Federal ALP moves to demand business cases

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By Andrew Herington

The growing practice of secret business cases for major transport projects is coming under fire in Canberra. The ALP and Greens are saying – if you want federal money, then projects must be assessed by Infrastructure Australia and justified by a public business case.

This has huge implications for Victoria which is pushing ahead with Stage 1 of the East-West toll road on the basis of a top-secret business case. Stage 2 and the new Melbourne Rail Link (Fishermans Bend) project have been announced and funded without even a business case being completed.

On Friday 9 May, the Shadow Minister for Infrastructure, Anthony Albanese released Labor’s amendments to the Infrastructure Australia Amendment Bill (2013) which will be debated in the Senate in coming weeks.

These amendments will ensure:  

  • that the Minister can’t direct Infrastructure Australia to not look at certain classes of infrastructure – which is code for banning public transport projects, and
  • that IA processes are transparent and cost-benefit analysis of each project seeking Federal funding is available for all to see.

Mr Albanese said, ”This isn’t an academic exercise. It’s about making sure taxpayer dollars as well as private sector investments is directed to where it will produce the most economic benefit. Independent, non-political advice is critical if governments are to invest scarce public funds in projects that have the greatest potential to boost productivity and create jobs”.

The need for an independent Infrastructure Australia was highlighted in submissions to the Senate Inquiry into the Bill from such major groups as the Business Council of Australia, the Urban Development Institute of Australia, the Tourism and Transport Taskforce and Infrastructure Partnerships Australia.

“Right across the board there has been concern at this attempt to take away Infrastructure Australia’s (IA) independence. While governments make spending decisions, without genuinely independent advice to guide decision-making, there is a risk of the political pork-barreling that plagued the Howard era”, Mr Albanese said. “It is also critical that all IA research continues to be publicly available so citizens and potential private sector investors can measure government decisions against the independent, non-political advice provided by IA.”

The Coalition’s infrastructure policy for last year’s election, which is still on their website, clearly states that an Abbott Government would "require all Commonwealth infrastructure expenditure exceeding $100 million to be subject to analysis by Infrastructure Australia to test cost-effectiveness and financial viability."

Tony Abbott’s ban on public transport funding has seen the federal government take $3 billion from the Melbourne Metro project, $715 million dollars from Cross River Rail; and $500 million from Perth public transport light rail and the airport link. A full list of the cuts to existing infrastructure projects is contained in a pre-budget briefing from the Opposition here.

In the case of the Swan Valley Bypass project in Perth – the original agreement with the WA Government was for 50/50 funding. Tony Abbott has increased the Commonwealth share to 80% reducing the State share to 20%. But then he pulled all Federal funding for the Perth Max light rail and the airport rail link. Both projects now face delay or scrapping.

There is a strong chance the current Senate can impose these amendments – and restore some rationality to how federal funds are allocated. There is also no certainty the Bill would pass in its current form under the new Senate after July. This would mean that the promised billions for the East-West toll road, WestConnex in Sydney and other freeway projects around Australia would become dependent on a positive appraisal from Infrastructure Australia and the release of business cases.

This would have a major impact on Melbourne’s East-West toll road which has only survived to date because its business case is secret and the Victorian Government has staked its political future to the road. Community groups and individuals are urged to campaign in support of these amendments to ensure they get the attention they deserve.

 

 

 

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