A Road, A Contract, The PM And A Puerile Premier: Pull Your Head In, Andrews

AN UNGODLY BRAWL between Prime Minister Tony Abbott and Victorian Premier Daniel Andrews is escalating, or at least Andrews seems to want to escalate it; the issue of a contract to build a major piece of road infrastructure in Melbourne has skewered Andrews’ pledge to abandon the project amid po-faced guarantees no compensation would be payable by the state of Victoria. Andrews is cornered. He should pull his head in and build the road.

First things first: this isn’t the “economic and infrastructure policy issue” I said I really wanted to cover off on when I posted yesterday; that will have to wait now, and we will see if we can return to it over the weekend: it isn’t too timing-specific.

That said, a major political shitfight has blown up in the past 24 hours or so between Prime Minister Tony Abbott and Victorian Premier Daniel Andrews over the fraught issue of the East-West Link in Melbourne, the construction contract for which was signed prior to last year’s state election by what has since proven to be the outgoing government of former Premier Denis Napthine.

I gather most readers will be familiar with the story: Liberal state government spends more than a year tilling the ground (literally) to build the “missing link” in Melbourne’s freeway network as a toll road, signs a contract the Labor Party swears blind is invalid — and that it will cancel the project if elected — and the Labor leader solemnly declares that not only is the contract totally unenforceable, but that no compensation would be payable in the event the ALP won office in Victoria.

Then — on 29 November last — the Labor Party won the state election.

As a little background to these events as they stand today, readers may peruse material from the Murdoch press or from Fairfax, depending on preference.

But an exchange of letters on Wednesday between the Prime Minister and Victoria’s infantile Premier has proven illuminating, and lays bare the hole Andrews dug for himself last year by making election pledges that he either knew were undeliverable or knew keeping them would damage Victoria’s reputation internationally.

This issue has been simmering ever since the votes were tallied last year, as Liberals (to say nothing of many affected Victorians and the business community) try desperately to find some way to convince the Andrews government to build the road, and as the Andrews government digs in stubbornly to insist that it won’t.

Here is the Prime Minister’s letter to Daniel Andrews:


And here is the juvenile, childish response it elicited:


Readers will note, of course, that Andrews insisted on signing himself off as “The Hon Daniel Andrews MP” — a churlish point to make, perhaps, but it speaks to the deluded ego and pompously excessive sense of his own importance that has been so evident in Daniel Andrews to many in this state for too long now.

Be that as it may, I’m not going to talk about this matter endlessly this morning; the entire brouhaha has already consumed more time (and money) than it should have, and whilst Andrews is now trying to score additional cheap political points from his representation of a conversation with the Prime Minister by telephone (which Abbott has wisely declined to even respond to, let alone refute), none of this changes a few very basic points.

One, governments are elected to govern: and the previous Liberal administration did just that.

Yes, the contract to build the East-West Link was signed shortly before an election. But the preparatory planning and consultation involved had gone on for more than a year. A parliamentary term in Victoria is fixed at four years, which commences the day writs are returned after an election and ends when government goes into caretaker mode in the lead-up to the next. There is no legitimate grievance on the ALP’s part that the previous government formally commissioned the East-West Link last September.

Two, Commonwealth funds allocated to Victoria in the sum of $3 billion were explicitly tied to the East-West Link; prior to the state election — with Andrews declaring he would halt the project if he won — it was spelt out by the federal government that if the project was cancelled, the monies would be withdrawn.

At the time, Andrews and his henchmen assured Victorian voters that this could not and would not happen, as the money was “for Victoria.” Those federal funds will now be reallocated to other projects that may or may not be based in Victoria.

Once again, Andrews has nothing to throw a tantrum over here. It isn’t as if he wasn’t warned.

Three, Andrews swore before the election — hand on heart — that the contract to build the East-West link was completely unenforceable; it “wasn’t worth the paper it (was) printed on,” he said. Labor, if elected to office, would simply rip the contract up.

And four, no compensation (and Andrews was brutally clear on this point) would be payable by the state of Victoria to the consortium contracted to build the road if the contract was abandoned, Andrews claimed; if the contract was unenforceable, went the logic presented, then no compensation could possibly be claimed by those who were dumb enough to have signed it.

So let’s cut straight through the Premier’s puerile and irresponsible bullshit.

If the contract was not “worth the paper it is printed on” and unenforceable, it would have been abandoned by now.

If the contract was unenforceable, the Andrews government would not be contemplating passing retrospective legislation to invalidate it to get out of paying compensation, with the state’s potential liability credibly said to run close to $1.2bn.

If no compensation was payable, there would be no talk of the consortium being prepared to walk away “for $700 million” and other outlandish sums of money as the price of doing nothing.

And if none of this was such a problem in the first place — remembering, again, that the contract wasn’t torn up months ago for the only possible reason that it was, in fact, legally binding — then the East-West Link would have ceased to exist as an issue about a week into Andrews’ term as Premier.

In short, the promise to “rip up” the “unenforceable” contract and to abandon the East-West Link was one Daniel Andrews should never have made: had he known the promise was impossible to deliver as pledged, it speaks to the contemptibility of the ALP and of Andrews himself in being prepared to say quite literally anything to anyone to win an election; if he didn’t know the promise was undeliverable then it speaks to his utter unsuitability and complete unfitness to hold elected office at all, let alone to serve in the great office of Premier of Victoria.

Whichever way you cut it, it is Andrews who has much to answer for — not Tony Abbott, and not Dr Napthine.

In the meantime, the Prime Minister (and others who appreciate the subtle concept of legally binding contracts) — aghast at the siren call Andrews’ intended call of action would send international investors to stay away from Victoria when it comes to spending their money — are almost pleading in their attempts to cajole the child Premier into rethinking the error of his foolish plan.

But Andrews will have none of it, and the embarrassing and unacceptably patronising response he gave to Abbott’s letter of 11 March failed to address every issue of substance that was raised with him by the Prime Minister in that letter.

Andrews is already cornered on this issue; damned if he builds the road — breaking an election promise he purports to intend to keep — and damned if he doesn’t build the road, at a cost of more than a billion dollars and doing incalculable damage to Victoria’s (and Australia’s) reputation as a stable and secure environment in which business can invest.

Andrews should build the road: for the lesser of the two evils requires it of him, even if it also requires an explanation to Labor voters in Victoria as to why he promised something he claimed could be delivered painlessly, but in fact couldn’t.

As for the smart-arsed, smug, patronising and belligerent treatment he has taken it upon himself to mete out to the Prime Minister, he should pull his head in.

Prior to last year’s state election I opined that if Labor won, Victoria would be landed with a complete moron as Premier; by his words, actions and behaviour this week, Andrews has proven this assessment to be summarily accurate.

It won’t be the last time, with the next election in Victoria still three and a half years away.

In the meantime we can only hope that Andrews and his cohorts exercise more diligence and care in their approach to the serious business of governance and to affairs of state: the East-West Link could cost Victoria far more than the billion or so in compensation the state seems certain to have to pay.

Not for the first time, a state Labor government in Victoria appears content to piss ten-figure sums of taxpayer cash up against a post.

The last time it happened — under John Cain in the 1980s — Victoria was very nearly bankrupted as a consequence.

I see this government as potentially as bad as that, and it isn’t the first time I have raised the Cain comparison. At least Cain didn’t behave like a teenage student politician having a lark, entirely innocent of any care for the consequences of his actions even if, in the end, those repercussions were dire.

It’s more than even a generous assessment could say of Daniel Andrews, based on his performances to date.



8 thoughts on “A Road, A Contract, The PM And A Puerile Premier: Pull Your Head In, Andrews

  1. Umm ? Where’s the copy of the secret letter signed by the Liberal government prior to the election guaranteeing compensation should the project not proceed as was reported in the MSM?

    • Guaranteed payment of ‘service fees’ for 20,plus years whether the dud tunnel was built or not and for whatever reason. Boy did they see Napthine coming or what?

  2. I bet Dan is a huge inspiration to the youth of Victoria. Go to uni and complete the obligitory Arts degree. Join the Labor party and become an organiser and electorate officer. Get elected to parliament and become Premier. Write a snippy letter to the Prime Minister and tell everyone about it; just because you can.
    All without ever doing a single days work in a real job. Magnificent.

  3. Chew on it Victorians. You deserve to suffer for voting this prick in. No sympathy. In four years time when the place looks like Beirut, don’t ask the rest of the country to bail you out. You think the Pyramid scandal was bad. You think Cain and Kirner were idiots. You have no idea. My advice – bolt your doors to stop CMFEU stormtroopers from demanding protection money from your household.

    • How very adult of you. And what was that duffer Napthine doing signing an unconditional contract to pay service fees for the dud tunnel regardless of whether it was legal to build or not.

      Two separate court actions are still pending either of which could still sink the deal.

      The outrageous side letter was bluffed out of Napthine by the consortium which threatened to rip up its own contract. This is now being investigated by the Victorian Auditor General.

      The consortium hid the rubbish business case from voters and Infrastructure Australia which is supposed to vet any infrastructure project which is to receive federal funds.

      Abbott’s failure to follow due process by committing federal money without consulting Infrastructure Australia is the subject of a separate investigation by the Commonwealth Auditor General.

      It seems rules don’t matter to the hooray henrys when there is a buck to be made.

      • Yeah. Reminds me of all those billion dollar desalination plants that aren’t used. Massive pay days for years for the good old union bovver boys.

  4. Absolutely! A Napthine/Consortium shufty to make sure that the infrastructure has to proceed or cost pretty much the same to call it off! Typical Lieberal pirate capitalist behaviour!

  5. If they pass that retrospective legislation, good luck to any ALP government wanting to get funds from overseas investors. These large funds are often Retirement funds investing superannuation money and they have a legal responsibility to safeguard members monies.

    Dealing with people who change the laws to suit their political purposes is simply too great a risk to take. They will also rightly assume that if the Victorian ALP government does this, then so will any other ALP government, as Anna will find out when it’s constantly brought up in negotiations.

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