Home' Future Building: The Australian Infrastructure Review : Volume 6 Number 1 Contents futurebuilding 7
Volume 6 Number 1
Politics, projects and people -- panel discussion
accepted a view -- which has been a businesslike
view that all of us had been putting to them when
they were in Opposition -- that infrastructure is too
important to treat capriciously, sitting around and
just saying, 'This will be a good project to do,' and
then locking it in. No business does that with its
capital program. A capital program in business is
heavily analysed, and nancing and productivity
gains are analysed, as is the impact on the business
in the long term. That has been missing, to a very
large extent, from the infrastructure debate in
Australia. Infrastructure Australia was a start. It
was a bit stillborn, and I'm hopeful that it will now
improve; although, I'm worried by the idea that
we'll exclude projects, and that governments will
decide what they're going to do without putting it to
You've got to have a process that is reputable and
transparent, and we're going well towards that in
New South Wales. You've got to have a project and
a public process, put it to your opposition, and then
have a debate on it; for example, the cancellation of a
project in Victoria was a real disaster in public policy
terms. Projects shouldn't get to that stage. At the
moment, it's a problem: governments, politicians and
their staff increasingly think in billions. They ought to
get back to the millions. It's not their billions; it's our
billions. They've aggregated it up too far.
Many of the projects that are going to provide the
most bene t to the states are not the totemic projects.
They're about cleaning up the traf c congestion and
road pricing. It doesn't take huge amounts of capital,
but it takes huge amounts of political capital. You've
got to put it in context. You need an infrastructure
view that is not only about very big projects, but that
is also about the public policy framework, and what
is going to give you the best bang for your buck.
We need to recognise that politicians have to
spread the joy, to some extent. They have to spread to
the constituencies, but they can still have a sound and
rational process. Business takes it from the analysis
rst, and then announces the project. Politics in
Australia is announcing the project, and then tting
the analysis to justify the project.
It's also, unfortunately, whatever the leader at the
time says to a journalist or an editor, and that then
gets locked in. They should stop talking so much, and
actually do a bit more doing.
BL: I want to come back to this point around
sovereign risk and transparency -- but Tony, I
wanted to ask you particularly: what do you think
it is that will spark some of the big breakthroughs?
There is good understanding of what we need to
do, but it's dif cult.
TS: I really worry that, short of a big crisis,
Australia nds it very hard to respond. If you go back
to what Martin talked about -- in the 1980s we were
heading for a crisis, but the Government could see it
coming and actually acted. But does Australia need
to get itself in deep doo-doo before it responds?
The economy is treading water, and again, as
Martin says, we are in a massive transition. It was
masked by the investment in the resources sector --
that's nished. We are really in transition now. Lower-
paid white-collar jobs are disappearing by the minute.
What are we going to be, what are we going to do?
The economy is treading water, and terms of trade
have turned against us far faster than the Commission
of Audit predicted. Growth has dropped far, far below
even the level that we predicted. The structural scal
de cit is very real. It's not going away -- it's getting
bigger by the day. Do we need to get ourselves into
a complete crisis, or can we get some incremental
reform over time to get this economy going, and set
it up for the future? That's the issue and, again, taking
Martin's point, that requires leadership.
BL: Martin, you were the president of the ACTU
during a lot of the modernisation of infrastructure
markets and the economy. What was different back
in the 1980s and 1990s? Was it an understanding of
the need, or just leadership?
Above: Tony Shepherd
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