Last week's comments by the Deputy Premier John Barilaro have a familiar ring. He said: "We will not apologise nor justify for choosing to live where we live. We will not apologise because we won't accept the 30 per cent rule anymore and allow Treasury bean counters to frame regional NSW through business cases and tell us what is best for us."
Mr Barilaro has long expressed his frustration that infrastructure spending is not hitting the ground in the regions. And he is not wrong: according to the Auditor General, the government has only achieved 19 percent of its 30 percent target for regional infrastructure funding.
The source of this funding is a $33 billion war chest called Restart NSW that comprises the proceeds of the state government's asset privatisations. It is further bolstered by $4.3 billion from the sale of our state's shares in the Snowy Mountains Scheme which has been entirely earmarked for areas classified as 'regional'.
To date, Wollongong (local government area) has received an unacceptably low 0.3 percent of the total investment from the proceeds of the state government's asset privatisations.
As we saw last week with the exclusion of its residents from the Regional Seniors Travel Card program, Wollongong is not classified as regional by the state government. This leaves us to compete for infrastructure funding against the greater Sydney basin, which is hoovering up billions to deliver WestConnex, Sydney Metro City and Southwest and Parramatta Light Rail Stage 1.
And unlike many other communities around the state, Wollongong has skin in the game when it comes to asset privatisation. In 2013, Port Kembla and Port Botany were leased for a period of 99 years, which tipped $4.3 billion into Restart NSW.
In fairness, the state government has reinvested a $100 million back into the region through the Illawarra Infrastructure Fund, and will invest a further $99 million into community initiatives around Port Kembla over 99 years via the Port Kembla Community Investment Fund. And that is practically where the fairness ends. But there are no shortage of critical infrastructure projects in Wollongong.
For starters, the upgrade of Picton Road to motorway standard is imperative to allow the economies and the workforces of the Illawarra and south western Sydney to leverage off one another. And with our creaking South Coast Line reaching freight capacity by 2030, it is time to examine an alternative rail linkage to south western Sydney and the aerotropolis. So do we have to do to get these projects funded?
The Treasury officials referenced by Mr Barilaro will tell you that before any infrastructure project gets underway, a benefit-cost ratio (BCR) assessment is done. Put simply, this is an assessment to see if the benefits of a project exceed the costs. If the benefits exceed the costs, the BCR is said to be greater than 1. Unless the sacred BCR assessment yields a score of 1 or higher, a proposed project will not receive NSW Government funding.
To date, Wollongong has received an unacceptably low 0.3 percent of the total investment ...
However the rule stated by the bureaucrats doesn't seem to apply when it comes to spending money in Sydney. Take for example the BCR undertaken for Stadium Australia, which identified a BCR of between 0.80 and 0.91, and yet funding was approved. The BCR for the new Stadium at Moore Park was also less than 1, but this was also approved. The BCR test fails in reverse for projects located in the Illawarra.
In 2017, the Illawarra Business Chamber commissioned the University of Wollongong to to assess the economic impact of all rail options linking the Illawarra to greater Sydney. This found the construction of the South West Illawarra Rail Link (SWIRL), utilising the partially constructed Maldon-Dombarton rail corridor, would deliver a BCR of 1.13 and run passenger and freight services. But the government has not been motivated to explore the project further. Despite the clear need for intervention, it has shelved the SWIRL for investigation in 10 years and relegated our near-term transport constraints for resolution by the post-2056 Outer Sydney Orbital project.
We are in the midst of a $93 billion generational infrastructure boom. Perhaps Mr Barilaro is correct in saying that the BCR rule book needs to be torn up and that regional infrastructure spending needs to be increased and expedited, because outside Sydney it can deliver more profound economic and social benefits.
But on this basis, Wollongong can no longer be left out in the cold. We are a growing economy that supports the rest of the state. It is time for Wollongong to be considered for a share of regional infrastructure funding, given we have game-changing infrastructure projects that stack up economically.
Adam Zarth is the Executive Director of the Illawarra Business Chamber and Illawarra First