Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 2 Contents 20 futurebuilding Volume 3 Number 2
Sir Rod Eddington AO
begin the discussion about the options, the trade-offs
and the opportunities to make Australia's freight and
passenger transport networks work better.
There are some issues around water, as well.
They are important, and again some of the same
sorts of signals apply.
The creation or completion of markets in
electricity, water and transport are important reforms,
and are fundamental to the productivity debate.
But solving the infrastructure funding challenge
will require us to go further still.
Governments cannot expect to be able to fund a
larger capital expenditure program, or even sustain
the current levels, without substantial reforms to
their own costs.
I spoke earlier about the opportunities that exist
for asset sales, and they are genuine opportunities to
get projects moving in the short term.
But the recycling of capital must be accompanied
by a complex period of reform to lower the cost of
public service delivery; this will be both complex
Governments must return to a position in which
they are routinely delivering net operating surpluses,
because those surpluses fund capital investment.
The past decade has seen growth in the operating
expenditures by Australia's governments outstrip their
Without reform, New South Wales will see social
security and welfare costs escalate by 6.6 per cent
per year, and health by 6.2 per cent per year.
But revenue growth is projected to average
just 4.9 per cent.
In Victoria, Michael Vertigan's review of state
nances found that Victoria's budget position has
declined since the early 2000s, with average annual
spending growth outstripping average revenue
growth. Queensland's and South Australia's budget
challenges are also well known.
Health costs alone are projected to increase from
15 to 26 per cent of all Commonwealth spending by
2050, and the cost of public health will eclipse the
total revenue of most states by the early 2040s.
Without reform, governments won't be able to
fund all the promises they've made, and we're not
the rst to have to think about that.
In 2011, on public sector reform, the United
Kingdom's Prime Minister, David Cameron, said:
'I want one of the great achievements of this
government to be the complete modernisation of our
But formal institutions can
only inform the public debate.
Only Australia's governments
can drive and lead these kinds of
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