Chairman's newsletter—November 2016

Today the Australian Government delivered its official response to our 15-year Australian Infrastructure Plan.

The Government has endorsed the Plan and detailed how it will act on it. The Plan sets out the nation's long-term infrastructure reform and project investment agenda.

In its response today the Government stated: “The Australian Infrastructure Plan, and its companion document the Infrastructure Priority List, provides a positive reform and investment roadmap for Australia and has already been an effective tool in informing decisions by the Australian Government about which further reforms to progress, and over time, investment decisions.”

Key recommendations from the Plan supported in the Government's statement include:

  • Using government incentive payments to drive infrastructure reform at the state and territory level
  • Examining opportunities to streamline the public funding streams for infrastructure, to deliver greater efficiency and reduce overlap
  • Increased investment in planning and project development work to bring forward business cases for the projects now listed on the Infrastructure Priority List
  • Working to protect transport corridors and precincts for the future
  • Exposure of public transport services to contestable supply through franchising to drive better outcomes for users
  • Making Australian government funding contingent on agreeing to post-completion reviews of major infrastructure projects
  • A greater focus on metropolitan rail in our capital cities by working with state governments to develop urban rail plans for Australia's five major cities, and
  • A commitment to work with State and Territory governments on policies to make better use of existing infrastructure.

We are particularly pleased to see the Government commit to progressing two key issues: road market reform; and developing a National Freight and Supply Chain Strategy.

As we outlined in the Plan, it is clear that the current funding model to build and maintain Australian roads is broken—it is inefficient, unsustainable and unfair. To deliver the major projects our nation needs for the future there must be a clearer funding base.

We advocated in the Plan for current fuel excise and vehicle registration fees to be abolished and road users to only be charged for what they use.

It's therefore pleasing to see the Government publicly commit to a study on the potential improvements and impacts of road market reform. Infrastructure Australia sees real public benefit in moving to a fairer approach to road charging, where the revenue raised from road users is all put back into funding transport infrastructure.

Changing how we pay for roads will not be easy, so deep public consultation is essential. However, road-funding reform can deliver secure, sustainable funding for our roads—and better services for users.

The Australian Infrastructure Plan also highlighted the need for a National Freight and Supply Chain Strategy that defines nationally significant freight corridors and precincts. Done well, this Strategy will identify the network constraints and gaps, and outline the investments and policies needed to overcome these challenges.

As pointed out in the Plan, we want to see a truly nation-wide effort on this task, to ensure Australia's trade hubs and logistics networks are properly equipped to meet future demand.

The Government's response to the Plan is welcome. And we will continue to provide robust, independent advice on how the reforms and projects recommended in the Plan should be progressed.

Our focus is on action that delivers long-term outcomes for infrastructure users—ensuring modern and affordable energy, telecommunications, water and transport services for all Australians.

Importantly, our work on business case assessments and adding more projects to the Infrastructure Priority List is only just beginning. We have assessed 14 business cases this year and have another 18 already under assessment for next year.

It's all part of creating and publishing Australia's much-needed pipeline of nationally significant and costed infrastructure projects.

Infrastructure Australia will also continue to refine our business case assessment framework in collaboration with our federal, state and territory colleagues to ensure that it remains fit for purpose and best practice.

2017 will be an exciting year for Infrastructure Australia as we progress our policy and research program to support the implementation of the Plan's diverse recommendations, and continually strive to improve project selection through our rigorous assessment framework.

In co-operation with other leaders across the public and private sectors we'll keep working to support better infrastructure decision-making and delivery in Australia.

The Government's response to the 15 year Plan can be read here.

The Plan and Infrastructure Priority List can both be downloaded here.

Thank you for your continued support.

Mark Birrell, Chairman