Malcolm Turnbull has threatened to delay $1.2bn in federal infrastructure funding to Western Australia if Labor wins the state election and abandons the Perth Freight Link project.
On Monday the prime minister warned that Labor’s Mark McGowan cannot demand $1.2bn for an alternative project in an earlier planning stage, such as Metronet, and tearing up Freight Link contracts could delay the funding by years.
The warning to voters before the 11 March WA election could set the state up for a repeat of the situation in Victoria, where the Labor government argues it has been shortchanged by $573m in federal funds for abandoning the East West link.
On Monday in two radio interviews Turnbull said that the Perth Freight Link was a “high-priority” project as assessed by Infrastructure Australia, and the WA government had already entered contracts to build it.
“If McGowan becomes premier and cancels that project then not only will he have to pay hundreds of millions of dollars, presumably, in damages to cancel those contracts – he cannot then demand $1.2bn for something else,” he told 6PR.
“If he has another project, Metronet or whatever it may be, he would have to do all the homework … present a business case … make a submission, it would have to go through Infrastructure Australia.”
The first phase of WA Labor’s proposed $3bn Metronet project includes building or completing five rail lines. The WA opposition is counting on $416m in federal funds for it.
In May a Labor-controlled Senate inquiry recommended that the federal government abandon its support of the freight link in favour of alternative infrastructure projects. It found that its business case was “fundamentally flawed”, including the risk of significant extra capital costs if more tunnelling than was first planned was required to complete it.
Turnbull told 6PR that McGowan merely had a “concept”, in comparison to the Barnett government’s “fully designed” Perth Freight Link project. “Freight link is ready to go – if you pull the pin on that it would be years and years before you got an alternative project up.”
He told ABC Perth the Metronet may develop into a “very good” project but was now “little more than a press release”.
Asked on 6PR whether the federal Liberals would follow Barnett’s lead and do a preference deal with One Nation, Turnbull said the federal government dealt with Pauline Hanson and her party all the time.
“[Hanson] currently has three seats in the Senate,” he said. “Presumably when there’s the recount here to fill the vacancy created by [former] senator Culleton’s being disqualified, she’ll have four again.
“[Hanson] is an important part of the mix of the Senate … We deal with her and treat her with respect … we deal with her constructively.”
Turnbull said he understood why Western Australians were “aggrieved” that the state got 30 cents in the dollar in GST revenue it contributed to the federal government.
He said the federal government had “effectively created a floor of 37%” by contributing an extra $500m a year to WA in each of the past two years. By 2019-20 the state’s share would correct up to 70%-75%, at which point the federal government would seek to put a floor on states’ share of GST revenue.
Turnbull also announced an extra $100m for the defence industry in WA to enable it to complete the contract for Pacific patrol boats and offshore patrol vessels.
