Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Hansard source

I rise to speak on the Infrastructure Australia Bill 2008. Failure to address the infrastructure challenges facing Australia will threaten our national prosperity, our job markets, our cities and our ability to address inflationary pressures. Put simply, this is an issue that directly impacts our quality of life. That is why the Rudd Labor government is establishing Infrastructure Australia. Infrastructure Australia will advise on national infrastructure priorities, better arrangements for investors, better use of our current assets and improved capability and planning. Better infrastructure means better communities. It means liveable cities; water and energy getting to where they are needed; cars, trucks, trains, ships and planes leaving and arriving on time. It means a more productive economy delivering better living standards and reductions in man-made emissions to the air, soil and water.

Australia is a trading nation. Getting our agricultural products, manufactured goods, minerals and services to international markets is how we make our way. Australia’s geography and distribution of our population means that we are dependent on efficient infrastructure investment and use. Underinvestment in infrastructure reduces our ability to trade in international markets. Failure to fix infrastructure shortfalls, supply chain bottlenecks and urban congestion puts a brake on economic and productivity growth. It also puts stress on our communities.

Infrastructure is about the future. National coordination of infrastructure is a key element in the government’s plan to lift productivity and fight inflation. It requires national leadership to tackle the bottlenecks and backlogs in strategic infrastructure such as transport, energy, communications and water. It was recently estimated by CEDA that it would take around $25 billion of new investment just to bring Australia’s strategic infrastructure up to scratch. In an intelligent economy, infrastructure systems interact organically, building interdependencies, network benefits and synergies. In Australia, our infrastructure systems can create interdependencies, but frequently they heighten the risk of problems flowing virus-like from one network to another. For example, capacity constraints on our railways and on our roads affect the functioning of our ports. Water shortages impede industrial and mineral production and, frequently, improvements to our arterial roads simply push traffic snarls and congestion downstream.

The solution requires cooperation at all levels of government—Commonwealth, state and local—as well as the involvement of all sectors of the economy, public and private. Unfortunately, until now, the provision of important infrastructure has been considered in silos, in isolation, within different levels of government and without dialogue between the public and private sectors. As recently demonstrated capacity constraints in the Queensland and Hunter Valley coal chains have shown, a lack of coordination between governments and the private sector inevitably results in a loss of national income and reduced opportunities for our export industries.

Infrastructure investment needs to be determined objectively and according to long-term need, thereby creating an environment conducive to greater public and private investment in common user and public infrastructure. The Business Council of Australia in its Infrastructure action plan for future prosperity report called for an integrated long-term planning framework across jurisdictions for the coordinated provision of infrastructure to underpin sustained strong economic growth. The nation needs a mechanism that will achieve both of these ends and, in so doing, lock in Australia’s future prosperity and higher productivity.

The government has started building that mechanism. It is called Infrastructure Australia. Infrastructure Australia takes a two-pronged approach. Firstly, it will lift investment in new infrastructure. Secondly, it will make better use of existing infrastructure. Infrastructure Australia’s initial task is to conduct a national audit to determine the capacity and condition of nationally significant infrastructure. This audit is to be completed and presented to the Council of Australian Governments, COAG, by March 2009. It is ambitious, but we have to be ambitious. The longer we wait and the slower we are, the worse the problem will get. After taking into account expected future demand, the audit will also identify gaps, deficiencies, impediments and bottlenecks across important sectors of the national economy.

Infrastructure Australia is the new mechanism to identify the nature of our infrastructure shortfall and the broad investment, legislative and regulatory responses required. Synergies from streamlining guidelines, legislation and regulations across jurisdictions will make for more competitive environments and more efficient planning and use of infrastructure. Infrastructure Australia will have the capacity to improve tender processes and contract documentation between Commonwealth and state jurisdictions. Harmonising procurement guidelines means investment partnerships being better. Whether they provide for public-private partnerships, private delivery or public delivery of infrastructure, they can deliver better value for money and investment dollars can be matched with infrastructure priorities. Nationally consistent best practice public-private partnership guidelines will be available by the end of the year and will make it less expensive for local and international companies to invest in Australian infrastructure. Robust regulatory and market priced frameworks will encourage efficient use of infrastructure and timely investment in new and updated infrastructure.

The matter is urgent. Our cities are facing challenges that reduce their liveability. While the economic cost of congestion in our major cities has been estimated at $9.4 billion in 2005, on a business-as-usual basis it is expected to increase to $20.4 billion by 2020.

The solution cannot be simply one of building our way out of the problem but of examining more fundamentally the competing demands and overloads right across the infrastructure spectrum. This legislation establishes Infrastructure Australia as a statutory advisory council to develop a strategic blueprint for our nation’s future infrastructure needs. In partnership with the states and territories and in consultation with the private sector and local government, it will oversight the blueprint’s implementation. Infrastructure Australia will provide advice about the infrastructure gaps and problems that hinder economic growth and prosperity. It will also identify investment priorities and policy and regulatory reforms that will be necessary to enable timely and coordinated delivery of national infrastructure investment.

The Infrastructure Australia council will have 12 experienced members, drawn from industry, government and local government. The new Office of the Infrastructure Coordinator will be a statutory office within the Infrastructure, Transport, Regional Development and Local Government portfolio, supported by a small team of professionals. COAG has created an infrastructure working group which will have a critical role in devising the reporting arrangements to COAG for Infrastructure Australia as well as the scope for the infrastructure audit. The emphasis will be on the future capacity of strategic infrastructure to improve national productivity. In addition, Infrastructure Australia will be expected to provide advice on regulatory reform that can improve the utilisation of infrastructure and streamline new projects. It will propose ways to harmonise legislation and regulation across jurisdictions.

Our infrastructure shortfalls and bottlenecks have developed over the past decade. They are exacerbated by the current economic circumstances. Solutions will take time but we must start now. Infrastructure Australia is the first critical step. I commend the bill to the chamber.

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