Call for new era of infrastructure reform

In his last major address as the organisation’s head, Mr Davies used his speech at CEDA’s State of the Nation conference in Canberra to launch Infrastructure Australia’s new report, Prioritising Reform and provide a recap on his three-year term as CEO.
 
Prioritising Reform provides an update on the progress of infrastructure reform in Australia against the 78 recommendations made in the 2016 Australian Infrastructure Plan.
 
Mr Davies said while Infrastructure Australia had done its bit to advance the case for infrastructure reform, it’s important to regularly report on the progress of the key recommendations in the Plan.
 
“The overall summary is there’s some really good progress and there’s some areas where we can do better,” he said.
 
“We do acknowledge that reform is hard, and having said that, some of the things that have advanced I think should be noted.”
 
He said heavy vehicle road user charging reform is progressing, a renewed National Freight and Supply Chain Strategy is underway and targeted funding for pinch-points and first- and last-mile issues has been allocated.
 
In addition, long-term corridor preservation is being actioned in some jurisdictions, and there’s an increased openness to using government debt to fund projects. At the city level, better integration of transport and land-use planning is being made with a greater focus on major growth areas such as Western Sydney.
 
“My observation after three years in this role is that through the efforts of many organisations we’re seeing a far greater level of collaboration,” Mr Davies said.
 
“When Infrastructure Australia was established in 2008 we were the only infrastructure body around the country and now I’m very pleased to say there’s a number of infrastructure bodies established, in fact in most states and territories.
 
“We’re seeing the roll out of the model of an independent body able to provide independent advice to governments.
 
“That works very well for us at Infrastructure Australia. It gives us some friends to talk to around the country with a like-minded focus on long-term planning and developing good projects and also driving some of the reforms.”
 

Mr Davies said this welcome development has also provided for a lift in the standard of business case development, with a more iterative and feedback-based model taking shape.
 
Mr Davies said Australia should be proud of being one of a few countries that has an infrastructure plan and we should use it. But in terms of reform there are some areas that have stalled.
 
“We should remember we’ve done this before,” he said.
 
“Back in the 80s and 90s we had a period of strong reform and in fact one could argue that that reform has led to the 26 years of economic growth we’ve heard about (here at State of the Nation) today.”
 
He warned there is a danger that Australia is becoming complacent.
 
“It’s really important I think that we all play our part, particularly business,” he said.

“The business community played a strong role in the reforms back in the nineties and I think we need to see business making a greater contribution now.
 
“We also need to see a strong spirit of bipartisanship.”
 
One area of reform Mr Davies called for was the establishment of a national population plan or a settlement plan.
 
“Many of our state and territory colleagues are responding to growth and I think there’s a strong message coming back that they’d like to see a more joined up approach with the federal government coming together with all state and territory governments and actually looking to the long-term and making sure we’re making smart decisions and making sure we’re taking the opportunities to develop some of our smaller cities like Adelaide,” he said.
 
“It’s not just about the four major capital cities in terms of growth.
 
“But one of the things that this plan needs to bring is a spatial plan for the long term because that is really the basis for state and territory governments to do their land-use planning.
 
“That’s why I think we’ve struggled with land-use planning because it’s been quite responsive to growth and what we need to do is get on the front foot and actually put down long-term land-use plans and then we can back them in with transport plans and infrastructure plans more broadly.”
 
This was particularly important, he said, given the levels of growth we are seeing in Sydney, Melbourne, Brisbane and Perth.
 
Mr Davies said project planning and project selection was an area where good progress has been made.
 
He said over the 10 years we’ve seen a credible pipeline of future infrastructure investment developed and that’s been initiated and supported by the Infrastructure Priorities List.
 
The update to the List in March this year included $55bn worth of projects. At the same time, $25bn worth of projects moved off the list into construction.
 
“I think that illustrates that this kind of pipeline is starting to work,” Mr Davies said.
 
He noted some very significant projects to move off the list include Western Sydney Airport, Inland Rail, Westconnex, Sydney Metro, Melbourne Metro Tunnel, Moorebank Intermodal Terminal, the M80 Ring Road upgrade, City Link Tullamarine Widening Project, Brisbane Metro, Bruce Highway upgrades, Forrestfield Airport link and Adelaide’s North South corridor.
 
“But one of the challenges I think with the list and with governments … is governments like making announcements,” Mr Davies said.
 
“And one of my observations from my time in this role over the last three years is that it’s really difficult to engage communities and make sure we get the right project delivered if we make early announcements.
 
“It’s really critical that governments, as this federal government has been doing, is committed to funding business cases but hold their powder dry in terms of the full funding of projects until we actually know that’s the right solution to the problem.”
 
He said he’d like to see greater discipline from all levels of government in terms of committing to projects before we know what the right solution is. In addition, project funding should be conditional on good practice, on looking at all the options and developing the right solution. That would go a long way to getting best value out of our investments.
 
One of the most critical reforms and probably most challenging Mr Davies said was around how we pay for our roads. He said it was critical the government get on with the public inquiry into road reform that was promised in 2016 as the challenge of funding isn’t get any easier and we’re seeing a consistent fall in excise.
 
Road market reform also needs to address fairness issues, he said.
 
He said a new period of reform was needed.
 
“We’ve never lacked vision in this country. We’ve got a long and proud history of reform. We’d really like to draw inspiration from that and see a new period of reform. We think we put a pretty comprehensive reform agenda together here in the form of our plan.”
 
“This is a continuum recognising that some of these reforms do take more than the two years since we put the last plan together. We’re going to keep the agenda moving forward.”