STEPHEN ANTHONY: Albanese should be backing Victoria’s real needs, the Suburban Rail Loop isn’t one of them

Anthony Albanese has committed to backing Melbourne’s Suburban Rail Loop — a $300–400 billion hole Premier Jacinta Allan wants to dig under the city.

This action requires the rest of Australia to bail out the broke Victorian Government and its major infrastructure plans. It also runs the risk that the Victorianisation (corruption) of public policy will head to Canberra, if it is not there already.

Does the project stack up?

The Suburban Rail Loop looks to many independent experts to be the biggest pot of warm excrement that an Australian government has tried to serve its citizens.

Let me give you the simple arithmetic.

Victoria’s independent Parliamentary Budget Office says every dollar spent on the first stage will give Victoria about 50 cents of benefit. That’s not an investment — that’s charity with a train set attached.

The Federal Government’s own independent watchdog, Infrastructure Australia, says the benefits are “overstated”. The National Audit Office has also waved red flags. Even though the State is already drowning in debt — heading toward $2.50 owed for every dollar of revenue it collects.

Why would sensible people do this?

Well, when the numbers don’t make sense, follow the incentives. And the incentives here look an awful lot like the construction unions, certain superannuation funds, big contractors, and some foreign state-owned banks. Namely, the Victorian ALP construction ponzi scheme. That is the scam that is sending the State broke.

Scheme members are all now whispering in the Premier’s ear: “Get the tunnel borers in the ground before anyone can stop it.”

Once those giant machines start chewing up the earth, the project becomes “too big to fail”. Future governments — Liberal, Labor, or Martian — will be on the hook to finish it, no matter the cost overruns.

That, my friends, is not capitalism. That’s a rigged poker game where the house has already stacked the deck and borrowed the chips from your grandchildren.

We have run into this same thing many times across Australia. Local politicians say, “We’re creating jobs!” Sure, but you could create twice as many jobs paving every pothole in the State and still have money left over for the schools. Jobs that come from wasting capital are not real wealth — they’re just a very expensive way to move polluted dirt from one place to another.

Victoria like the rest of Australia, has real needs: roads that are crumbling, hospitals that can’t answer the phone, outer suburbs where young families can’t catch a train to work.

Instead, of focusing on basic services and fighting corruption, the Allan Government is choosing a gold-plated orbital railway that even some of their own Labor MPs think is nuts. That tells you the decision isn’t being made in the public interest. It’s being made in the interest of a very specific group that benefits when concrete is poured, whether the public ever rides the train or not.

Even more troubling, the Federal watchdog overseeing the clean-up of the CFMEU has warned that workers and union delegates with links to bikies and organised crime have allegedly infiltrated the Suburban Rail Loop project due to the inaction of tier-one builders to combat corruption.

The Fair Work Commission has singled out major contractors for their lack of effort in fixing endemic issues in the sector affecting major Commonwealth and state-funded projects on the east coast.

If Prime Minister Albanese wants to do the right thing — the honest, grown-up thing — he ought to take two simple steps any good board of directors would demand.

First, call a full, no-holds-barred royal commission into how these Big Build projects have been awarded, who knew what and when, and why certain contractors seem to win every jackpot. Sunshine is the best disinfectant, and Victoria right now could use a very bright sun.

Second, tell Infrastructure Australia to put every single updated document about the Suburban Rail Loop on the internet tomorrow morning — the whole business case, the new numbers, the value-capture fairy dust, all of it. If the project is as wonderful as the minister now says it is, the numbers will speak for themselves. If they don’t release it, well, you’ll know why.

Australia is a country where people have a basic straightforward decency. We must ensure that a few spivs in government and consulting firms dressed in hard hats and high-vis vests turn it into something else. Once you tolerate a little bit of state-sponsored corruption, Australia becomes a third world nation.

Anyway, why should Australian taxpayers bail out Victoria’s economic suicide pact?

Because once you start writing blank cheques for projects that lose 50 cents on the dollar, every other State premier will want his own shiny train set. And soon the whole country is in the tunnelling business instead of the wealth-creating business.

That’s not the Australia we all love. And it sure isn’t the ALP way. Think here of past prime ministers like Ben Chifley, Bob Hawke, or how Paul Keating would have run a railroad. It’s not the approach of ALP State premiers like Chris Minns, Peter Malinauskas and even Roger Cook, and so must be rejected.

Stephen Anthony is a director of Macroeconomics Advisory and an adjunct professor at the University of Canberra. He chaired the recent Independent Pricing Committee into the NDIS.