Labor commits $500 m to Adelaide light rail – with no business case and no idea if it is a good use of taxpayer’s money

How does Bill Shorten know that investing $500 million in the AdeLINK light rail project is a good use of taxpayers’ money?

The answer is clear: he does not know this – because no business plan has yet been done.
Shorten does not know how much the project will cost. All we have so far is a back of the envelope estimate – from Labor politicians – that AdeLINK will cost $3 billion.
Shorten does not know whether it will bring benefits which are greater than its total costs.
Shorten does not know where the rest of the money will come from. If federal Labor is putting up $500 million – does it expect the SA Government to come up with $2.5 billion?
Labor has made this mistake before: in 2009 it offered money for the Gawler Line electrification, but subsequently withdrew unspent funding when the SA Government could not afford the matching funding to complete the project
So far AdeLINK is an early stage concept for a series of light rail lines running from the CBD to several locations around the city.
Infrastructure Australia has assessed this early stage concept as an ‘initiative’. As Infrastructure Australia explains, this designation means it needs ‘further development and rigorous assessment to determine and evaluate the most appropriate option for delivery.’
The SA Government announcement that it was preparing a detailed business case for AdeLINK came only three months ago.
The business case is not done. It has not been lodged with Infrastructure Australia. IA has not made an assessment of the business case.
Troublingly, Shadow Treasurer Chris Bowen revealed on radio yesterday that he does not understand how the IA works – claiming, wrongly, that AdeLINK had already gone through all the IA approvals processes.
The rule is very clear: if a project requires Commonwealth spending over $100 million, its business case must go to Infrastructure Australia.
The point is to ensure that large commitments of taxpayer dollars are made only after proper assessment by an independent agency.
Labor has consistently said it supports this rule – but now its deeds are the opposite of its words.
The issue here is not whether the Turnbull Government should support public transport. Of course it should – and it does.
Just last week Malcolm Turnbull announced a $43 million commitment towards Flinders Link, extending the Tonsley rail line to Flinders University.
Around Australia the Turnbull Government is providing funding for projects such as Gold Coast Light Rail and Parramatta Light Rail in Sydney.
But Governments, federal and state, cannot spend without limit – on infrastructure or anything else. So we must take care to invest in the projects which deliver the most benefit.
Taking care with public money, sadly, is something Labor is no good at.
But the Coalition is – which is why we want to see AdeLINK go through a proper process. That means a business case prepared by the SA Government, lodged with Infrastructure Australia, and assessed by Infrastructure Australia.
We look forward to receiving that business case – and in the meantime the Turnbull Government will get on with delivering on nearly $3 billion in infrastructure spending already committed to South Australia in this term of government.