Why should we get excited by the recent release of Infrastructure Australia’s 15-year Infrastructure Plan? The 200 page report, Australian Infrastructure Plan: Priorities and reforms for our nation’s future contains all the right words in support of its Infrastructure Priority List of 93 projects and initiatives and 78 recommendations for reform.
OK, maybe we’re not going to get excited by the report but at the very least the moment should be seized upon as a time when we put a stake in the ground to get everyone with an interest in infrastructure provision and maintenance collectively more focused.
Everyone knows that infrastructure should be there for the greater good, not a thing to be played around with as a political football. The concept of an agreed priority list should help transcend the political temptation. Public scrutiny should be high for those wanting to drift off course from the agreed priorities. For too long we have lamented upon our infrastructure lag, perhaps much of the opportunity siphoned off for political expediency.
In costing completion of major infrastructure market reforms to the benefit of the average Australian household by up to $3,000 per year by 2040, it’s only perfectly sensible that Infrastructure Australia Chairman, Mark Birrell notes that we need to act now on reform. In today’s or tomorrow’s dollars, these are substantial savings that can’t be ignored.
It is interesting to note the calculated savings projected above in the context of a recommendation that many within CCF and more broadly have been shouting from the rooftops for a long time. Recommendation 5.8 says that “The Australian Government should undertake a review of its capacity to use increased public borrowing to support an expanded economic infrastructure investment program.”
The recommendation goes on to propose that a smarter approach to investing in economic infrastructure is through the use of publicly funded debt provided there is sound analysis of investments, good execution in delivery and a definitive contribution can be made to the economy. The recommendation importantly notes “Public debt can also provide intergenerational equity around infrastructure investments by distributing costs between current and future taxpayers who will benefit from the provision of enhanced infrastructure.”
It all therefore makes sense that those in receipt of the savings in 2040 and beyond share in the investment of those savings. I know there will be frustration for many colleagues who have been advocating greater borrowing and who will be saying it’s obvious but at least it is in a report that will be hopefully taken seriously as the future roadmap and indeed the right road.
Getting the Australian public weaned off of the message that all debt is bad is also an important task in the pursuit of infrastructure investment. This wasn’t missed through the report where “the reporting of debt under a more transparent structure, at all levels of government…” should be subject to an Australian Treasury viability evaluation “to allow for greater clarity and support increased investment in productive infrastructure.”
The report goes on to suggest that providing greater clarity around those infrastructure assets being public debt financed “will increase public awareness of the valuable role borrowing can play in meeting Australia’s infrastructure needs.” It seems odd that we have to spell this out given most people understand the concept of borrowing to invest but seem to get either frightened or suspicious when government’s want to head down this path.
What in fact frightens governments about treading the debt path? Whatever it is that does frighten them will be hopefully be substantially removed by the wording in this report so that our economic potential can be fulfilled in a far more urgent timeframe than the one we have recently been travelling.
Recommendation 10.3 of the Plan deals with the country’s capacity to deliver on our infrastructure need in a timely way. Specifically, the recommendation talks about the skill base in Australia and the need to develop an infrastructure skills plan. Whilst that all sounds good I think large parts of industry would be concerned about just what that means, how long will it take and will it get in the way of the doing.
There was no shortage of commentary soon after the release of the Infrastructure Plan warning of the current dearth of skills that would stop us from getting on with the job of construction. Strong oversight of the recommendations, if accepted, will be needed to stop progress on delivery of infrastructure being choked by bureaucracy and more studies.
The Australian Infrastructure Plan has been well received across business and industry with the fervent hope that it is the catalyst for a more collegiate and fast-tracked approach to make Australia productive and deliver greater prosperity to all. The Plan has been some time in the making and for the national good its progress, when implemented, should be subject to constant public reporting.
Whilst not the domain of Infrastructure Australia, sitting alongside the report should be how implementation of the Plan can contribute to local industry development. What we don’t need is to lose the opportunity in what amounts to a big oncoming infrastructure workload for smaller and medium sized business to be pushed aside and billions of dollars heading offshore with little or no benefit derived in terms of expertise and future investment.
Fifteen years is not a long time. If we want benefit from this report implementation will need to start now. Mark Birrell said that “some of the ideas will be tough to progress”. We all know that anything we earn is usually hard fought. Maybe we need that fight which will then get us really excited about the Plan.