The Grattan Institute, an independent “think tank” that focuses on Australian public policy, recently released its Road to riches: Better transport spending report, which claimed “too much money has been spent on the wrong projects in the wrong places”.
The report argued that governments had largely bypassed economically important infrastructure investment opportunities in Australia’s largest cities in favour of projects “in states and electorates where federal elections are won and lost”.
“Too often, politics comes ahead of the public interest,” the report read. “Too much has been spent on highways that are not especially important to the economy, but are popular with local voters. Decisions on particular projects are dubious or made on the basis of weak or undisclosed business cases.”
The idea that politics heavily influence infrastructure project planning is not a new concern, and several states have established independent statutory bodies to address the issue. At a national level, Infrastructure Australia (IA) has been appointed to objectively advise all levels of government, asset owners and investors on how best to develop the nation’s infrastructure.
However, the Grattan Institute indicated that although positive, the establishment of these independent agencies had limited impact.
“Oversight mechanisms aren’t working,” a Grattan Institute media release stated. “Since 2012, over half of Commonwealth infrastructure spending has gone to projects where IA has not published an evaluation. States have spent billions more with little transparency.”
Grattan Institute transport program director Marion Terrill, who authored the report, added, “There isn’t enough publicly available information on potential projects, so the public can’t hold politicians to account or be confident that funds are spent wisely.”
The report recommended a three-step approach to improve government transport infrastructure spending:
- Governments table a like-for-like evaluation of a project’s net benefit in parliament that has been conducted by an independent body.
- Once determined, governments aim to build all projects that have been allocated funding.
- Finally, federal project funding should be “disentangled” from state entitlements, so that the Federal Government only invests in infrastructure important to the national economy, regardless of the location.
Report ‘biased, city-centric’
Victorian MP Sarah Henderson, the federal member for Corangamite, said the report was “biased and city-centric”.
Henderson campaigned to duplicate Victoria’s Princes Highway between Geelong and Colac in the lead-up to the 2013 federal election. The Grattan Institute’s report had criticised this project among others, finding that it was “not of national significance”, with a return on investment of just eight cents per dollar spent.
Henderson argued that regional communities were just as deserving of improved infrastructure as any other region, adding that the Grattan Institute had failed to thoroughly consider all the economic benefits afforded by the highway’s upgrade.
She said that far from being a “road to nowhere”, as described in a newspaper headline from The Age, the Princes Highway duplication was “vital infrastructure” because it enabled transport of dairy, grain and timber from southwest Victoria.
Further to this, Henderson said the duplication provided an alternative route to the Great Ocean Road, which she described as the “centrepiece” of Victoria’s $2.1 billion tourism industry, supporting 10,000 local jobs.
Henderson also contended it was untrue that IA had not assessed the merits of the Princes Highway duplication. She quoted an IA assessment brief dated 7 May, 2015, which stated: “The proponent has noted a number of unquantified benefits, including economic growth due to improved access to the Port of Portland and Geelong, tourist traffic increase through the Great Ocean Road and agriculture productivity growth including milk production.”
The Grattan Institute’s report and Henderson’s response coincided with the Federal Government’s decision last week to reallocate $1.5 billion in funds originally earmarked for the cancelled East-West Link road project to other Melbourne-based transport projects. These included the Monash Freeway upgrade, the Murray Basin rail project and the Melbourne Metro rail project.
On Melbourne radio, Prime Minister Malcolm Turnbull also reiterated the Federal Government’s longstanding position that it was prepared to allocate an additional $3 billion to the East-West Link in future – should the Victorian Government elect to revive it.
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