For an administration that declared that Australia was reopen for business, the fledgling Abbott Government has been more timid and idle than many of its proponents would like.
Perhaps this perception is due to the 40 reviews the government has ordered, from the Commission of Audit into public expenditure through to a Productivity Commission inquiry into public infrastructure.
Regardless of persuasion, incoming governments always resort to reviews that rarely result in meaningful solutions (eg remember the Henry Tax Review?). They also baulk at recommendations for big reforms, picking short term options rather than developing policies with long term benefits.
Sadly, I don?t expect big things of the Productivity Commission inquiry into public infrastructure. The inquiry will consider the cost and finance structures of infrastructure projects in Australia, alternative funding and financing mechanisms and improvements to the decision-making and implementation processes. However, the inquiry?s recommendations will count for little if the government is not serious about infrastructure reform.
Indeed, to counter the nation?s faltering labour market, the government should be desperate to encourage a new wave of infrastructure projects as the mining boom ends and Australia?s traditional manufacturing base declines. Industry also needs to be more cohesive about what it wants in the inquiry process.
Yet before the inquiry has even drafted a report, stakeholders that can most benefit from infrastructure reform are rumbling amongst themselves. The Australian Trucking Association (ATA) and the Heavy Vehicle Charging and Investment Reform (HVCI) disagree on a solution for road infrastructure: an alternative to the Road Users Charge (RUC) system that governs the use of heavy vehicles on our roads.
The ATA is the peak body for the road transport industry, comprising 548,000 heavy vehicles. Cement Concrete Aggregates Australia (CCAA) estimates that the construction materials industry operates two per cent of the total truck fleet.
In its submission, the HVCI, a working group of Federal, State and local government officials, has argued that the RUC system is non-responsive to heavy vehicle users and that its revenues are not being invested in the road network. The group also contends that wide-ranging reforms could improve the heavy vehicle sector?s productivity by as much as $22 billion in net benefits.
Although not stated in its submission, HVCI?s preference is for a mass distance location (MDL) charge model which would require all trucks to install GPS devices so they can be charged for the distances they travel and the roads that they use.
In past submissions to the National Transport Commission and the COAG Road Reform Plan, the CCAA has also voiced its support for a direct link between heavy vehicle pricing and road investment and backed the MDL model for pricing road use. However, CCAA has warned that implementation of the MDL could create enormous overheads for the transport sector and would require protection of commercially sensitive data.
The ATA recently aired its problems with the model. It argued that under MDL, the charges for transporting freight in rural and regional areas could be up to 25 times more than in the city because rural and regional roads are built to lighter standards than most freeways and are therefore prone to more damage. The ATA has also argued that HVCI?s submission underestimates the cost and practicality of rolling out the MDL technology.
With disagreement on one issue (amongst many), the inquiry is already on wobbly ground. If we are to significantly improve our infrastructure in coming years, industry stakeholders and governments at all levels need to show more ticker for reform. Quarries will only benefit from a potential infrastructure boom if all the stakeholders have the resolve to embrace tough solutions that entail costs and some risks.
If our pioneers had lacked the leadership and vision of today?s governments and industry whenever radical, bold ideas were put up, would we have just celebrated our 226th anniversary as a nation?
Damian Christie
Editor