Infrastructure Australia plan seen as a start down reform path


Political and industry players see more work to be done on the detail

Infrastructure Australia plan seen as a start down reform path
Paul Fletcher expects vigorous debate.

 

Initial responses to the Australian Infrastructure Plan see it as good start with valuable messages but with much still to do.

The Plan "provides a major contribution to strategic, long term thinking about Australia's infrastructure needs and how that can be best met", federal major projects minister Paul Fletcher says.

"We expect the [Plan] will spark vigorous debate about our national policy settings including how we get the best from our existing infrastructure, and how to make wise decisions about potential new infrastructure.

"The Turnbull Government will carefully consider the recommendations, and have regard to public debate, before announcing our response to them in due course."

For the Australian Trucking Association (ATA), the bone of contention centres on road charging and it reiterates its call for overcharging to be fixed before reform here progresses.

"User charges should reflect the cost of providing infrastructure," ATA CEO Christopher Melham says.

"And as the Productivity Commission has pointed out, complex reforms like road pricing require an institutional base accepted by all parties.

"Governments will struggle to gain public and industry support for any new road charging system unless they first show they have the capacity to fix the known problems with the charging system we have now."

"Secondly, the government will need to do extensive work laying the groundwork for this reform, such as developing an independent economic regulator for road prices, however they are to be imposed.

"At present, the NTC can only make recommendations about the road user charge and heavy vehicle registration charges.

"Establishing an independent economic regulator, such as the Access and Pricing Regulator proposed in the Harper Competition Review last year, would help ensure that governments cannot ignore pricing decisions in the future."

The ATA wants the federal government to focus on:

  • developing the road fund concept so it could be implemented in conjunction with any new pricing system
  • reducing the cash flow gap caused by the interaction between road pricing and the existing fuel tax credits system.

"The Department of Infrastructure has done a lot of work providing the basic underpinnings for this system, including the development of a national asset register and road service standards," Melham says.

"They’ve done a very good job, but there’s still more to go."

The introduction of direct road pricing, including the compliance cost of fitting GPS monitoring equipment to Australia’s 427,000 heavy rigid and articulated trucks and the need for better road planning and decision-making, remain of central concern to the national industry body.

"In our view, the government needs to fund considerable development work on these and other issues before the trucking industry can make final decisions on the merits of the reform standards," Melham says.

For the Australian Logistics Council (ALC), the plan’s focus on efficiency and its support for aspects it has call for action on were heartening.

However, its value now hinges on full and correct implementation and the organisation along with developer lobby Infrastructure Partnerships Australia (IPS) called for a reaction devoid of base political motives.

"IA’s plan paves the way for improved freight efficiency – the challenge before all governments is to work in the national interest and implement its recommendations in a timely and coordinated fashion," ALC MD Michael Kilgariff says.

"If we can squeeze just a 1% percent improvement in our supply chains, the economic benefits are significant, with research showing it would boost national GDP by $2 billion.

The ALC was particularly pleased about the recommendation for a National Freight and Supply Chain Strategy, "which acknowledges the importance of putting in place a long term plan incorporating the various, interlinked components of our national and international supply chains".

"IA’s recommendation for governments to work with the private sector to map nationally significant supply chains and their access to supporting infrastructure and gateways, is sensible long-term thinking Kilgariff says. 

"As part of this work, we would like to see Infrastructure Australia audit the existing national freight and port strategies to identify priority areas for action, such as the establishment of a national body to progress freight reforms. 

"Similarly, its proposal for work to be undertaken to evaluate the adequacy of the institutional frameworks supporting freight networks, and to recommend reforms and investments that would move freight more efficiently, is a reform that could yield significant efficiency benefits."

The risk of reform being stymied for political ends was a central concern for the IPA.

"It would be a bad outcome to see key recommendations in the report immediately politicised or ruled out," IPA CEO Bendan Lyon says.

"If key long-term recommendations like transport pricing reform become politicised, it will be to the community’s own detriment.

"The Government and Opposition should both commit to providing a formal response to the Australian Infrastructure Plan, outlining their response across the report’s key recommendations.

"A formal response would identify where political consensus already exists, meaning we could get on with some reforms quickly while harder and longer-term reforms are debated and developed.

"After standing still for 15 years, Australians know that congestion, transport and wider infrastructure problems will not fix themselves.

"This report is firmly supported by the infrastructure sector and we look forward to the government and opposition response, in due course."

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