Labor's East West Link U-turn gets Melbourne to right end, by dubious means
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Version 0 of 1. There is a certain sleight of hand about Labor’s justification for abandoning its commitment to honour any contract for Melbourne’s East West Link if it is signed before the state election. It’s too cute by half. Labor has said endlessly that one of the biggest infrastructure projects in the state’s history is “a dud”. But it also insisted it would have no alternative but to proceed with it if it forms government after November’s election. To tear up a valid contract risked Victoria’s credit rating and would harm investor confidence. ‘’The view we subscribe to is that it’s a well-accepted practice that future governments accept and honour contracts signed by a previous government,” was how shadow treasurer Tim Pallas put it. Now Labor has discovered a handy, if disingenuous, way around that position. Two inner-city local councils, Moreland and Yarra, are challenging in the supreme court planning minister Matthew Guy’s decision in June to approve the East West Link. They claim the decision was made in error and is invalid. Critically, the case is set down for 15 December, two weeks after the election. The government repeated on Thursday that it intended signing contracts in October. So Labor sought the opinion of three lawyers who concluded that if the court finds that the minister’s decision was indeed invalid, “any purported contract entered into ... will be beyond power. In such a case, no contract exists”. The legal advice doesn’t give a view as to whether the minister’s decision was invalid or not, only that if it is found to be, there’s no real contract. That’s hardly surprising. Of course, the court may find the minister exercised his powers properly, but Labor intends to make that impossible. If it wins the election, it will play dead in court. It won’t defend the case against the councils, and it won’t fix up any planning errors that may be identified. Unless another party gets standing to defend the planning minister’s decision, the councils will win their case by default. All of which means leader Daniel Andrews can at least try to maintain that Labor won’t be ripping up a “valid” contract, because there’s no possibility it will be found to be valid. It is an extraordinary argument that a couple of councils challenging a government decision – hardly a rare event – gets Labor out of its commitment. There are risks for Labor in this. The business community strongly supports East West Link and is not happy. So does the state’s biggest selling newspaper, the Herald Sun. And Labor’s own legal advice acknowledges that any consortium that signs a contract could seek compensation if it is abandoned. The Napthine government is claiming, probably wildly, that compensation could amount to $3bn, comprising $2bn that will have to be handed back to the federal government and $1bn to the winning consortium. There is plenty of political bluster in this but, tricky or not, Labor’s decision is good for Victorians. There is deep opposition to East West Link. The government says it is a “congestion buster” essential for a growing city, but it has refused to release the full business case, claiming it is commercially sensitive, and its assumptions about the impact on traffic have been questioned. The link’s two stages will cost $18bn and will cut a swath through inner city neighbourhoods. There are good arguments to link the east and the west of the city, but Labor is right that that argument needs to be had before the election. There’s no urgency to sign the contracts weeks from the poll, whatever the government says. Labor’s decision gives Victorians a genuine choice about which infrastructure is best for the future of Melbourne. Politics aside, that’s not a bad thing. |