Linking up?

There are some topics that, one would have thought, NSW Labor would be wise to avoid.

Abscence makes the heart grow fonder, and there can be no doubt that the voters will soon become more cynical about the Coalition, and less more favourably disposed towards O'Farrell.

How long it takes for the public to attain the required level of cynicism will depend on the topic.  Wages and conditions for public servants will alwys be a hot topic - after all, the Coalition is a government drawn from the right, and they are practically expected to hurt the public service.  And so they have.

On other issues, however, the left should be slower to throw stones. And there is no issue that Labor should be quicker to retreat from than Infrastructure spending.

The Labor government achieved very little in the way of infratstructure during its time in government.  True, a number of large road projects were built - but they were funded by private companies, resulting in heavy tolls - and not tolls carefully calibrated to encourage commuters onto puiblic transport, but rather heavy tolls calibrated to deliver the maximum return to the private companies.

When it comes to public transport, the Labor can point only to the Airport Link and the Chatswood-Epping Rail-link.

The Airport link is not nearly as impressive as one might suppose.  It was sorely needed (indeed, the only surprise is that it wasn't built before) - but it was funded by the private the sector, meaning that the cost to use it is so high that, even from outer parts of Sydney, it is often cheaper to use a cab.

The Chatswood-Epping Rail Link is great - until you consider that it was meant to be the Parramatta-Chatswood Rail-Link, until budget blow-outs and general incompetence meant that it was shortened and still, incredibly, managed to come in well over budget.

Parramatta-Epping is the dotted link - the solid line had already been built

So Labor has no right to throw any stones.

And yet:

During the last election, a commitment from Labor magically appeared - NSW would spend $500 million and the Federal Government would contribute $2 billion to link Epping to Parramatta.

This was an obscenely cynical promise. By the point that the promise was made, Labor knew that they had no chance of winning. They also knew that O'Farrell has committed to the North-West Rail-Link - an extremely expensive but equally necessary project. Pennies would need to be pinched.

Moreover, the Parramatta Epping Link was now Labor's idea - and if O'Farrell decided to fund it then it would be "Labor's idea" - and all credit for the plan would evapourate.

What Labor's promise really meant was that the Parramatta link would never be built - or, at the very least, it would slip well down the priority list. Like I said, cynical.

This is what press releases like this from Labor are meant to achieve. It is meant to damage O'Farrell for not doing something that Labor would relentlessly hammer him for doing.

Does it work? Probably. But far less than it would if Labor actually had a good record of building the infrastrusture that the press release talks about.

The problem is that of course Labor has no such record - and the public remembers that Labor squibbed on building that link in the first place.  It seems pretty unlikely that an attack on the Coalition for not building is going to do anything other than remind the public about Labor's (many) failings.

Penny Sharpe (who I generally like and respect) might be better advised to find a credible basis to attack O'Farrell. Because this infrastructure line sure ain't much chop.

A Promise from the Heart I

It's now almost a year since NSW went to the polls and unceremoniously dumped out the Labor government.


Much of the talk since then has been about the things that the Coalition changed that they never mentioned - the pay and conditions for the public service being the most obvious example.


Given that O'Farrell made as few promises as possible before the election (hence the whole blank cheque argument) there are perhaps less promises that the O'Farrell government can be held to.


You might also remember this document that purported to the 100 promises that O'Farrell had broken - I wrote about what a joke that document was here.

What I thought might be fairer would be to have a look at some of the bigger promises that O'Farrell did make and assess how he has gone in relation to those.


I'm going to start today with Transport and get to other issues as and when my schedule allows.


Transport


I've written at length about O'Farrell's ambition to the "Infrastructure Premier".  It's a noble aim - there can be no doubt that there is a major infrastructure backlog in this state, and we need O'Farrell to do something about it.


Having said that, infrastructure costs money.  Labor's solution was Public-Private Partnerships, which just generally were a bit of a disaster.


The big ticket item was always the North West Rail Link. What did he promise?

From this story

Progress?

From this ABC story

Can't argue this that, although I suppose the "promise" hasn't really fallen due yet. O'Farrell knows that if he was to break this promise then all hell would break loose, and he would be tarred with the same brush the Labor government was.

What else?

From this Crikey story

The Roads and Transport Authority and NSW Maritime have been combined in the Roads and Maritime Authority - whether it actually achieves anything remains to be seen.

The T card dispute has been settled, and in September it was announced that the integrated card would be called "Opal".

Part of the Press Release

Of course, choosing a name is a nothing step - commuters are going to want to see progress. This piece (written in February of this year) suggests that the Coalition has indicated a late 2012 roll-out - if so, this will be an outstanding development, given that the T-Card was first announced in 1996 and was perhaps one of the best and most infamous examples of Labor's incompetence.

The Coalition promised to create Infrastructure NSW - this has happened, and Nick Greiner has been (controversially) appointed Chairman.  

It remains to be seen how much concrete benefit the organisation can deliver.  Their website promises a 20-Year State Infrastructure Strategy in September of this year, which will no doubt prove interesting. 

The Hunter Infrastructure Board was given a surprising level of prominence in O'Farrell's "Contract".

Done.

Whilst I will always push for more public transport, we do need to have a functional road system.  Of course, a very large percentage of voters couldn't care less about trains and busses - they just want to see better roads.

This from the RTA website:

So?  On the whole, big tick for O'Farrell on Infrastructure promises. That said, to date most of the decisions have been cheap, easy ones - the real test will be the commitment to retain the funding when budgets get tight.

More later.

Accessing the Anger?

Some people will say we shouldn't be surprised. They are a Liberal government, after all.

Could O'Farrell really be planning to fund the North West Rail Link through an "access fee"?

Earlier today the Hills Transport Group put out a press release that quoted RailCorp CEO Rob Mason as saying in a memo that "a private sector entity will design, construct, commission, operate and maintain the North West Rail link... for a period of 20 to 30 years." The press release goes on to explain that this will operate under an "access model".

In plain English, that means that there will be a special station surcharge for travel on the line, similar to the hated Airport Link surcharge.

As a caveat, I should say that there has been no formal announcement or acknowledgment from the government.  O'Farrell may deny any such plans, and it will be anyone's guess whether he has had a quick change of heart or whether Mason was speaking out of turn.

But the plan really does seem crazy.  Ridiculous, unbelievable, hubris-fueled crazy.

The North West is Sydney's biggest growth area.  These people need access to public transport, as the constantly worsening traffic chaos on the major feeder roads attests.

This is why the North West Rail Link is essential if Sydney is to manage its growth.  A government cannot simply keep releasing more and more land to developers and not build heavy rail to get these people around. It should have been built by now, but we can't blame the Coalition for that.

Map of the proposed route.  Taken from the line's website

To be fair, it is true that a privatised line would be cheaper for the government (and, therefore, the people). The government should spend our money carefully, and if there is a cheaper and equally effective way to move people around then it should be investigated.

Equally, I'm a believer in user pays, to a point.  Tolls on roads are appropriate if the tolls are used to fund said roads.  There is no particular reason to encourage people to drive, and anyone who lives in the North West and drives to the city for work knows what they are signing on for.

Rail, however, should be encouraged (and yes, subsidised) by government.  Rail is cheaper, it is better for the environment, it takes up less space, it is clean and it is far more expandable. We cannot just keep jamming more roads and tunnels into our city - we need a good network that grows as the city grows.

While a private model would cost less money up front, under an access model the people who use the line would simply make up the difference.  In other words, the private model would shift the cost away from the rest of the state and towards those people who will actually use the line.

On the surface, that makes sense.  They're getting the benefit, right?  No.

Those people who get the train stay off the roads.  Their polluting cars stay in the garage.  The fuel they would buy stays in the bowser. More bridges, tunnels and parking lots stay on the drawing board. The CBD is that little bit nicer, less crowded, and easier to get in and out of.

Moreover, people suddenly have good reason to live in the North West, knowing that they will have a way to get to work.  The rest of Sydney will have a little less pressure to grow and shoe-horn in even more people.

The rest of Sydney has access to heavily subsidised public transport.  Why do those in the North West deserve any less?

This revelation is particularly surprising in light of the Infrastructure funding models that I wrote about less than a week ago.  In that interview O'Farrell explained quite clearly the value of doing things the "hard way". He was right.  The North West Rail Link needs to be built, and he needs to find some other way of paying for it.

Public transport (and particularly heavy rail) is the skeleton on which a city is built. And, like an animal without a good skeleton, a city without a good skeleton is liable to collapse.

Putting a massive surcharge onto the line to fund it will simply mean far, far less people will use the line.  They will keep driving and paying those tolls because, suddenly, the train trip isn't as economical as it was.  

The North West Rail Link has the potential to be O'Farrell's greatest achievement in government.  It was one of the key promises that got him elected.

If he blows it by making it horrendously expensive to use, I have no doubt he'll not be allowed to forget it.

UPDATE.  The Herald and the Telegraph both have stories about this today.

Additionally, O'Farrell responded on twitter late last night:

An Expensive Ambition

I understand the need to illustrate news stories with photos.  We are visual people, and almost everyone prefers their writing to have some pretty pictures.

There is quite an art to these pictures - the photo needs to go with the story so there is some synergy.  It would jar to have a picture of a happy politician next to a story about how his or her stocks have fallen recently.

Having said all that, the below picture is a fairly ridiculous accompaniment to the story on O'Farrell's repudiation of "commentators" assessment of the value of the "poles and wires":

Photo from the Tele

If this photo was posed, then someone in O'Farrell's office deserves a smack about the head.  He looks ridiculous.

Moving on, the Telegraph has this week continued its campaign for the sale, as is evident from this paragraph:

As it happens, he is right about their being no "magic pudding".  Why he has chosen to describe it as a "magic pudding" rather than a "magic bullet" like any sensible English speaker would is beyond me, but we'll put that aside for the moment.

O'Farrell went on to nominate 4 ways in which the government can raise the money to get stuck into the "infrastructure backlog" left by Labor.

Each of these suggestions merits some further attention.

Realising assets is, politically, an extremely sensitive issue.  I've previously discussed the practical effect, and the unavoidable consequence of union outrage.

Of course the obvious problem is that once assets are sold, they are gone.  If the asset is producing an income, then it is fair to ask whether the state is actually getting value for money.  This is naturally a question that can only be answered by looking at the specific facts and figures for that particular sale.

Federal funding is a vexed issue.  On one hand, O'Farrell's federal counterparts have campaigned heavily against Federal Labor's perceived overspending, so NSW can't complain too much if the belt is pulled a little tighter.  GST flows regardless, but the breakup of the funds is always a difficult issue.

The last time NSW applied for Federal funding the entire matter was botched by Labor's average efforts, so hopefully the Coalition Government will put up a better show.  But it remains a source of funding that cannot be relied on.

Of course, sometimes the Federal government steps in for flagrantly political reasons, such as when NSW Labor promised to build the North-West Rail Link in the lead-up this year's election

Photo from SMH

Growing the state's economy is by far the best option, but also the most difficult.  There are a thousand variables that affect how likely any such effort is to succeed, and those efforts can be derailed by factors far outside the government's control. Additionally, economic growth and the additional tax income it brings also bring with it cost - new residents need public amenities and expenditure on teachers, nurses and the like.

On the other hand, the cash inflow is semi-permanent, it is recurring, and it can be very substantial.

Finally, borrowing within AAA.  The issue of our credit rating has been a recurring issue of late, and the Labor government was roundly criticised not so long ago for its slavish adherence to AAA.

It does make sense to maintain a good credit rating.  The cost saving is significant and it attracts investment.

Like anything else though, someone needs to look at the cost/benefit.  I don't believe that we need to protect the AAA at all costs, and it is entirely conceivable that it may be worth sacrificing AAA to build a particular piece of infrastructure.

At the end of the day, as I have said many times before, O'Farrell said that he wants to be the Infrastructure Premier.  That is a noble goal, and a goal worth pursuing.  But the corollary is that being the Infrastructure Premier is going to take money.  Many, many billions.

It is a very, very difficult promise to keep.

O'Farrell also promised to deliver open government, and multiple departments' now infamous failings in this area have received a great deal of coverage.

That was a promise that cost very little, and merely required a little political will - and yet that has slipped away.

NSW will not allow such laziness when it comes to infrastructure.  It is right and proper that a sensible, measured approach is taken to the projects - we certainly want to avoid another Sydney Metro debacle.

But if a significant number of the promised projects are not moving by the next election (I'm thinking here partcularly of the North West Rail link) then there will be hell to pay at the ballot box.

A Gift From Above

Tonight's Federal Budget promises to be a good one for New South Wales.

It seems utterly ridiculous that there are two different levels of government responsible for the funding of major projects this state, but that's another matter.

According to a report in the Herald the following projects are going to be funded by the Federal government:

• $900 million on four highway bypasses and duplications
• $840 million on upgrading the freight rail network from the North Shore to Newcastle and
• Studies on "the Scone railway level crossing and the Richmond Bridge"

The $2.2 million should be contrasted with the $600 million that Victoria received.

The funding is trumpeted by the Herald as a triumph for O'Farrell, although precisely what he did to secure the funding is not clear.

There can be little doubt that he would have loved to see an allocation for the North West Rail link, an enormous funding headache he will need to address down the road.

One would have thought that the Premier of New South wales would have some say in how the Federal Infrastructure funding is distributed, but that would require a level of cooperation we seldom see between different levels of government, especially when the main players are from different parties

The allocation of Federal funding for such vital infrastructure projects should be above politics, but one only need think back to the joint announcement Kristina Keneally and Julia Gillard made during the election regarding the completion of the Epping Parramatta Rail link.

The difficulty that Federal Transport Minister Anthony Albanese has is that, on one hand, he wants to please NSW voters (especially those in the coveted Western SYdney seats) whilst doing as little as possible to help the NSW Coalition government.

It has been no secret that Tony Abbott was disappointed in the number of seats that the Coalition picked up in the 2010 Federal election, going so far as to insist that Arthur Sinodinos take over as the President of the NSW Liberal Party.

By implication, if Abbott was disappointed in the number of seats he picked up last time round, these will be first seats he eyes off next time we go to the polls.

Federal Labor of course realises this.  By the same token however, they don't want to deliver O'Farrell any more victories than the have to - every completed project in NSW (no matter who funds it) will help portray the Coalition as the party who actually gets stuff done in NSW.

I understand that here are a fair whack of people in NSW who refused to vote for the Coalition because the debacle that was the Greiner government.  Before my time, but I hear that things got pretty dire for a while back there.

If O'Farrell can really nail this goal of his to be the man who fixed NSW's transportation system, he will win a new generation of voters who vote Coalition at the state level.  In a state where the Coalition have seldom been in power, and have in the past not covered themselves in glory when they have been, this could be a major game changer.

The result of this is a Federal Labor who has to try to work out a way to fund NSW infrastructure without giving O'Farrell more than they have to.

So, you can rest assured that the North West Rail Link will almost certainly never get Federal funding whilst Labor holds the purse strings - there is no project that the Coalition government is more firmly wedded to.  O'Farrell is going to have to find that money elsewhere.

Of course, every other project that is funded Federally frees up more of NSW's budget to spend on said North West Rail Link, but not much can be done about that.

There's no knowing how much longer Labor will stay in power Federally (it's difficult to see them lasting longer than O'Farrell - that's for sure) - but you can be sure that for the rest of their reign we will see continued frosty relations, predictable sniping and little in the way of productive cooperation.

And, if we're lucky, a little bit of infrastucture building.