Social Democracy in Focus, Issue 2

December 19, 2014


Real-world interpretation of the new government’s policies:
What they mean for quality of life, prosperity and fairness in Victoria.

Road to nowhere?

On Monday, Victorian Premier Daniel Andrews fulfilled his election commitment to publish the business case documents for the previous government’s $6.8 billion contract to build stage one of the East-West link road.

Rebuilding Victoria’s TAFEs

On 17 December, the Andrews Government made good on the first part of its commitment to rebuild public funding for TAFEs through a $320m TAFE Rescue Fund. An advance of $20m will be included in the forthcoming Budget Update.

The TAFE policy agenda is a response to the dire state into which TAFEs had fallen under the Coalition Government. While public spending on vocational education and training (VET) was ballooning out of control, the majority of this new spending flowed to private VET colleges. TAFE enrolments fell and campuses closed, while employer groups complained of declining confidence in VET qualifications.

These changes dated back to the Brumby government, which had ‘uncapped’ vocational courses in Victoria so that, with few restrictions, students were allowed to use government subsidies in whatever courses and institutions they chose.

The response of the Coalition to the ensuing cost blow-out was to cut the special purpose “community obligations” funding to TAFEs which allowed them to provide training for disadvantaged, disabled and regional students.

In our 2013 report Training Days, Per Capita highlighted the folly of stripping the TAFE system at a time when Victoria is facing widespread job losses and high youth unemployment.

We made numerous recommendations last year, including cracking down on rorted programs to free up funding to resuscitate TAFEs. We were pleased then that the Napthine government moved to stop the rorts, but wished they had gone further in restoring much-needed funding to TAFEs. We’re delighted that the Andrews government has now done that.
More than 9000 pages of documents are now available for public perusal online, covering the proposed benefits, costs, budget impacts, options for toll charges and technical specifications.

The media reactions went quickly to the fact that the Napthine government was considering increased charges to cover the cost of building the 4.4 kilometre stretch of tunnel from Clifton Hill to Parkville.

Media coverage went quickly to the huge costs and dubious economic benefits of the road project, with the Herald Sun reporting that the original versions of the business cases had found that stage one of the East West Link would produce an economic return of less than $1 for every dollar spent. Only when widening of existing freeways and upgrades to public transport infrastructure were included in the calculations did the calculated return increase.

Equally intriguing was that revelation that tolls would have had to increase on existing roads in order to meet the costs – and that on its own strengths it would have taken the East-West Link 56 years to pay for itself, many more times than either the Citylink or Eastlink toll roads.

The public release of these documents is smart politics by the Andrews government, and paves the way for better policy. By emphasising the principle of transparency and inviting a critical evaluation of the economics behind the project, the Victorian government is reinforcing its emphasis on integrity and encouraging a long-term, public interest view of complex infrastructure projects.

The same emphasis is visible in the new state government’s decisions to move both integrity and infrastructure planning into the Premier’s department, as part of its initial machinery of government changes. These decisions will give the centre of state government a lot to digest, but they offer a chance to establish a new, more strategic approach to the governance of large, complex public projects.

Over the last year, the Coalition governments in Victoria and Canberra had done everything they could to reduce the East-West link to a simple ‘yes or no, all or nothing’ proposition, with Tony Abbott declaring the state election “a referendum” on the road. Oops.

In the new year, the new governments’ own plans will become the focus of much greater scrutiny and discussion. Treasurer Tim Pallas has already signalled that their alternative priority – the Melbourne Metro rail tunnel – may not be delivered in this term of government, and declined to rule out ever building ‘stage 2’ of the East West link, a river crossing that would improve freight links and take pressure off the groaning Westgate Bridge.

These choices will lead back into the more treacherous waters of complexity, nuance and political ambiguity in infrastructure and strategic urban planning. The Andrews Government must put in place an approach to urban and transport planning which addresses Melbourne’s growing population pressures and integrates public, private and commercial interests sustainably by planning for the whole community.

The 2013 election could come to be seen as a turning point, in which a decision not to build a major road was both an electoral asset and the right policy call for a centrist, modernising government.

But for that to be the long-term outcome, the new Victorian government will have to turn smart politics into a courageous and workable approach to governing.

The Parties in the House

We all know about those parties where a few clusters of unfamiliar people turn up uninvited. Sometimes those people are a liability. Sometimes they make the party.

The Andrews Government is a bit like a group of young university students holding a house party. It’s the job of the Government to ensure that the minor parties in the Assembly and the Council have a good time, but more importantly they need to ensure those uninvited guests generally fit in and don’t cause too much disruption to the planned business of the night.

While the Coalition previously held the majority of seats in Victoria’s upper house, minor parties now hold the balance of power. The ALP has 14 seats, the Liberals 14; the Nationals 2 and the Greens 5. The remaining 5 seats have gone to the so-called “micro parties”: the Shooters Party, the DLP, the Sex Party and Vote 1 Local Jobs.

Governing amid parliamentary instability appears to be the one constant in Australian politics today. So while the particular challenges of dealing with the DLP and the Sex Party might be unique to Victoria, the predicament of the Andrews Government is not.

It is therefore incumbent upon this new government to learn from governing instability elsewhere and to steer a course through the challenges of the Parliament as well as Victoria’s challenges.

Witness what happens when governments can’t bring themselves to face up to their parliamentary reality soon enough. The Abbott government waited until after the budget to seriously court the minor parties and independents, and we all know how that ended: it hasn’t ended. Billions of dollars worth of budget measures are still in legislative limbo, seven months after the Federal Budget was handed down.

The Andrews Government needs to engage with their new friends, and they need to do so before the party really gets started. As the Avalanches song goes, “Get a drink, have a good time now / Welcome to paradise, paradise, paradise.”