Home' Future Building Australian Infrastructure Review : Volume 3 Number 2 Contents futurebuilding 87
Volume 3 Number 2
Graham Bradley AM
What we will be looking for going forward are
clear priorities, rigorous and transparent cost-bene t
analysis, and effective funding plans, including
strategies to attract private sector support.
Surely the lesson that we should have learned
as a nation from our response to the GFC in
2008 is the value of having a well-defined and
costed set of attractive infrastructure projects, as
it were, on the shelf, which can be accelerated,
and which will leave a meaningful and enduring
legacy for future generations.
Governments concerned with budget surpluses
need to decide whether it is in the best long-term
interests of the country to redistribute tax revenues
to households, or to invest in growing Australia's
productive capacity. The answer is pretty obvious
here in Australia, as it is, of course, in the United
States and in Europe. If those economies are going to
throw off the shackles of growing debt and slowing
economic growth, governments can and should
prioritise investment in infrastructure projects, the
way we do it in the private sector.
When governments are under pressure to
balance budgets, the money they spend on
infrastructure has to be spent wisely. This is the
only way to attract much-needed private sector
co-investment in those projects.
To secure the current pipeline and plan for the
next phase of growth, governments need to take the
community along with them. The community has to
be reassured that the public infrastructure decisions,
and their money, are being spent wisely.
This brings me to a Business Council publication
that we hope will contribute to the vexed issue of
governments making good decisions about how they
spend our infrastructure dollars.
Over the course of many years, the Business
Council has promoted the importance of using
cost-benefit analysis to evaluate major public
expenditure. We welcome the increasing use of
cost-benefit analysis, notably by Infrastructure
Australia and its counterparts around the country.
But we remain concerned that decisions about
regulation and spending programs involving large
amounts of public money are being made by
governments without proper, transparent analysis
of costs, benefits and risks. This is not just an issue
of how public money is spent; it creates a much
broader problem, in our view.
When the community sees considerable funds
going into projects where the bene ts are unclear,
they lose con dence in the broader decision-
making processes of government. That undermines
community support for economic reform, and the
importance and value of growth for every Australian.
So the Business Council asked Deloitte Access
Economics to develop a back-to-basics document
explaining exactly what cost-bene t analysis is
all about. For almost everyone in this room, this
will be cost-bene t analysis 101, but for many in
government, in the public service, and many in the
media, we hope it will be informative and lead them
in the right direction.
We hope that this simple tool will help the whole
community envisage and plan the nation's future in a
different way. This is not just about infrastructure; it is
about what comes next for our economy as the major
resource project boom inevitably starts to wane. If
we can use our current capital investment pipeline,
and the economic options it will give us to create
national growth and a vision for that growth that goes
beyond the commodities boom, then we will have
genuinely spread the bene ts of that boom to the
whole Australian economy.
GRAHAM BRADLEY AM
Deputy President, Business Council of
Graham Bradley is the Deputy President
of the Business Council of Australia (BCA). He
previously served a two-year term as President
of the BCA until 2011, and has been an honorary
member of the BCA and its board since 2009.
Mr Bradley holds a number of senior positions,
including as Chairman of Stockland and as
Chairman of HSBC Australia. He was Managing
Director of Perpetual Limited from 1995 to 2003,
and prior to that he was a National Managing
Partner of Blake Dawson, and a Partner of
McKinsey and Company.
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