Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

It is important to develop a realistic long-term infrastructure plan exemplified by Infrastructure Australia's proposed 15-year infrastructure plan and to also increase private sector investment in infrastructure by looking at options for funding and financial mechanisms and by harmonising and standardising procurement guidelines. Efficient infrastructure provides services that improve both productivity and quality of life. However, poorly chosen infrastructure projects can reduce productivity and financially burden the community for decades with infrastructure that is inappropriate and expensive to maintain.

In Australia, there is a fundamental need for a comprehensive overhaul of the poor processes currently used in the development and assessment of infrastructure investments. All other desirable or aspirational objectives—projected pipelines, increased private financing, cost savings and even user charging and price uniform—ultimately depend, for their efficacy, on having a much strengthened and widely applied set of credible and welfare enhancing reforms.

The Productivity Commission also appeared before the committee hearing, having just released their report on public infrastructure. That report, inter alia, discussed user charging, concluding that it should be used to the fullest extent that can be economically justified. They proposed that well designed and efficient user charges are likely to be superior to taxpayer funding of infrastructure in many situations. Efficient user charges are an effective means to real willingness to pay for new infrastructure and improve the use and augmentation of existing infrastructure. User charges are already the norm for most types of economic infrastructure such as electricity, telecommunications, gas, water and many transport sectors. Concerns about market power can lead to such charges being determined or monitored by a regulator. The extent to which user charges are able to recover the full cost of supply differs across sectors and regions. As infrastructure can provide benefits over generations, user charges too can span generations if they are properly reflective of the effective life of the assets concerned.

The Productivity Commission report also discussed asset recycling, an important initiative of the coalition government's infrastructure plan. The Productivity Commission acknowledges that governments have successfully privatised airports, major ports and electricity infrastructure services. They recommend that states proceed with the sale of any remaining assets of these types, subject obviously to good sale processes including a sound regulatory framework. The priority for the sale of government-owned assets is not to secure the highest price per se but to ensure that economic efficiency is achieved, the risk to consumers and other public interests are managed, the market structure is amenable to privatisation and the sale is conducted efficiently, ethically and transparently.

When the Productivity Commission appeared before the committee, they wanted to address a number of questions and comments that had arisen after the release of their report. The report was not an inquiry into specific infrastructure projects but was rather approached by stepping back from the entire topic and saying, 'What things are going to most significantly make a difference to improving infrastructure and how, in this case, does infrastructure proceed in Australia?'

Both the committee inquiry and Productivity Commission looked quite closely at the role of Infrastructure Australia. The concept of having an overarching entity which looks at infrastructure across the economy is conceptually very appealing, as is looking at how Infrastructure Australia can play a larger part in securing the Commonwealth and state governments' interests in infrastructure projects from the very beginning, especially when dealing with public-private partnerships. The committee also heard from Engineers Australia who identified the lack of engineering input when it came to forward infrastructure planning, and that this lack of engineering expertise resulted in far greater costs down the track:

… the stripping out of the engineering and technical structures in many public service agencies. What this leads to is an inability to adequately monitor technical design, what is being delivered, and adequately oversight outsourcing arrangements.

Engineers Australia has suggested that agencies that have these technical responsibilities need to be able to understand what it is they are expected to do and what resources they require. These resources can in fact be obtained from the private sector, with suitable firewalls between those arrangements and subsequent procurements. Another point they stress is the time and investment it takes to educate and train engineers to full competence. The intermittency related to engineering is of serious concern to the industry.

The committee is looking into many different factors from a wide range of stakeholders involved in Commonwealth infrastructure planning and procurement to ensure that, as we move forward, we are getting better value for the taxpayer dollar—not just at the build stage of an infrastructure project, but throughout its lifetime as well. The inquiry is also emphasising the importance of long-term infrastructure planning and the designation of infrastructure corridors, especially for rail, to ensure that the land is available once a project becomes economically viable.

Efficient provision of infrastructure, including public infrastructure, is the hallmark of a well-functioning economy. I welcome the government's commitment to building infrastructure for the 21st century and to approaching infrastructure planning and procurement sensibly and efficiently, ensuring that Australia's infrastructure can support a growing population and future requirements. I commend the bill to the House.

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