-funded. In any region across the state, you can walk into many hospitals and schools and see for yourself their sad rundown condition.

Maintenance may not be sexy but it is critical and better transparency must force more resources.

Expansion of Current Infrastructure

As our population and economy grow, existing infrastructure will need to be expanded and there is demand for road network expansion both in terms of capacity on certain routes and in terms of missing links ie the M4 East and upgrade of the Pacific Highway.

Rail links to the NW, SW, Illawarra, Central Coast and Hunter need investment. Schools and hospitals also demand additional resources.

What is missing is action. Changes to process and funding may finally deliver the action so long overdue.
 
Nation-building / Landmark projects

The third category I’d like to mention and I look forward to discussing goes beyond maintenance and expansion to nation-building or landmark projects.

Instead of tolerating mediocrity in this state, I believe each four-year term of State Parliament, we should as a community commit to at least one new landmark project – the type of nation-building project which so readily inspires Australians.

There are several obvious candidates screaming for recognition and approval.

Roads

In relation to roads, I’ve mentioned a number of network expansions such as the M4 East and upgrade of the Pacific and Princes Highways. But beyond those expansions, there is a road project, which will do more than anything else for the economic future of the western two thirds of the state. It will also result in significant improvement in road safety as well as increased amenity for everyone living or working in the Blue Mountains.

It is the construction of the Bells Line expressway over the mountains.

My former colleague Ian Armstrong has been a relentless champion for this project and despite Labor’s refusal to embrace the project, I believe its time has come.

Light Rail

In terms of public transport, it really is time we joined the rest of the world and embraced light rail in the CBD and regional areas of Sydney. The dollars involved are not large but because the project needs to break the logjam of prejudice against light rail in government ranks and in the bureaucracy, I put it in the category of a landmark project.

Water

There is no more critical infrastructure issue than drought-proofing our state. With that in mind, remember that every day, even on a dry day with no rain, one billion litres of water are poured into the Pacific Ocean through Sydney’s three major Ocean Outfalls. We must recycle that water.

On a dry continent, with a much debated water crisis, it defies commonsense that the state Government refuses point blank to put major recycling on the infrastructure agenda.

While on water, combined with recycling the ocean outfalls, we must incease the size of Warragamba Dam. Increasing the height of the Warragamba Dam wall can double the volume of the dam.

It still rains over the dam and at least once a decade rain events will fill the dam.

Let’s commit to doubling the size of the dam AND recycling the ocean outfalls. The combination of the two will secure Sydney’s water supplies for the rest of the century.

NSW Government needs a total Cleanout - Moving Contingencies from Back-side Covering to Infrastructure & Services

There is no doubt over the last decade of prosperity, Australian Governments have grown fat, self-indulgent and insulated from community concerns and the NSW Government is no exception and is probably the worst offender.

The prime objective for Government has become raising more and more taxes to fund an insatiable bureaucracy – a bureaucracy, which proves not only expensive but also paralyses decision-making.

Instead of building contingencies into services and infrastructure, the infrastructure is designed for minimal capacity, eg M5 East, and services especially police, nurses and teachers are squeezed.

But the bureaucracy knows no bounds because Ministers want their praetorian guard to be well armed or rather well fed.

While senior ministers are chauffeured from one glitzy party to the next, hordes of bureaucrats and spin-doctors compete to bed down the latest embarrassment or dream up tomorrow’s spin.

The fact is the NSW Government needs a total cleanout from top to bottom.

Not a spring clean – it needs to be turned upside down and shaken.

After years and years of gross excesses, the public administration of NSW needs rebuilding.

The entire Government needs to be re-engineered to serve the frontline instead of just protecting ministerial backsides.

The contingencies currently larding up the bureaucracy need to lipo-suctioned to provide funding for frontline services, tax cuts and infrastructure.

Get rid of the spin-doctors who now populate every level of the public service.

Get rid of the political hacks masquerading as departmental officers.

Second, freeze all bureaucrat recruitment. As someone retires or resigns, don’t recruit from outside the public sector unless the position is frontline or immediate support of the frontline.

A bureaucrat freeze with a net reduction of 5,000 per year will cumulatively save more than $4 Billion over a four-year term of Parliament.

That’s money, which should go to frontline services, to infrastructure and to tax cuts to make this state competitive again.

A reduction of the bureaucracy will also speed up decision-making.

As we found in the run-up to last year’s election, a bureaucrat freeze is not only good policy - it is good politics.

Third, remember Michael knight – the former minister for the Olympics.

Well, Labor’s new Premier could re-employ Michael Knight to restructure Government down to nine departments in the original Kennett model as I have suggested frequently over the years.

Michael Knight did a good job in delivering the biggest logistical challenge on the planet – the Olympics.

Labor could now use its own former minister to carve out a new NSW Government structure for the 21st Century.

This is not a new idea. I raised it eight years ago and it is a critical change.

Fixing a Dysfunctional Government

Eight years ago, on the 10th October 2000 I spoke in the Parliamentary debate lauding the “Best Olympics Ever”.

Sydney’s Olympics had finished a month before and Parliament resumed with congratulations to all involved.

In addition to the messages of congratulations, I said "It is important to acknowledge that in New South Wales in recent years we have suffered failure after failure in government services. We in New South Wales must ask, "How did we get it so right with the Olympics? How did we get it so right during September 2000? Was it the Government that did that? Did the New South Wales Government deliver that success?"

And I noted that “No, it did not. It goes back to the hybrid organisation.”

For five years the Carr administration had not delivered on government services. Then, in September 2000, everything magically worked.

For the period of the Olympics, all government services and organisations seemed to work at or above world-class standards. We had to ask ourselves: What happened?

In the case of trains and buses, public transport worked not only because we all wanted it to work well but also because we simplified the job. Public transport is ideal when the bulk of travellers go to and from fewer locations. For a fortnight, most of us went to and from Olympics events at relatively few locations, and non-Olympics travellers were tolerant of the Olympics' priority.

But back to reality. Especially in Sydney, goat-track roads and planning will continue to frustrate public transport until we commit to making those services world class.

For the 2000 Olympics everyone got behind the dream and was committed to delivering the best ever Olympics. SOCOG and the Australian community drew on the best resources in the nation, supplemented by the best in the world. Why did we do that?
 
Because we knew exactly what we wanted, and we desperately wanted to deliver a successful 2000 Olympics.

It is about time we looked at what services and infrastructure we want the State Government to provide and how it should do that.

Why can we not apply that Olympics thinking, that same determination, to delivering everyday government?

We can. It just means that the Government has to review the objectives, structure and resources of government. It can do it if it wants to deliver "services of world-class standard"—their words of thirteen years ago.

The current New South Wales Government structure is a lethargic leftover from mid last century and is in urgent need of overhaul.

It really is time to move the objectives and structure of governments into the twenty-first century. We did it for the Olympics. We can do it for the community.

Governments are usually impotent because they are not structured to serve the modern needs of individuals or communities. There are too many gaps and overlaps between departments, especially in the outdated New South Wales structure.

The Government can be restructured to reduce departments and bureaucracy and focus on improving services, instead of relying on crisis management.

It is interesting to note that the former Minister for the Olympics, Michael Knight, spoke about the challenge of the Olympics and said: “In order to do this properly, we had to alter the way a lot of things happen. We had to change the way government does business ... “

Importantly, he added: “These areas of change are not just for the Olympics, there's a broader change that's been unleashed.”

We wish!

During that same interview the Minister for the Olympics also said: “The way for government to go has to be smaller organisations—not building big entities but smaller organisations—that work smarter and outsource the appropriate things and get the skills piece by piece, rather than in-house, from the private sector.”

The Minister for the Olympics spoke also about his future, saying that he wanted to be involved in "something that's challenging, that's building, that's growing, not administering the status quo".

But Michael Knight then pursued a job outside politics ignoring the reality that the biggest business in town is government itself.

But whether it’s Michael Knight or some other brave soul, the NSW Government structure needs to be dragged into the 21st Century to have any hope of delivering world-class services and infrastructure.

We can argue till the cows come home about infrastructure priorities and about processes but until we fix the dysfunctional Government itself then no real progress will be made.

There is no greater challenge in New South Wales than reshaping government itself to focus on improving services and infrastructure for the community.

As practitioners in the field please add your voice to urgent calls for change in the way the NSW Government does business.

Thank you.