With little fanfare this week, the Coalition has produced a smart, sensible, realistic infrastructure policy. The fact that it’s the leader of the Nationals that has produced it is an even more welcome development.
As we discovered under the Howard government, Nationals and infrastructure go poorly together. That government famously wasted over $160 million on a 1400-kilometre white elephant, the Alice Springs-Darwin railway line, and National Party ministers were found to have engaged in blatant pork barrelling of “regional development” funds.
But the policy released this week by Warren Truss builds on the good work of Labor in bringing more rigour to infrastructure funding decisions by committing to rectify the one significant flaw in Infrastructure Australia’s operation: it doesn’t as a matter of course release its assessments of infrastructure projects.
Under Truss’s plan, Infrastructure Australia would be required “to routinely publish public cost-benefit analyses for all projects being considered for Commonwealth support or investment”, providing greater transparency for infrastructure decision-making.
It’s the sort of commitment one only makes in opposition. Once in government, the urge to keep such potentially inconvenient assessments — which might reveal that a politically-favoured project is a complete waste of money — becomes much stronger.
Truss has also committed to a rolling 15-year pipeline of projects, to be reviewed every five years. Wisely, they’ve avoided the temptation of committing to developing any sort of national transport plan or strategy. Such documents are a waste of time and previous versions litter bureaucrats’ shelves in Canberra, their spines uncracked, forgotten the moment the accompanying media release went out.
And Truss’s proposal for infrastructure funding is also worthwhile for what it doesn’t say:
“After meeting with a large number of private investors, superannuation funds, construction companies and many others with a direct interest in infrastructure, there is no ‘silver bullet’ to unlocking the kind of investment we need. It is clear that a one-size-fits-all approach will not successfully bring more projects to market.”
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For an old transport speechwriter, such words are a welcome dose of common sense, with Truss resisting the temptation to declare the complex challenge of funding infrastructure solved via the latest piece of whizz-bang financial engineering that glosses over the basic problem of apportioning risk. Truss’ “solution” could be portrayed as simply deferring the problem — he proposes to establish a “Funding and Finance Advisory Unit” inside within Infrastructure Australia — but it’s a realistic acknowledgement the Coalition from opposition isn’t going to solve a financial and policy problem that has bedevilled governments for over 20 years.
The policy is by no means perfect — unaddressed is the Coalition’s arbitrary and absurd retreat from funding metropolitan public transport, which is likely to have significant benefits in terms of reducing the growing burden of congestion. And Truss approvingly cites a Business Council claim about building costs in Australia that Crikey demonstrated was nonsensical a year ago. But by committing to greater transparency and a sensible approach to the difficult problems of infrastructure funding, Truss’ policy further improves infrastructure decision-making beyond what Labor has delivered.