28 June 2014
The following article by the new Infrastructure Australia Chairman, Mark Birrell, appeared in Australian Financial Review on 18 June, 2014:
For too long Australia has seen congestion, bottlenecks and queues constrain economic growth. A costly shortfall of infrastructure has depressed productivity and often resulted in business performance and employment creation being compromised.
We deserve better and—if we get our infrastructure right—will protect Australia's quality of life at a time of population growth and global economic change. So it is very timely the Abbott government has given Infrastructure Australia a special mandate to develop a nation-wide vision for economic and social infrastructure, resulting in a comprehensive 15-year Australian infrastructure plan.
It is to be produced in close partnership with the private sector and all state and territory governments. Ideas will be invited from the public; capturing the aspirations of those who are direct consumers of the many services that infrastructure delivers.
We should, in an ambitious but practical way, seek to fill the nation's infrastructure gap by continuously improving the way major projects are planned, procured and operated.
Most importantly, we must expand the total funding base for new infrastructure and create effective market mechanisms that encourage whole-of-life asset management and higher standards of service delivery.
New and better-run infrastructure is needed that:
Infrastructure prioritisation and delivery will require a step-change and projects should only be approved subject to a cost-benefit analysis and transparency about the objectives they are designed to achieve. Infrastructure Australia will, therefore, independently assess proposals and report the reasons for approval.
Evolving out of all this will be an observable and respected prioritisation process and a highly credible pipeline of nationally significant infrastructure projects. Across the nation we can ensure new infrastructure is constructed for the right reasons at the right time, with equal effort ensuring existing utilities, networks and capital assets are used more efficiently.
It is critical the discussion about infrastructure simultaneously canvasses the great constraint on progress: funding. Debate must be encouraged on fresh ways to turn project ideas into reality, exploring the full variety of financial options.
Australia can better utilise private capital, including superannuation funds, and not rely on taxation or public debt.
Particular attention should be placed on recycling capital: selling or leasing old assets like ports and energy facilities, and immediately injecting the proceeds into new assets, like public transport or freight networks. Handled well, the multiplier effect of these initiatives will be considerable and long lasting.
Whilst there is a lot of work to be done, I am optimistic that an Infrastructure Plan can be developed which secures positive and transformational outcomes. We can help set Australia up for a higher standard of living, with employment opportunities that more than match our expected population growth.