House debates

Wednesday, 24 September 2014

Committees

Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014; Second Reading

9:58 am

Photo of Warren TrussWarren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

May I thank members from both sides for their contribution to this debate and welcome the support that has come for these amendments, which come in part from commitments that I made to the opposition spokesman that we would bring this bill into the House to tidy up some elements of the original bill which did not accurately reflect the wishes of either side or, for that matter, common sense. The government is committed to building a stronger Australia and our May budget laid out an infrastructure plan that will deliver vital transport infrastructure across Australia. It will also create thousands of jobs and increase the economic prosperity of this nation.

The building of the infrastructure of the 21st century needs to go hand in hand with reforms that will ensure we select and build the right infrastructure at the right time. The coalition government committed to and has reformed the peak industry advisory body, Infrastructure Australia. No longer is the head of IA under the direct guidance and direction of the infrastructure minister, as was the case under the previous government. No longer will IA be required to retrofit its advice to align with the election promises of any government, as was previously the case. The previous government was right to set up Infrastructure Australia; it was just wrong in the way it used it. As an independent, transparent organisation, with the CEO responsible to the board, Infrastructure Australia is now set to be fundamental to long-term infrastructure planning in this country, effectively coordinated across jurisdictions and underpinned by robust, evidence-based advice.

I am a firm believer in not putting into legislation what does not need to be there. The government is about red-tape reduction and not about red-tape creation. In fact, regulatory best practice would dictate that primary legislation not be a repository for superfluity. The government committed to have Infrastructure Australia assess projects receiving over $100 million in Commonwealth funding. That, in my view, does not need to be in legislation. The government committed to that threshold, and that is exactly what is happening without it actually being in the legislation.

However, during the debate on the Land Transport Infrastructure Amendment Bill, there were claims that the government was reneging on the election commitment to a $100 million threshold, because it was not specifically stated in the bill. So the government is now prepared to act in good faith to put the words in the legislation. We gave an undertaking during debate on the Land Transport Infrastructure Amendment Bill to introduce legislation to put the $100 million threshold in legislation, and that is exactly what we are doing here. We take our commitments seriously.

The bill amends the act to include in the functions provision the requirement that Infrastructure Australia undertake evaluations of proposals that involve Commonwealth funding of at least $100 million. This figure is to be established as a benchmark, based on 2014 dollars, and indexed every five years to ensure that this figure maintains relativity into future years. This provision is an expansion of the power given to Infrastructure Australia to evaluate projects. This means that the existing power to evaluate proposals for nationally significant infrastructure and other infrastructure determined by the minister has now been expanded to allow the evaluation of proposals for investment or enhancements to nationally significant infrastructure that are seeking Commonwealth funding of at least $100 million.

Contrary to what the member for Grayndler mentioned in his speech, there is no limitation in the new provision. That is what the words that introduce the provision, 'without limiting the function', mean. Let me make it also clear that this power to evaluate relates to proposals for investment or enhancements to nationally significant infrastructure. The reference to the word 'proposals' in 'proposals for investment in, or enhancements to, nationally significant infrastructure' makes it obvious that the consideration by IA is taking place when there is a proposal before them—that is, from a proponent seeking funding.

It is the duty of any government to make sure that Commonwealth funding is spent properly and we achieve value for money. We want to make sure that any project proposal seeking Australian taxpayer money is robust. As the opposition spokesman knows, there will also be other due diligence processes undertaken by my department before any funding decisions are made. I make this point to clearly state that this information that has been around and put forward by some speakers during the debate is wrong.

The government recognises the importance of improving Australia's processes for selecting, prioritising, financing and delivering major infrastructure projects. A robust methodology is necessary to properly inform consistent and relevant cost-benefit analyses for infrastructure projects. To this end, the government commissioned the Productivity Commission to undertake its inquiry into public infrastructure. The inquiry investigated a range of longer-term options to improve project selection and prioritisation. The government is closely considering the Productivity Commission's findings, with a view to releasing a formal response later this year, but is already undertaking reforms to improve the robustness of its project assessment and delivery mechanisms.

In line with the Productivity Commission's findings, the government recognises the importance of robust, consistent use of cost-benefit analyses in assessing projects to ensure that our limited public resources are targeted towards the productivity-enhancing public infrastructure projects which best meet Australia's needs. To this end, earlier this month the government released for public comment a proposed project appraisal framework developed, in consultation with Infrastructure Australia and state and territory governments, by the Bureau of Infrastructure, Transport and Regional Economics. The paper is the outcome of Australian state and territory governments agreeing to consult to develop a more sophisticated and consistent framework to assess and evaluate major infrastructure projects. I look forward to the outcome of that public consultation.

There has been some mention about the government's approach to public transport. Public transport needs are relevant in the delivery of Australia's infrastructure. For instance, the Asset Recycling Initiative will provide an opportunity for state governments to fund priority infrastructure which may include urban rail projects and so address public rail transport needs. Indeed, since the election of the federal coalition government, almost every state has committed to major public transport projects, and we welcome their commitment to fulfilling their responsibilities in that particular area.

The amendments in this bill build on the reforms already being implemented regarding Infrastructure Australia. This will ensure that this organisation is well placed to provide key advice to government and so inform decisions on the delivery of the infrastructure and transport that is so critical to the future needs of this nation. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Comments

No comments