Home' Future Building: The Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 51
Volume 4 Number 1
Peter Harris AO
But I will give you some context and make some
comments on things that I think are tremendously
important for creating an effective environment for
future infrastructure investment.
So rst, this bit of context.
The Howard Government in 2005 reviewed
export infrastructure, and came to the conclusion
that there was a bit of a problem with regulators and
regulated pricing, but that there were no actual real
impediments to this.
The Rudd Government in 2008 also undertook a
serious infrastructure review, and we ended up with
Infrastructure Australia and the Building Australia
Fund. The funding has now ended, but the structure
at least remains.
Both of these processes were quite worthy
examinations of the overall question of why we
continually seem to be under-investing in infrastructure.
But today, ve years on, we still have this focus
on the iconic infrastructure project as if it is going to
solve the problem. And it isn't going to be suf cient
to solve the problem.
Moreover, while there is a focus on just one
icon project, not only will the conundrum remain
unanswered -- simply because there is no solution to
it from a single funding effort by private partnership
or public investment -- we also risk squeezing out
any focus on how to get the best combination of
If you look at an aggregation of the projects
submitted to Infrastructure Australia by a bene t
cost ratio (BCR), it will show you that the very large
projects have quite low BCRs, and some of the small
projects have very high BCRs.
So the icon project, the very big project, may not
necessarily be the best way of solving a productivity-
Another factor is that infrastructure funding is
up. Analysis by the Australian Bureau of Statistics of
public sector investment across the country shows
quite a large increase as a percentage of GDP in
infrastructure spending in recent times.
But these numbers do not include anything on
the NBN, 4G Mobile, or airport projects, and little,
if any, contribution from Public Private Partnerships
(PPPs), so even these increases are probably
an underestimate. We have more going on in
infrastructure than we might think.
Nevertheless, the trend increase does not tell you
anything about whether or not we are meeting needs.
Infrastructure isn't something we just want to have;
its purpose is to meet consumer and business needs.
Treasury noted a few budgets ago that the average
age of our infrastructure is increasing, suggesting a
potential build-up in replacement need. And it is true
that a signi cant part of our major urban transport
infrastructure is either Depression-era or immediate
post-war -- that is, 50 years old or more.
Congestion gures are rising. Peak period travel
times on arterial roads in urban areas continue to rise.
Melbourne and Sydney trains and trams regularly
exceed their 'crush' crowding levels.
Airports like Perth and Brisbane -- not just Sydney
-- regularly suffer infrastructure-related delays;
Melbourne's airport road access is poor, and Sydney's
is probably not much better.
At the same time, there is also over-
Airports like Perth and Brisbane -- not just
Sydney -- regularly suffer infrastructure-related
delays; Melbourne's airport road access is
poor, and Sydney's is probably not much
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