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May 21, 2008

Infrastructure Australia bosses will test Rudd's accountability mantra

Given the Government’s commitment to improved accountability and merit-based government appointments, the membership of Infrastructure Australia, announced on Monday, was always going to be a key test, writes Bernard Keane.


Given the Government’s commitment to improved accountability and merit-based government appointments, the membership of Infrastructure Australia, announced on Monday, was always going to be a key test.

While Labor links can be found for some of the private sector appointees — most particularly, former Beattie right-hand man Ross Rolfe, and former ACTU assistant secretary Garry Weaven — the Government appears to have made an effort to appoint genuinely independent expertise, including Mark Birrell (the Government seems to like a token Liberal in its appointments, although he’s there as head of Infrastructure Partnerships Australia rather than for his political past), and KPMG’s Queensland chairman Phil Hennessy. And the bat-signal has been used again — no Government review or inquiry is complete these days without Heather Ridout.

There is also strong representation from the resource boom states: Anthony Kannis from WA Treasury, environmental and planning academic Peter Newman from Curtin University, and Hennessy and Rolfe from Queensland. Water and energy expertise is available through South Australia’s Jim Hallion and Sydney Water’s Kerry Schott.

If there’s a gap, it’s the lack of a genuine urban transport guru, although Professor Newman can cover that role.

The most problematic appointment is Ross Rolfe, who earlier this year was investigated and cleared by the Queensland Crime and Misconduct Commission over his purchase from Mirvac of two units at the Tennyson Powerhouse site. Rolfe is now head of Infrastructure at Babcock and Brown. Given Babcock and Brown are the second biggest Australian infrastructure investor/broker/ticket clipper after Macquarie Bank, Rolfe has a potentially huge conflict of interest.

In practical terms, conflict of interest in this area is hard to avoid: finding someone with sufficient expertise for a role with Infrastructure Australia without extensive links with one or many of the country’s major transport, construction or investors would be almost impossible. Albanese’s office has also pointed out that Infrastructure Australia will only be making recommendations to Government, rather than making investment decisions. And the Act establishing Infrastructure Australia has standard disclosure and absenting requirements for directors with an interest in issues being discussed.

The question is how many meetings Rolfe will be able to attend under these requirements, once individual projects, in which Babcock and Brown may be interested, come up for discussion? And you’d have to wonder, if a Macquarie Bank executive had been appointed, just what the media reaction would’ve been.

More comforting is the slight change in government rhetoric about superannuation investment in infrastructure.

“It’s a matter for commercial decision by the trustees of those funds. It’s that simple,” Wayne Swan declared on Monday. “The superannuation industry takes its decisions about investment independently from anything that we do.”

Which is comforting for those of us who prefer not to see our superannuation being poured into infrastructure projects being picked by politicians.


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