The creation of Infrastructure Australia by the Rudd
Government represents the first concerted attempt at national
leadership in the prioritisation and delivery of public
infrastructure in Australia.
The enabling legislation for the formation of Infrastructure
Australia was passed through the Senate on 20 March 2008. This
will establish a nation-wide and broadly agreed pipeline of
projects to address Australia's critical infrastructure
needs. Infrastructure Australia's mandate is broad and
includes:
- undertaking a national infrastructure audit,
- the development of a Infrastructure Priority List to guide future investment decisions (the first list to be completed by March 2009), and
- streamlining regulation across all jurisdictions to allow more efficient use of existing infrastructure.
The independent statutory body will be significantly
influenced by private sector thinking and experience, with five
of its 12 members, including its chair Sir Rod Eddington, being
drawn from the business pool. All members will be appointed for
a term not exceeding five years.
The likely impact of Infrastructure Australia on
prioritisation and delivery will become clearer when the
identity of the head of the new Office of Infrastructure
Coordination, the 'Infrastructure Coordinator',
and members of the Board are announced.
However, the new legislation along with recent statements made
by the Minister for Infrastructure, Transport, Regional
Development and Local Government, Anthony Albanese, provide an
indication to the types of projects Infrastructure Australia
might regard as of higher priority.
It is unlikely that Infrastructure Australia will limit its
focus to mega projects; as its statutory mandate encompasses
'nationally significant
infrastructure', including transport, energy,
communications and water services, which will improve national
productivity.
Minister Albanese has stressed that as one of the most
urbanised countries in the world, Australia's economic
prosperity depends on the efficiency and liveability of our
capital cities and that urban congestion is a significant
economic cost. Although the issue of urban congestion has been
overlooked by previous Commonwealth governments its encouraging
to now see greater uniformity and cooperation between all tiers
of government towards infrastructure delivery. In particular,
urban rail infrastructure has been identified by a number
authoritative studies as requiring the greatest level of
investment. Currently we are ranked 20 out of 25 (Organisation
for Economic Co-op and Development) nations for investment in
public infrastructure as a proportion of national income. The
establishment of Infrastructure Australia will be a positive
step in moving us the ladder.
The prioritisation of investment in urban public
infrastructure, particularly in transport and water projects in
Sydney, Melbourne, Brisbane and Perth and regional water
projects will be high on the agenda for the incoming
Infrastructure Coordinator. Infrastructure Australia will also
make key recommendations on financing options for individual
priority projects, and if, as suggested, urban infrastructure
becomes a priority, the Commonwealth must find ways to
appropriately fund these projects.
Public investment alone will not be sufficient to meet the
increased demands. Exploring other strong funding options like
superannuation funds will be key to delivering a full range
high quality assets and services. No detail has been provided
concerning the levers that may be used to promote
superannuation funding in public infrastructure, however this
could form part of the brief for the Office of Infrastructure
Coordination.
Whilst in opposition the Government announced, and has since
confirmed its plans to maintain existing assets of the Future
Fund in a 'Building Australia Fund',
for investment in public infrastructure. Recent commentary had
suggested that up to $10 billion dollars will be set aside in
the upcoming Federal Budget by the Building Australia Fund in
projects to overcome urban congestion. However, the creation of
the Building Australia Fund will require amendment to the
current Future Fund legislation.
Finally, it is also clear that the Government will encourage
wider use of current delivery methods that facilitate private
investment in infrastructure projects. It has announced that
nationally consistent guidelines for Public Private Partnership
projects (PPPs) will be finalised this year a welcome
development for all involved in the bidding for projects.
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