Infrastructure Australia warns productivity is in decline because of the frustratingly slow pace of planning and reform
July 5, 2011
Infrastructure Australia (IA) has warned productivity is in decline due to the frustratingly slow pace of planning and reform
IA Chairman Sir Rod Eddington says productivity has abated as a direct result of infrastructure shortfalls – time lost in travel, delays at ports and lost production due to water restrictions.
“The Council of Australian Governments’ (COAG) annual report emphasises the urgent need to reform the financing of major infrastructure projects across Australia,” Sir Eddington says.
Infrastructure Australia’s report, Communicating the Imperative for Action released in June reiterates the point.
“As the rate of productivity has slowed over the past decade to a point below the average of OECD nations, the need for policy reform has grown,” Sir Eddington says.
“Infrastructure that is properly planned and financed will improve productivity, economic development and help to preserve a sustainable future for all Australians.”
To this end, Eddington says IA has recently set up an Infrastructure Financing Working Group to identify new ways of financing infrastructure.
The group includes experts from the public and private sectors and will consider ways to encourage superannuation funds to invest in infrastructure and update guidelines on public-private partnerships, particularly in the area of demand risk.
“The working group will also investigate strategies to recycle government assets to fund investment in new infrastructure and finance models such as land value capture,” Eddington says.
Eddington says adds a key focus for Infrastructure Australia over the next four years will be financing reform – developing practical ways to secure additional private funds for investment in infrastructure.
“Action is needed to reform the way Governments choose the right projects, finance those projects, and operate and maintain them,” he says.
“Governments must also improve the planning of major infrastructure projects and foster use of the current networks more productively by demand management and pricing mechanisms.
Eddington believes the debate concentrating on individual projects is unproductive.
“We need to focus on policy development and systemic issues such as tax rates and charging, and levels of service,” he says.
“All governments need to communicate the imperative for action to their constituents and get on with the job.
In the future, Eddington says IA will produce an expanded infrastructure pipeline emphasising projects that could be privately funded, and projects in regional Australia.
“Infrastructure Australia is working with the new State Governments in NSW and Victoria regarding any changes to their State’s infrastructure priorities,” he says.
IA has also released the project assessments and working appraisals of cost benefit analyses, for Threshold and Ready to Proceed projects, prepared by the National Infrastructure Coordinator.