JOHN AUSTEN. Is there a simple way of dealing with national infrastructure issues? Yes, but it is not a simple matter of adopting Infrastructure Australia’s ‘project list’.

The argument

Recent pieces offered a seemingly simple way forward to deal with national infrastructure issues.

It should be simple. All parties should commit to (Infrastructure Australia’s) “project” list – in part or in full – and then stop spending. These “projects” have been properly assessed and found to be worth doing, and specifically worth doing by the federal government because they have some national significance. [1]

 

Indeed, governments should limit project spending to proposals that have been properly and publicly assessed. We are entitled to know what is being done in our name and why.

So too, the assessments should be independent. Of course it is more important that these are independent of – do not gain from – the infrastructure industry.

However, beyond this the answers aren’t as simple of committing to a list drawn up by advisers such as Infrastructure Australia.

There are problems with limiting (worse, forcing) government spending to projects recommended by advisers. Among these problems is the transfer of power from elected representatives to unelected advisers with possible advisory incompetence. [2]

Further, the efficacy of the approach depends on 3 conditions:

  1. a balanced set of possibilities from which recommended projects are drawn;
  2. appropriate tests to identify projects to be recommended;
  3. government funding being decisive.

At a national level none of these conditions have been met, are being met, or are likely to be met with current attitudes.

  1. A comprehensive set of possibilities?

The national set of project possibilities drafted by Infrastructure Australia is incomplete. It arguably is also unbalanced towards capital cities and car use of roads, a feature not corrected by curios such as ‘opportunities for growth’ being identified only in Tasmania.

  1. Appropriate tests?

Infrastructure Australia has made a significant contribution here but concerns exist.

One concern is reluctance to publicly address allegations about misleading entreaties such as in the case of the former East-West link.  Trust is not built by considering projects which are under a cloud of claims like ‘fraud on an epic scale’.

Another type of concern is evidenced by the Perth Freight Link, for which Infrastructure Australia and a (unanimous) Senate Committee took opposite views. That case involved a remarkable role reversal: the politicians recommended withdrawal of funding. Who should the schoolkids in Liverpool library believe – a Senate Committee or Infrastructure Australia?

  1. Decisive in meeting infrastructure needs?

The amounts promised in the election campaign, $6billion or $7billion for major projects, cannot decisively deal with infrastructure needs. Such amounts, indeed multiples of them, are trivial in comparison with the stock of infrastructure assets. Moreover there are many infrastructure needs best filled by user charging rather than public monies. Urban motorways are an example.

In any event policy is more important than projects. Needs will not be met while the Commonwealth and national transport policy remain strangers as they do today.

A better approach

Would fixing the above problems deal with transport infrastructure issues?

Following the published advice could make a difference at the state level because: politicians are proximate to the full electorate; there is responsibility for infrastructure; problems like completeness of a list are readily fixed.

I doubt whether this approach would be effective nationally. Something different is needed. A start is to re-examine prevailing assumptions about the Commonwealth.

Despite prevailing views, the Commonwealth is a minor land transport infrastructure player. The states spend far more because they have responsibility.

Another incorrect prevailing assumption is that the Commonwealth is an upscaled-state-government or a donor unburdened by responsibility for anything it funds.

No wonder many think the Commonwealth runs a nation-wide ever-increasing pork barrel; they see so many others asking for and being given gifts for anything. This is not limited to transport; football stadiums, tennis courts etc. are subject to federal largesse. Attempts to stop such nonsense by advisers making lists of recommended gifts would be seen for what they are; bureaucratic empire building.

These damaging assumptions should have been discarded two years ago. The charade of Commonwealth as super-state-without-responsibility should have come to an end with the High Court’s Williams (No. 2) decision in mid-2014. [3]

Up to that time many thought the Government could fund anything it liked. That spending on projects is fine provided they were ‘nationally significant’, benefit the economy or involve cooperation with the states. The High Court rejected all of those ideas.

Most commentators and advisers appear unaware of the decision, less still of it rendering many federal spending promises and ‘solutions’ inappropriate.

In failing to draw attention to the illegitimacy (as distinct from economic sub-optimality) of the Commonwealth as a big-pork-barrel, they bear some blame for what we witnessed in the last election campaign.

There is no point in arguing for bureaucratic processes to improve ‘infrastructure governance’ while giving federal politicians a leave pass to ignore the foundation of Australia’s system of governance; the Constitution.

Today’s infrastructure issues, including community cynicism about projects, relate to responsibility and legitimacy not (just) economics. The way to start dealing with this at a national level is to align expectations of the Commonwealth with the Constitution.

The Commonwealth should own what it funds, the projects and their assets, to align power with responsibility. If the Commonwealth does not want responsibility it should not get involved. If nothing else this would make the states and advisers more careful about what they put forward.

Commonwealth involvement in matters like urban transport projects should, as envisaged by the Constitution, be decided by Parliament not just the Government with separate legislation for each project. The Committee system; formal submissions, evidence, questioning of proponents, publication of all material should be used. Infrastructure Australia, project assessments etc. should fit into this process.

In any event, a warning is in order: the Commonwealth should avoid mega transport proposals in big cities for the present. The proposals drummed up under current arrangements can involve byzantine sub-agendas below the Commonwealth’s dignity, undermine necessary policies like road pricing or interoperability, or deny realities such as road use being heavily subsidised today.

The firm ground for the Commonwealth is to limit project funding to assets it wants to own, matters within its Government’s powers and second tier cities or exploratory matters such as rail options in western Sydney. The Commonwealth should insist on an ‘as if there was road pricing’ test for all projects.

Calls to ‘just follow the advisers’, perhaps reasonable at state level, are way short of what is needed for infrastructure nationally.

Notes

[1] https://theconversation.com/governments-still-choosing-the-wrong-transport-projects-report-57114 http://www.smh.com.au/business/the-economy/election-2016-following-the-clues-to-find-australias-missing-infrastructure-20160701-gpw7k5.html

[2] A better mousetrap. http://johnmenadue.com/blog/?p=6223

[3] Discussed in urbane transport. http://johnmenadue.com/blog/?p=6688

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2 Responses to JOHN AUSTEN. Is there a simple way of dealing with national infrastructure issues? Yes, but it is not a simple matter of adopting Infrastructure Australia’s ‘project list’.

  1. Marion Terrill says:

    Thanks, John, for an interesting piece.
    It’s true that the Commonwealth’s infrastructure decisions must be made on the basis of some combination of technical advice and political judgement. The establishment of infrastructure advisory bodies around the country over recent years is a move away from entirely political decision-making. While not perfect, this change is an improvement. However, entirely technocratic decision-making is probably not what the community wants.
    A better solution would be for elected representatives to make decisions only after the technical assessment has been completed and made public. Instead of decision-making behind closed doors, the public and the media can see and debate the relative merits of different proposals.

    • john austen says:

      Ms Terrill; thanks. my main point is about legitimacy. transparency adds to legitimacy, as does proper advice from independent parties, so this is to be encouraged. all known pre 2014
      post 2014 there is an additional legitimacy issue for the Commonwealth; conformance with the Constitution. a particular issue for Governments, but still relevant to Parliament. if the Constitution is ignored, in spirit if not in black letter, what expectation should anyone have about legitimacy? Williams throws this into sharp relief by contradicting assumptions about what the Commonwealth Government can do eg. what it should not attempt to do.
      consistent with this ‘theory’ the practice of Commonwealth support for state projects has publicly raised some tricky issues: the taking of evidence/investigatory powers? penalties for attempts to mislead? Parliament, not Government, making decisions? Commonwealth Constitutional priorities; defence, trade and commerce, rail standardisation etc all but absent from recent ‘national plans’; lack of submissions from Commonwealth Departments to advisers.
      Williams is recognised as a landmark; its implications for infrastructure are worth looking at.
      regards.

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