Minister refuses to clarify Chinese links to $24.5bn loan plan

Victorian Transport Infrastructure Minister Jacinta Allan refused to answer questions about a Belt and Road agreement with Beijing.

Victorian Transport Infrastructure Minister Jacinta Allan and Premier Daniel Andrews. Picture: Nicole Cleary

Victorian Transport Infrastructure Minister Jacinta Allan has repeatedly refused to answer questions about whether up to $24.5bn the Andrews government intends to borrow to deal with the coronavirus pandemic will be sought from China through the Belt and Road agreement.

Ms Allan fronted a Parliamentary Accounts and Estimates Committee hearing on Wednesday, facing questions about Chinese involvement in signature infrastructure projects including the Melbourne Metro rail tunnel and West Gate Tunnel.

Chinese government-backed companies including John Holland and MTR are key members of the consortia building the projects.

Both projects have recently run into trouble, with the Andrews government in negotiations over a cost blowout that could exceed $3bn on Melbourne Metro, and more than 200 West Gate Tunnel workers recently stood down amid a dispute over toxic soil.

Ms Allan’s refusal to give direct answers about the Andrews government’s business deals with Beijing comes after Victorian Treasurer Tim Pallas on Tuesday claimed China’s imposition of an 80 per cent tariff on Australian barley was a consequence “of the way that the federal government have conducted themselves”.

Federal Labor MPs slammed Mr Pallas overnight, with Victorian Labor senator Kimberley Kitching — who chairs the Senate Foreign Affairs Defence and Trade References Committee — saying state governments “have no constitutional responsibility for foreign affairs and trade” and should leave such issues to Canberra.

“The Victorian government should not have entered into an agreement with the Chinese government on the Belt and Road Initiative. It is bad policy and bad optics,” Senator Kitching told Nine newspapers.

PAEC deputy chair and Liberal MP Richard Riordan opened his questions to Ms Allan on Wednesday with reference to Ms Kitching’s comments, asking: “Minister, your Metro tunnels and West Gate tunnel projects are now are wildly over budget, and short on Australian materials. How much of Victoria's new $24.5 billion in borrowings will you need to finish these projects, and how much of that is likely to come from your arrangements with the Chinese government?”

Ms Allan initially sought to deflect the question by focusing on a comment Mr Riordan had made in passing about public transport in his electorate, before Mr Riordan interjected: “Minister, back to the tunnels. What are your commitments with the Chinese government?”

PAEC Chair and Labor MP Lizzie Blandthorn then intervened, asking Mr Riordan to keep his questions “relevant” to the terms of reference of the inquiry, which is looking into the government’s responses to the COVID-19 pandemic.

“It’s very relevant. We’re wondering how it’s funded. Go for it, minister. Have you got an answer?” Mr Riordan hit back.

Ms Allan said: “In regards to the Metro Tunnel, and I think you also mentioned the West Gate tunnel, these are two really important projects that have been talked about for a very, very long time and we’re really pleased to be getting on with them and seeing work happen on the Metro Tunnel.”

Mr Riordan intervened again: “Minister, we know about the projects, because you talk about them a lot. What you won’t talk about (is) how much of the $24.5bn in new loans that this government’s arranging will be required for the blowouts that are currently skyrocketing for both those projects.”

Ms Allan replied: “I believe Premier and Treasurer have previously appeared before this committee in the last week or so (and) they’ve both indicated that when it comes to that $24(.5) billion facility that's being provided for in the legislation that passed through the parliament …, the expenditure of those funds will be accounted for in accordance with the requirements set out in the Financial Management Act, and I’ve got nothing further to add.”

Mr Riordan continued to urge Ms Allan to return to the issue of Chinese involvement in building and funding Victorian infrastructure projects.

Ms Allan replied: “That question that you go to around commitments made with China and commitments on our projects, I think it’s more than a little overstepping the bounds of the terms of reference for this inquiry and the bounds of any sort of decent public discussion about public delivery of transport infrastructure projects in this state.

“We have responsible and appropriate discussions with all of our contractors who are, some of them are international contractors, some of them are domestic contractors.

“We talk with all of our contractors on all of our projects all the time on how best to deliver those projects, and importantly, the thousands and thousands of jobs.”

Mr Riordan then asked: “Will you rule out using the Belt and Road agreements with your government and the Chinese government to help finish these projects?”

Ms Allan then sought Ms Blandthorn’s assistance to have the question ruled out of order on the basis that it was “not relevant” to the inquiry terms of reference.

“I think Victorians think it’s a relevant question,” Mr Riordan replied. “She’s asking for (Ms Blandthorn’s) protection so she doesn’t have to answer the question.”

“The budget is in crisis because of coronavirus, the government has made a commitment to borrow another $24.5bn, these projects are overblown, and Victorians need to know and want to know where the money's coming from and I think it’s an entirely reasonable question, which the minister has now for the best part of 10 minutes dodged answering.”

Nationals MP Danny O’Brien later followed up with similar questions, asking: “In light of the coronavirus crisis and your plans to stimulate the economy … will any finance be sought for those projects through the Belt and Road Initiative agreement that you had with the Chinese government?”

Ms Allan replied: “We have a range of live tender processes that are underway right now, and it would be highly inappropriate to speculate on those tender processes, because that would go against all the best probity advice.”

“I know for various reasons you and others want to make, have got this focus on the Belt and Road initiative.

“At the heart of the Belt and Road Initiative, where the government and the Premier has answered questions in relation to this on so many different occasions, this has been an agreement that’s been reached because it's about jobs for the Victorian community.

“It’s about supporting jobs, and at a time like this, there's never been a more important time to look at how we can continue to keep people in work, and look at new job opportunities. So if you want to run conspiracy theories about tender processes and relationships, you can do that.

We will not engage, and we will not allow that to run. We will focus on the appropriate conduct of out tender processes that are underway right now.”

Mr O’Brien said he had not been asking about tender processes.

“I asked about financing of projects. Will any project be financed through the Belt and Road Initiative agreement that you have?” he asked.

Ms Blandthorn interjected: “Mr O’Brien, that’s not in the terms of reference.”

Mr O’Brien then said: “I'll move on because I’m clearly not going to get an answer from you on it, minister.”

He then attempted to ask Victorian Major Transport Infrastructure Authority Director-General Corey Hannett about his 2016 trip to China with Premier Daniel Andrews.

“Mr Hannett, I understand you went to China with the Premier, and I'd like to ask was finance of infrastructure projects discussed under the Belt and Road Initiative, and could it potentially be accessed to finance economic stimulus projects for Victoria?” Mr O’Brien asked.

Ms Allan and Ms Blandthorn refused to allow the question, saying it was not relevant to the terms of reference.

“Chair, this is the question: I understand you went to China with the Premier. Was finance under Belt and Road discussed, and could it be accessed to pay for any stimulus projects under coronavirus? How is that not relevant to the terms of reference?” Mr O’Brien said.

Ms Blandthorn ruled the question out of order, offering Mr O’Brien the opportunity to rephrase his question.

“All right. I will do it as simply as I can, because I know the government is obviously very sensitive and doesn't want to answer questions about this,” he said.

“The government has a massive stimulus program for the economy. Minister, you've been talking about it all morning. In response to the coronavirus pandemic, Minister, and Mr Hannett, you went to China, with the Premier, and I want to know, did you discuss the Belt and Road Initiative and finance, and could any of that finance be used to finance the projects in response to the coronavirus?”

Ms Blandthorn again ruled the question out of order.

“This is the biggest borrowing project in the state's history, and you will not allow questions about where that money is coming from. That is ridiculous,” Mr O’Brien said.

Mr Andrews broke ranks with the federal government in October 2018 when Victoria became­ the only Australian jurisdiction to sign a memorandum of understanding with Beijing on the controversial BRI on trade and investment­ — a scheme seen by Canberra as a vehicle for Chinese regional and global expansion.

The four-page MOU said Victoria­ would work with China to promote the “connectivity” of policy, infrastructure, trade, finance and people­, while acknowledging the state was “welcoming and supportin­g” of the BRI and would promote “the Silk Road spirit”.

Mr Andrews travelled to China to sign a second BRI deal in October last year, agreeing on areas of co-operation including increasing the involvement of Chinese companies in Victoria’s $107bn infrastructure program.