Home' Future Building: The Australian Infrastructure Review : Volume 8 Number 1 Contents futurebuilding 21
Restoring Australia’s productivity
growth – panel discussion
MC: It would be really great to get bipartisan agreement on
the fact that freight is strategically important to the economy.
This includes having conversations with the public to broaden
public awareness of the importance of freight, supply chains
and ports to the national economy. And flowing from that,
the regulation needs to support that objective – everything
from planning systems through to funding mechanisms and
BL: So, really establishing a freight market is what you’re
MC: Absolutely. I also think that they should agree to fund the
Port Botany rail line duplication. Those would be my two picks.
BL: Stephanie, any points of agreement and any pet
projects that connect to your house? They’re all welcome.
SF: Australia being open for business should be bipartisan.
Politicians on both sides regularly say it in passing, but I would
like to see it top of the agenda. Australians should be very
confident about our future, but we should not be complacent.
The second thing I’d like to see bipartisan agreement on is
around clarity with FDI coming into Australia. Most foreign investors
are aware that there’ll be some investments that are not open to
them and others that are, but they need clarity around what these
are. They don’t want to be spending a lot of time preparing for
certain projects and finding out later that they cannot invest. So, I
think we need early clarification around what’s on the agenda and
what’s off the agenda, that needs to be bipartisan.
BL: Any pet projects?
SF: No pet projects in particular.
BL: Peter, you hate pet projects, so what would you like to
see agreement on?
PH: No pet projects is number one. Firstly, I hope we can
move away from the culture where a project is labelled as a ‘bad
project’ just because the other side of politics came up with it.
It’s a bad project if it’s poorly planned, allocation is bad, there’s
no pricing structure involved, and there is the extraction of large
amounts of rent from one user group to another user group
without any compensating benefits. There are a thousand
reasons a project could be labelled a ‘bad project’, but it’s not
because it came up under one political party or the other.
The National Broadband Network (NBN) is an example of
this. Its label as a good or bad project is entirely dependent
on the politics of the person. In New York, Verizon built an
equivalent of the NBN around New York. It wasn’t controversial,
and in three years it was finished. New Zealand has done
its own version of the NBN, and it wasn’t controversial. It did
involve government intervention, but nevertheless it’s a good
outcome. The idea that we would invest heavily in fibre for the
purpose of data movement to support an economy... of course
we would do that, but the question is how, and how effectively
can we plan to do it and manage the right forms of criticism?
However, the debate around the NBN is labelled as good or bad
depending on your politics.
The second area is road pricing, and it doesn’t mean you
get the sharp stick out ...
BL: There’s going to be a flashing sign down here that says,
‘Save Road Pricing’.
PH: At a recent forum at the University of Sydney, I surprised
a group of academics by telling them, ‘I don’t think congestion
pricing is the right model for you when you talk about road
pricing’. Do not think the first step for road pricing is congestion
pricing. Congestion pricing is not a bad thing, but the greatest
benefits that will come from an effective road pricing structure
are the shifts in the allocation. That is, that you fund projects that
users are willing to pay for. This is a statement of the bleeding
obvious, but it is not currently happening – users don’t get a say.
The road pricing structure in our 2014 inquiry into Public
Infrastructure was one that involved users having a direct say in
infrastructure. You might ask, ‘Well, how did that occur?’
And we’ve said, ‘Well it’s pretty simple – we’ve got this thing
called the National Roads and Motorists Association’. They’re
quite capable entities and they could be involved in the decision-
making, but so could a heavy-vehicle users group. We increasingly
expect them to pay for road use, so it seems logical to involve
them first in the allocation process. Our 2014 report found that 70
or 80 per cent of the potential benefits of a different pricing system
lie in the selection of the right projects. It’s about allocation. We
know that this reform will come about because Treasurers need
the revenue, but road pricing reform is about allocation. Getting
allocation right will mean we get the right selection of projects.
Peter Harris AO
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