ROSS PEAKE August 21, 2012
A federal minister is suggesting Australia's massive investment in superannuation could be broken open to fund a high-speed rail network on the eastern seaboard.
The Canberra Business Council immediately welcomed the idea, predicting the project would be a ''game changer'' for Canberra.
The suggestion from Regional Australia Minister Simon Crean comes as a task force is finalising its report which might finally give the go-ahead for the long-awaited project.
''I can see it happening, but it's not going to happen if you think the government alone will fund it,'' Mr Crean told a Canberra Times business lunch yesterday.
''If you think one government alone is going to fund it or even collectively, the three levels of government, you're kidding yourself, unless you're prepared for a massive tax hike.
''I have no doubt that if you develop a high-speed rail and you're strategic about it, there's going to be an economic return.''
Mr Crean said Australia had the ''happy conjunction'' of a stable economy and compulsory superannuation, with total investment now worth $1.3 trillion.
The government is lifting compulsory payments from employers from 9 to 12 per cent.
''The $1.3 trillion, just to give it a perspective, is bigger than our GDP … and the 1.3 [trillion dollars] will increase by 30 per cent,'' Mr Crean said.
''In my view, financing something is not the problem in this country, because we've got the savings and we've shown over continuous economic growth for almost two decades, we can control inflationary pressures.
''The question is how do you develop the instrument that reflects the return and recognises that the return is going to happen over a long period of time.
''Unless you're prepared to put taxes up, no one government and no three levels of government, can do it, it's got to involve the private sector.
''You have got to come to grips with how you ensure the economic return and how you secure it.
''Get those elements together and I can see it happening, and it would be a good thing for this country if it did.''
The first stage of a federal study into an eastern seaboard network connecting Brisbane to Melbourne via Canberra, Sydney and a range of regional centres put the construction cost at between $61 billion and $108 billion.
It projected that half of the passengers who would have flown between Sydney and Melbourne, the world's fifth busiest air corridor, would have chosen the high speed train because of competitive ticket prices.
The second stage of the study into the economic merits and financial viability of the network is due to be released in December.
''This kind of monumental endeavour must take place in a deliberate, thoughtful manner,'' the task force says.
A former bid, the Very Fast Train project, was rejected by the Howard government for not projecting immediate returns.
One industry source said last night members of superannuation funds might not be happy to have their money invested in a nation-building project that might have zero return for a decade.
Chris Faulks, Canberra Business Council CEO, said the business community supported Mr Crean's suggestion.
''There needs to be some innovative options put forward for funding high-speed rail,'' she said.
''It is unrealistic to expect the federal government, by itself, or even in combination with some of the state governments, to fully fund a high-speed rail network between Melbourne and Brisbane via Canberra, Sydney and Newcastle.
''We're waiting anxiously for the report to come out at the end of the year and we're hopeful that it will canvass some of these funding options.''