The Australian Government today tabled the Productivity Commission’s Final Inquiry Report into Public Infrastructure that was provided to Government on 27 May 2014.
The Treasurer asked the Productivity Commission to undertake a comprehensive review of public infrastructure in November last year, with terms of reference that included identifying ways to reduce infrastructure costs and address barriers to private sector financing.
Improving the financing, governance and delivery of new infrastructure and the efficiency of how we use existing infrastructure in Australia is critical for boosting our productivity and economic growth.
The Commission’s inquiry shows that the system left by Labor is broken and in serious need of reform with a number of issues specifically identified including:
- the significant barriers to private sector investment;
- the need for more efficient project selection, procurement and prioritisation;
- development of more robust governance and institutional arrangements;
- improved mechanisms to fund and finance infrastructure projects; and
- benchmarking of infrastructure project costs.
The report singles out Labor’s flawed National Broadband Network as the most significant example of a project that was poor value for money, proceeding without a thorough cost benefit analysis or proper consideration of the best outcome for taxpayers.
The Australian Government has already introduced a number of new measures to fix Labor’s mess and improve the delivery of infrastructure.
These include: the $5 billion Asset Recycling Initiative; re-introducing the indexation of fuel excise to provide a stable, secure source of funding for road infrastructure; a concessional loan for WestConnex; and seeking the first ever private contribution for a roads project in Western Australia.
The majority of reforms recommended by the Commission relate directly to state and territory governments, so the Australian Government will now consult with them over the next few months before it releases its response.
Assistant Minister for Infrastructure and Regional Development Jamie Briggs will lead discussions with the states and territories to drive further reforms to improve infrastructure planning, funding and delivery.
The report clearly shows the importance of reforms already being implemented by federal, state and territory governments. It also highlights that more work is needed to improve how we prioritise and pay for major infrastructure.
The Government looks forward to working with both the states and territories and industry over the next few months to deliver key reforms that ensure we are building more for less and more quickly.
This is even more important now the Australian Government is investing a record $50 billion in world class infrastructure to grow our economy and create thousands of new jobs.
The Government is leveraging a record $125 billion of public and private investment in infrastructure over the next decade, so it’s critical we get the reforms in place now to capitalise on the economic benefits these projects will deliver.
Further information about the PC inquiry, including a copy of the Final Report, can be found on the Productivity Commission’s website.