belt and road – Transport for Melbourne

The Premier’s One Belt One Road “Deal” Dead and Buried

Serious concerns were raised about this “deal” in an earlier blog last year. Some of these related to matters of national sovereignty and it is not surprising the federal government has vetoed it. But It also raises fundamental issues of governance which has concerned TfM for some time. It is our view that sound governance and proper process is critical if we are to achieve better outcomes: not just in “transport” but all aspects of government policy with profound impact on our daily lives.

What is particularly concerning is this “deal” according to The Age Friday 23 April was a closely guarded affair done by the Premier in his own office with his then secretary Chris Eccles. According to The Age, senior officials who had trade expertise with links to China were never called and the matter was never approved by Andrew’s cabinet. Further “had he consulted with his federal Labor colleagues they might have told him …. it was its policy not to sign up to the program”.

We believe similar behaviour has been repeated more generally in the state government’s transport infrastructure program. This has also been the subject of earlier blogs, and a forum was run on it (governance) in 2017, but the situation does not appear to have improved since. All governments need checks and balances to keep them honest. It seems the need for transparency and public scrutiny of government at all levels has become increasingly critical.

Beware China’s Belt and Road for Melbourne

We have long argued that infrastructure investment must be justified in its merits – on the basis of need (our collective needs and affordability), and fitness for purpose in the most cost effective manner. Further, that the development of infrastructure programs and projects should be the responsibility of relevant government departments as part of a well prepared strategic plan. It should not be used as a political football for other purposes but unfortunately that is exactly what it has become, particularly in Victoria by becoming linked with China’s One Belt One Road (“OBOR”) project.

Premier Andrews has argued that this is a way to increase jobs. That in itself is inappropriate – there are far more effective ways to create jobs and as I have explained in earlier blogs, using it for this purpose always runs the risk of it being used for political purposes for poorly conceived projects developed in haste that we don’t need.

More important concerns have been raised (The Age 6th October 2020) however by Paul Monk, a former head of China analysis at Australia’s Defence Department about “OBOR” being used to subordinate us into China’s sphere of influence in a way that could impose unacceptable political and economic risks. In the same article Senator Patrick said the freedom of Information documentation revealed “an extraordinary case of a state government pursuing a shadow foreign trade policy, quite separate and independent from the federal government”.

Use of grand infrastructure projects to secure political advantage by major powers is not new. The US through the agency of powerful multinational corporations pursued this for decades, convincing poor countries to accept huge development loans to ensure they were forever in debt to US companies, but often ended up taking over strategic assets when promised benefits failed to materialize forcing these countries to default on their loans. Some political analysts believe China’s “OBOR” has similar objectives.

Whilst the Victorian economy may be more robust than many of the third world countries seduced by these schemes, it is vulnerable nevertheless. Business cases for the Victorian mega projects which would be candidates are expected to provide very poor returns and I have outlined this in earlier blogs. These returns, miserable as they may be will be further diminished as we enter a covid induced recession or worse and recovery may take many years. It may also expose us financially – not just for annual repayments which could be onerous but more so when the debt needs to be repaid. Political implications in this case could be profound. We believe these risks are unacceptable and the federal government has every right to be concerned.