Big business lobby’s ‘prosperity’ action plan supports COAG’s Heavy Vehicle Charging and Investment scheme
July 31, 2013
At a time when both major political parties want a swift return to budget surplus, the Business Council of Australia (BCA) has counselled borrowing for future infrastructure need and ensuring “full cost recovery” from users.
In releasing its Economic Action Plan for Enduring Prosperity document today, the BCA also backed implicitly Opposition transport spokesman Warren Truss’s plans for Infrastructure Australia to ensure there are 15-year infrastructure project pipelines with input from the states, along with the Australian Logistics Council’s “capital recycling” prescription to help fund construction.
The BCA’s paper supports full cost recovery, especially for transport infrastructure, saying that “there is still a need to remove barriers to efficient full cost pricing” and “user-charge arrangements should be promoted wherever possible”.
Action point 3.2 states that governments should: “Prioritise the implementation of COAG’s Heavy Vehicle Charging and Investment scheme and work with the states to apply the principles in that scheme more widely toward the development of a nationally consistent approach to road pricing and road funding.”
In dealing with the apparent contradiction of government borrowing at a time when the BCA demands the budget deficit is “brought under control”, BCA President Tony Shepherd says: “There is such a thing as good debt, and there is such a thing as bad debt. Bad debt is borrowing money to meet recurring expenditure – a bad habit for a government.
”Good debt is borrowing for a needed piece of economic infrastructure which has a high cost-benefit that will add to the productivity and the growth of the country.”
Amongst other infrastructure-related ideas, the BCA advises:
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federal infrastructure spending should be allocated to the Building Australia Fund in the first instance and then be allocated only to projects independently assessed as a high priority by Infrastructure Australia
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funding sources for infrastructure should be broadened by: recycled capital from asset sales by governments; user charges; greater application of user pays in the transport sector; allocating a minimum amount of federal expenditures to infrastructure investment annually; and considering federal borrowing within the AAA credit rating that is ring-fenced for high-quality infrastructure projects
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state governments should introduce an effective process for considering unsolicited proposals from the private sector, based on the New South Wales model.governments should dispose of assets when the private sector is able to own and operate them. Other assets should be sold.
Shepherd also touched on the leveraging of private investment to fund projects, which was another Truss theme.