Paul Fletcher MP

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Speech to the second annual Developing Greater Western Sydney Conference

Portfolio Speeches Monday, 06 June 2016

I would like to start by congratulating the organisers of this very important conference about Western Sydney.

The future of this region is vital to the people of Western Sydney – but also to the effective functioning of the whole of the Sydney metropolitan region, and indeed to our entire nation.

There is a healthy and vigorous debate about how best to realise the enormous potential of Western Sydney – and the Turnbull Government very much encourages this debate.

With strong and articulate advocates like Member for Macquarie Louise Markus, Member for Macarthur Russell Matheson, Member for Lindsay Fiona Scott and Member for Hume Angus Taylor, there are many champions for this region.

And the Turnbull Government’s focus on cities policy means that we have a particular interest in Western Sydney. In my portfolio of Major Projects, I work closely with other Ministers including Assistant Minister for Cities Angus Taylor in the way that we develop our priorities for Western Sydney.

I want to start today by highlighting why Western Sydney is such an important region.

Next I want to talk about the Western Sydney Airport – this transformational project that will bring huge opportunities for the region.

Finally, I want to discuss the way forward on Western Sydney for the Turnbull Government, should we be re-elected on 2 July.

The importance of Western Sydney

Let me turn firstly then to the importance of Western Sydney – its current scale; its future growth; and its importance as the location of much of Sydney’s growth.

Even today Western Sydney is one of the most important metropolitan areas in Australia. Considered as a separate region, it is the third largest economy in Australia, producing 31 per cent of Sydney’s GDP and 8 per cent of Australia’s.

It is home to two million people – almost half of Sydney’s population and approaching ten per cent of our entire national population. The region has a young population – with more than one in ten Australian children growing up in Western Sydney.

It is also an area of great cultural diversity.

Western Sydney is expected to continue to grow strongly. By 2030, the population is estimated to reach 3 million.

Now this is important for Western Sydney – but it is also important for our entire metropolitan area. Much of the growth to occur in Sydney will occur in Western Sydney. The region hosts Sydney’s major growth corridors, in South Western and North Western Sydney.

This means it is extremely important to support these growth corridors with appropriate transport connections. It also underlines the importance of policies which seek to address a crucial imbalance – today, a greater share of Sydney’s people live in Western Sydney than work in Western Sydney.

Let me give you one recent example of a policy commitment by the Turnbull Government for transport connections designed to support new growth corridors.

We recently announced that we will invest $50 million in targeted works between Rosemeadow and Appin. The project will improve safety for the 12,000 motorists that travel on Appin Rd into Campbelltown each day.

But just as importantly, the upgrade of Appin Rd will help fast-track the development of thousands of new homes in this Western Sydney growth corridor.

The Greater Macarthur Land Release Strategy, to be released shortly, will provide opportunities for up to 35,000 new homes - at more affordable prices relative to other new release areas in Sydney.

Around 30 per cent of workers in Western Sydney have to travel outside of the area for work, often to Sydney’s CBD and central suburbs. This is particularly the case for workers in professional, scientific and technical service jobs, with one in two travelling outside the region each day.

This is a common phenomenon in Australia’s cities – most new jobs are created close to the CBD and most new and affordable housing stock is built more than 20km away.

There are two critical challenges therefore we need to address in our policy settings for Western Sydney. One is the transport linkages between the region and the rest of Sydney. The other is stimulating job growth within Western Sydney.

When it comes to transport linkages, we are partnering with the New South Wales Government to invest in the transport network serving Western Sydney.

A core investment here is WestConnex. This $16.8 billion project will significantly improve access to the rest of the Sydney metropolitan area for people who live in Western and South Western Sydney.

For example, it will reduce the trip from Parramatta to Sydney airport by forty minutes.

WestConnex will widen and extend both the M4 and M5 motorways and join them with a free flowing motorway, much of it running through tunnels so as to minimise the impact on inner city communities and local roads.

The Turnbull Government is supporting WestConnex with a $1.5 billion grant and a $2 billion concessional loan, which has allowed both stage one and stage two to commence.

WestConnex is rated by Infrastructure Australia as one of its four ‘high priority’ infrastructure projects nationally. The business case shows the benefits of WestConnex exceed the costs by 70 per cent.

Another critical project is the Sydney Metro – the new 66 kilometre metro style rail connection which will commence in north western Sydney near Rouse Hill, run to Chatswood, then down through North Sydney and a new western harbour crossing, through stations at Barrangaroo, Martin Place, Central and Waterloo before connecting to Bankstown. The Turnbull Government is providing $1.7 billion of funding towards this project under the Asset Recycling Initiative.

Western Sydney Airport

We also need to create more jobs closer to where people live - and in this context I want to turn to speak about Western Sydney Airport.

Developing a second Sydney airport in the west has long been recognised as a priority and Badgerys’s Creek was identified as a possible site as long ago as 1986.

Successive governments deferred a decision on this issue. It took a Coalition Government to take the decision, two years ago, to commit to proceed with an airport at the Badgerys Creek site.

This was a critical decision for the economic future of Western Sydney. After it commences operating in the mid twenty twenties, Western Sydney Airport has the potential to transform the economy of Western Sydney.

The term “aerotropolis” has been used to describe the development that can accompany an airport. There are plenty of international examples to consider, including Schipol in Amsterdam, Incheon in South Korea and Dallas-Fort Worth in the United States.

If we plan and execute it well, Western Sydney Airport can be a catalyst for commercial, industrial and residential development. It will bring knowledge-based industries and specialist jobs.

A full service international and domestic airport will make Western Sydney an international gateway for trade and will stimulate increased business travel and tourism to the region.

Western Sydney Airport is projected to create tens of thousands of jobs in the region. This includes an estimated 3,000 jobs during the construction phase and nearly 9,000 on-site jobs when the airport is operational, growing to 60,000 direct and indirect jobs in the longer term.

More importantly, an “aerotropolis” has the potential to generate tens of thousands more indirect jobs as it drives the Western Sydney economy over the next 50 years. Initially, in its very early years of operation, the airport is estimated to add $77 million to the local economy. This value-add will grow to around $1.5 billion by 2063.

But it is one thing to talk about these benefits – we need to take action to realise them.

The Turnbull Government has already made significant progress on Western Sydney Airport. We have commenced an extensive program of consultation, reaching out to thousands of community members and organisations at events held throughout Western Sydney and the Blue Mountains.

Consultations have been followed by a draft Airport Plan which sets out the stages of development for the airport, starting with the construction of a single runway in Stage 1 and with a long-term vision of a dual runway facility.

A draft Environmental Impact Statement has been prepared and released. It includes a comprehensive analysis of the environmental and social impacts of the airport and the steps we will take to manage these. The Statement has been informed by more than 700 field studies and 19 technical reports.

Released in 2015, the draft EIS generated thousands of responses from the community – as was its purpose. The Government is now working through these responses, prior to preparing and issuing the final environmental impact statement later this year.

To ensure the airport is well-serviced by road when it opens, we have partnered with the New South Wales Government to invest in the Western Sydney Infrastructure Plan. The Plan comprises $3.6 billion to upgrade roads around Western Sydney.

This work is well underway with major upgrades to the Northern Road and Werrington Arterial Road. The upgrade to Bringelly Road has already been completed and was opened to motorists in December last year.

While this progress is encouraging, there is still plenty to do.

In recent months, there has been a lot of commentary about the role that rail transport will play in the new airport. The Turnbull Government recognises the importance of a rail connection to the airport, but also for the region more broadly.

We are working with the New South Wales Government on a Joint Scoping Study on Rail Needs for Western Sydney. The study will identify the type of rail services that are needed across Western Sydney, when these investments should be made and how much they will cost.

I expect a discussion paper dealing with these questions to be released in the coming months. We will be keen to hear the views of everybody who has an interest in rail in Western Sydney – particularly local residents and businesses.

The Way Forward on Western Sydney

Let me turn now to the way forward for the Turnbull Government when it comes to realising the potential of Western Sydney. I want to highlight three themes: taking a Western Sydney perspective; leveraging our key policy commitments; and working with the Baird Government in New South Wales.

Taking a Western Sydney Perspective

When I speak about taking a Western Sydney perspective, I am referring to the importance of policy settings which genuinely advance the interest of the people of Western Sydney. It is not uncommon to see other perspectives given priority.

Let me mention for example some of the views we have seen expressed recently about WestConnex. The Greens have stated that they want this project to be cancelled – showing little interest in meeting the transport needs of the people of western and south western Sydney.

In recent days we have seen a similar position being articulated by Labor infrastructure spokesman Anthony Albanese – evidently motivated by a desire to win Greens votes in the inner city.

Mr Albanese told a meeting in his inner city electorate of Grayndler on 19 May that Labor was withdrawing support for WestConnex:

ALBANESE: The fact is if I am the transport minister there will be not one dollar from the federal Labor government for this WestConnex project.

This is a very surprising reversal in position. When he was Infrastructure Minister in the last Labor Government, Mr Albanese supported WestConnex and allocated $1.8 billion of funding in the 2013 budget towards the project.

In a 2013 media release, Mr Albanese highlighted the benefits of WestConnex in, “helping western and south-western Sydney residents to cut back on travel times and improve the quality of life they can enjoy with their families.”

If you take a Western Sydney perspective, you support WestConnex. It seems though that neither the Greens nor Labor can be relied upon to take a Western Sydney perspective.

Another example of a Western Sydney perspective concerns the question of a rail line to Western Sydney Airport. As I mentioned earlier, the Commonwealth and NSW Governments are working together on a rail scoping study, and in coming months we will release a discussion paper.

This paper will set out a range of possible route corridors, and call for feedback. What I have noticed in the public discussion concerning the right route for a rail connection is that some people seem to take for granted that it needs to be a route running east-west, from the airport towards the city.

But many community leaders in Western Sydney argue for a different approach: a north south rail link which would connect up the metropolitan hubs of Western Sydney, from Campbelltown in the south west, through Penrith in the centre and up to Rouse Hill in the north west.

We need to go through a careful and methodical process of determining the right approach here. But in doing that it is important not to simply make default assumptions about the right route – and in turn that makes it important to bring to bear a Western Sydney perspective.

Leveraging our Key Policy Commitments

This brings me to the importance for Western Sydney policy of leveraging the key policy commitments of the Turnbull Government. The first of these, as I have indicated, is Western Sydney Airport.

The job of planning and building a new airport is a large and complex one. We need to guard against the risk of getting so caught up in that job that we fail to direct sufficient attention to the bigger picture – which is the economic importance of the airport to Western Sydney.

There is much work to do in coordinating the airport planning with broader transport and land use planning in the surrounding region. What do we need to do to maximise the benefits of the airport for tourism in western Sydney and the Blue Mountains? How do we best attract the kind of businesses that derive value from being close to an airport – an export portal allowing them to send their products to Asia within twenty four hours?

As well as the Turnbull Government’s policy commitment to Western Sydney Airport, we have made a broader commitment to the federal government taking a strong policy role in relation to cities. Given the importance of Western Sydney to the wider Sydney region and the nation, how should we seek to leverage our cities agenda to support and stimulate the growth of Western Sydney?

A key aspect of our cities agenda is about delivering jobs closer to home, creating opportunities for more affordable housing, building better transport connections and a healthier environment.

We have stated that to achieve these goals, we will explore “city deals” to bring together different levels of government and other stakeholders. We need to coordinate our actions and ensure we are using all the policy levers at our disposal, such as investment in infrastructure and urban planning.

The Turnbull Government has been working closely with the NSW Government through our road and rail investments. We expect to establish more coordinated arrangements with all levels of government as delivery arrangements take further shape.

As Minister for Major Projects, much of my work deals with infrastructure and its influence on the effective functioning of our cities. I have already noted the importance of Western Sydney Airport in terms of creating jobs closer to home for people in Western Sydney. The supporting investment in road and rail infrastructure will improve transport connections in the region and mean people will spend less time getting from home to where they need to go.

Our investment in transport infrastructure will also be a catalyst for more housing supply and urban development – for example, around train stations along the rail link.

As part of our cities agenda, the Turnbull Government has stated our clear interest is using the principle of value capture to contribute towards the capital cost of new transport infrastructure. The core idea is that a new rail line, for example, can deliver a significant increase in land value, and it makes sense to draw on some of that value increase to contribute towards the capital cost of the line.

There is a long tradition of using value capture to fund heavy and light rail investment in many parts of the world – and an extensive literature.

The Bureau of Transport and Regional Economics looked at the issues in a 2015 paper, Transport Infrastructure and Land Value Uplift.

The Australasian Railway Association argued in a recent paper, Innovative Funding and Financing for Public Transport that governments in Australia will need to establish alternative funding sources for public transport whilst ensuring that the private sector plays its part.

One commonly cited example is Hong Kong, where MTR corporation is both a property developer and operator of the rail network.

I acknowledge that the New South Wales Government has been doing a lot of work on value sharing, to use its preferred term.

As we think about Western Sydney Airport and the challenge of funding a rail connection, it seems to me there are several reasons why value capture offers potential to assist in funding the provision of a rail connection sooner than might otherwise occur.

The first is that the land is largely greenfields – that is, it does not presently have residential or commercial development on it.

Secondly, there will be a clear path forward to the area becoming much more developed, with economic activity catalysed by the airport and by new ground transport connections. Property owners could therefore see a direct link between a contribution they made towards the cost of a rail link – and the likely increase in value of their property.

A third factor which reinforces this is the wide range of possibilities for the route of a rail connection. Hence a property owner will be able to weigh up a scenario where a station is built near to his or her property – and one where it is not.

I would certainly encourage property owners who have ideas in this space to come forward with those ideas to both the Commonwealth and NSW Governments.

Working with the Baird Government

This brings me to one last point I want to highlight about our agenda for Western Sydney – and that is the close co-operation between the Turnbull Government federally and the Baird Government in NSW. I have already mentioned a range of projects which are funded by both governments, including WestConnex, Sydney Metro and the $3.6 billion Western Sydney Infrastructure Plan.

But in addition to the project by project cooperation, there is a strong shared commitment to Western Sydney. Commonwealth and NSW Ministers and officials work together closely on these issues – with, for example, the scoping study into the rail needs of Western Sydney and Western Sydney Airport being a joint project.

At the same time some aspects of policy which bear on Western Sydney fall strictly in the hands of one government or another. The airport is a responsibility of the federal government. Planning – and the exciting new directions being pursued under the umbrella of the Greater Sydney Commission - fall to the state government.

There is also interest from local councils in Western Sydney to be a part of a coordinated approach to planning and delivering opportunities for growth in the region.

When the different levels of government have a shared vision for Western Sydney, the scope to work together closely, and to deliver the best outcome for Western Sydney and in turn the entire metropolitan area and the nation, is very great.

That is certainly a priority that I hope we can take forward should we be returned to government federally on 2 July.

Conclusion

Let me conclude as I began with the observation that the potential of Western Sydney is immense.

The Turnbull Government has a vigorous agenda for Western Sydney – and a lot that we will be getting on with should we again form government.

I know that our enthusiasm for Western Sydney is shared by everyone here – and we all want to work together to turn that enthusiasm into very tangible outcomes, so that Western Sydney can enjoy the bright future which it deserves.

References

1. Western Sydney Regional Organisation of Councils (https://wsroc.com.au/issues-campaigns/economy-and-employment)
2. Western Sydney Regional Organisation of Councils (http://profile.id.com.au/wsroc/population?WebID=200)
3. 2014 NSW Population Projections (http://www.planning.nsw.gov.au/Research-and-Demography/Demography/Population-Projections)
4. Work, Places and People in Western Sydney – University of Western Sydney 2015 (http://www.uws.edu.au/__data/assets/pdf_file/0008/880235/CWS_WorkPlacesandPeopleinWS_platformpaper.pdf)
5. Grattan Institute: City geography and economic policy, John Daley 14 September 2015 (http://grattan.edu.au/wp-content/uploads/2015/10/Capital-City-Lord-Mayors-for-web-pptx1.pdf)
6. WestConnex Updated Strategic Business Case p316 (http://www.westconnex.com.au/documents/updated_strategic_business_case.pdf)
7. Infrastructure Priority List – Infrastructure Australia, May 2016 (http://infrastructureaustralia.gov.au/projects/files/Infrastructure_Priority_List_Table-May_2016.pdf)
8. Sydney’s second airport site – Badgery’s Creek or Wilton, State Library of NSW 1986 (http://trove.nla.gov.au/version/21495031)
9. Global Airport Cities – John Kasarda (ed) 2010 (http://www.aerotropolis.com/files/GlobalAirportCities.pdf)
10. Western Sydney Airport – Environmental Impact Statement – Volume 3 (http://westernsydneyairport.gov.au/resources/deis/files/2015/43-volume-3-chapter-37.pdf)
11. Ibid
12. Media release – Greens call for halt to all Westconnex work and funding pending federal audit – 19 May 2016
13. Promised WestConnex federal funding at risk after Albanese pledge - Daily Telegraph, 30 May 2016
14. Media release – Building Australia’s future – 14 May 2013
15. https://bitre.gov.au/publications/2015/is_069.aspx
16. http://ara.net.au/content/innovative-funding-and-financing-public-transport-report

Authorised by Paul Fletcher MP, Level 2, 280 Pacific Highway Lindfield NSW 2070.

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