Tips & Advice

Giving an ?F? about infrastructure

Last month, Infrastructure Australia (IA), the statutory body which advises the Federal Government on priorities for the nation’s infrastructure, delivered its vision and roadmap for infrastructure reform for the next 15 years. It comprised 78 recommendations and identified 93 projects and initiatives on an Infrastructure Priority List (IPL) that would improve transport and port infrastructure, telecommunications and the electricity sector.

IA chairman Mark Birrell said that the completion of these major reforms would make the average Australian household $3000 better off each year and would assist businesses seeking to capitalise on overseas markets. He described the IPL as “a platform for better infrastructure decisions” that would provide “rigorous, independent advice to governments and the public on the infrastructure investments Australia needs”. The list would be updated as other projects were proposed.

Unfortunately, as optimistic as IA’s vision is, the greatest impediments to Australia’s infrastructure planning remain our state and federal politicians and a sceptical business community. Megan Motto, the chief executive of Consult Australia, which represents consultancies in the built environment sector, said that the success of IA’s plan hinged on “implementation and improvement”. 

“Government must realise that in order for this to happen there must be a compact between tiers of government and industry players to accept the need for significant change and work collaboratively to institute lasting reform,” Motto said.

The indications are that the business community will not leap aboard quickly. While Boral CEO Mike Kane, in announcing Boral’s first-half profits for 2015-16, predicts that 2017 will see a new wave of road making projects, Mark Adamson, CEO of New Zealand’s Fletcher Building, is pessimistic. Despite Fletcher’s sale of its Rocla Quarry Products business to Hanson, Adamson has argued that the state of Australian politics – with five changes of Prime Minister in as many years and the Victorian Government’s cancellation of the East-West Link contract – has dented his confidence that projects will ever be delivered.

“I’m not building my strategy in Australia on that infrastructure spend happening,” he recently told Fairfax Media. Adamson has previously scorned the Federal Government for being “all talk” on plans for a $120 billion project pipeline of new airports, roads and rail – and given the progress in infrastructure activity since 2011, you can’t blame him.

If you look closely at the IPL, it is divided into: (a) projects under delivery, (b) current business cases under assessment and (c) status of previously assessed projects. For (a), there are a paltry five projects in two states (New South Wales and Queensland) under delivery. For (b), there are only nine proposed projects across four states that IA is assessing. For (c), only one-third of more than 30 previously assessed projects are under construction. Numerous projects across Australia under (c) are being resubmitted to IA after languishing in limbo over the last three years.

A few years ago, Engineers Australia released an infrastructure report card, rating the quality of Australia’s infrastructure as an overgenerous “C+”. If we’re to treat the IPL as another report card, then surely we have to grade the quality of our infrastructure at present as an “F” – an abysmal failure, and once again the blame has to be sheeted squarely at our federal and state governments.

If 2017, as Boral has forecast, is to the be “the year for construction materials”, then there needs to be significant improvement in attitude amongst our jurisdictions and the business community. Partisan politics, poor national/state relations, red tape and myopia in the construction industry are clearly holding this country back. That’s terrible news for the quarry industry downstream.

Consult Australia’s Motto is correct. There needs to be compact between all tiers of government, the different political parties and business players, including the quarry industry, to set this right. Otherwise, in 2020, which is when the so-called $120 billion pipeline of projects is set to finish, we’ll be no closer than we are now to resolving the farce that Australian infrastructure has become.

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