Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 2 Contents futurebuilding 39
Volume 3 Number 2
to continue to deliver that level of infrastructure in
the new world that we live in.
So we are seeing major reforms in the electricity
market and the water market to cope with the changes
in the market.
The other thing we are seeing in the United
Kingdom at the moment is a desire to reduce
We are seeing a major program of reform of
public services, which is designed to bring down
the cost of these services. I would say there's a bit of
schizophrenia about that reform: there is a recognition
that the private sector has to get involved more in
public services, but there is a political nervousness
about the word 'privatisation', and there's even a
political nervousness about the word 'outsourcing'.
So people are looking for a new model that isn't
necessarily commercially that different, but that will
certainly have a different political message behind it.
Another important issue is the difference between
funding (the means to pay) and nance. Finding the
means to pay for infrastructure is far more important
than nding the means to nance it.
And certainly in the United Kingdom, we are
seeing some really interesting ideas being put
forward as to how we might pay for infrastructure
in the future.
I think we will de nitely see more consumer
charging, and we are seeing the rst signs of
people looking at hypothecating tax. Someone said
this morning that you could pay for infrastructure
by increasing tax; you could also pay for it by
hypothecating existing tax streams and using the
long-term cash ows to pay for infrastructure.
We are also seeing much more use made of local
taxation, in terms of using business rate taxes within
a community to fund new infrastructure.
A trend in the United Kingdom, and indeed in
Australia and around the world, is that cities are
increasingly becoming driving forces of a country's
economy, and therefore infrastructure investment in
cities is becoming more important. Because there is
less money coming from federal governments, cities
are becoming more self-dependent in the way they
invest in their own infrastructure.
MB: A major initiative of the British Government
has been trimming its public sector costs so it can
free up capital. How is that tracking?
JS: I think it's going reasonably well. Quick
wins have been achieved, and they are now getting
to the hard stuff. Personally, I think the real bene ts
will only come when they genuinely do reform the
delivery of public services. They are struggling with
this at the moment.
My personal view is that they've probably
achieved about 20 per cent of what they want to
achieve, and they've got to genuinely reform public
services to deliver the rest.
MB: Nick, you've spoken before about how we
should be talking more about operational ef ciency.
Can you expand on that as the real challenge?
NG: Governments operate in silos more than
most other institutions. There is a natural tendency to
go to the project end rst. There's been debate in New
South Wales about whether there is a connection
between the operating reform of Railcorp and the
capital program; and there are different views. I think
the answer is obvious: the answer is yes -- not only in
a funding sense, but also because the productivity of
the existing assets is clearly where you should start.
If you can get more trains across the bridge in an
hour, well that's the step you should take before you
need another bridge -- it's obvious.
I think it's politically dif cult: it's where jobs are;
it's where public sector jobs are. In Australia, we
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