Kevin Rudd wants to make nation-building fashionable again and it seems like the times suit him. He was already selling the merits of his “$76 billion” infrastructure program earlier in the year, before the talk turned to recessions and depressions.

Quite a bit of that “$76 billion” is notional money from this year’s budget surplus, which may not yet eventuate. There suddenly seems to be an awful rush to allocate it before it has materialised in Consolidated Revenue, which would appear to be an act of optimism in the current economic climate.

As disturbing as it is to find oneself in agreement with the right-wing economist and fine friend of oligopolists Henry Ergas, his description of the Government’s assessment criteria for major infrastructure projects as “bad haiku” is dead right. Yesterday’s release of the criteria engendered – at least in this naive writer — an expectation of detailed requirements, weightings, an explanation of the information and benchmarks that would be used to assess projects, and what sort of evaluation framework would be put in place for the construction and operation of the projects.

Instead, all we got was:

All proposals will be assessed against their ability to:

  • lift national productivit
  • strengthen Australia’s international competitiveness
  • develop our cities and regions
  • reduce greenhouse gas emissions
  • And (sic) improve the quality of life of Australians.

They even skipped the semi-colons.

It’s a cracker of a statement of the bleeding obvious; state treasurers across the nation must be kicking themselves for including all those projects that were going to cut productivity and degrade Australians’ quality of life.

The Coalition’s complaint that the Building Australia fund was a slush fund initially looked silly, especially coming from the side of politics that proudly gave us the Alice Springs-Darwin railway — the world’s longest ghost train ride — and a program, Regional Partnerships, that achieved new heights of rorting and pork-barrelling even by the National Party’s particularly grubby standards.

But it has been given a boost by the Herald’s unsourced reports about Swan and Rudd considering the electoral implications of projects put forward by Morris Iemma.

Some context is needed for that story, however. No politician would ever consider a major project without checking what electorates it goes through. It’s second nature to them. And it doesn’t necessarily mean political motivations become the key criteria for allocating money. Much was made of the previous Government having electoral maps prepared when considering regional broadband rollout, but the faux-outrage in that instance missed the point that the Howard Government was only doing what every Government does – check what the political implications are of a project.

Thus, though Rudd and Swan have strongly denied the claims, it’s hardly unlikely they would have done the same thing — or that it means infrastructure will be driven by marginal seats.

But the bigger problem is that, if the Government is going to allocate funding purely on the basis of the maximum economic and environmental benefits, then an awful lot of money will go into Sydney and NSW. Last year, Infrastructure Partnerships Australia released a report on the priorities for national infrastructure investment. The bulk of the projects identified — 13 of 20 — were in Sydney or NSW, where population, economic density and years of infrastructure under-investment mean the greatest productivity benefits will be obtained.

It’s also likely to be where the greatest carbon-mitigation benefits are obtained from the provision of more mass transit options for commuters.

Directing 65% of infrastructure funding into NSW isn’t likely to go down too well with anyone outside the NSW ALP and NSW Federal backbenchers. So political considerations will come into play in distributing the funding more “fairly”. And no one is likely to object to that other than Nathan Rees and Eric Roozendaal.

Peter Fray

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