Wednesday, 24 May 2023
Infrastructure Australia Amendment (Independent Review) Bill 2023; Consideration in Detail
SPENDER () (): by leave—I move amendments (3), (4), (6) and (8) to (10) on sheet revised on 24 May 2023:
(3) Schedule 1, item 4, page 5 (after line 8), after subsection 5B(8), insert:
(8A) Without limiting subsection (7), the proposals covered by that subsection include proposals that involve capital expenditure of at least $100 million.
(4) Schedule 1, item 4, page 5 (after line 14), at the end of section 5B, add:
(10) The summary of a proposal evaluated during a quarter must also include:
(i) if the proposal involves capital expenditure of $100 million or more—a cost benefit analysis of the proposal prepared under section 5CA; or
(ii) for any other proposal—a cost benefit analysis of the proposal if one has been prepared under section 5CA; and
(b) a summary of Infrastructure Australia's evaluation of the proposal.
(6) Schedule 1, item 4, page 6 (after line 13), after section 5C, insert:
5CA Cost benefit analysis
(1) Infrastructure Australia must not include a proposal in an Infrastructure Priority List referred to in paragraph 5(b) unless a cost benefit analysis of the proposal has been prepared in accordance with a method approved under subsection (2).
(2) Infrastructure Australia must approve a method for preparing cost benefit analyses of proposals. The method must enable proposals to be compared.
(3) Infrastructure Australia must cause a method approved under subsection (2) to be reviewed:
(a) no later than 12 months after the commencement of this section; and
(b) every 24 months after that first review.
(4) Without limiting subsection (3), a review under that subsection must consider whether cost benefit analyses are adequately taking account of social, environmental and economic costs and benefits.
(5) The report of the review must be made available on Infrastructure Australia's website within 14 days of the report being approved by the Board.
(8) Schedule 1, page 8 (after line 18), after item 7, insert:
7A Before section 40
39E Indexation of amounts
(1) The amount referred to in subsection 5B(8A) is to be indexed in accordance with the method determined by the Minister by legislative instrument. The method must provide for the amount to be indexed:
(a) for the first time on a day in 2028; and
(b) at least once every 5 years.
(2) The amount referred to in subparagraph 5B(10)(a)(i) is to be indexed at the same time, and by the same amount, as the amount referred to in subsection 5B(8A).
(3) Subsection 5B(8A) and subparagraph 5B(10)(a)(i) are taken, on and from a day of indexation, to refer to the amount as indexed on that day.
(9) Schedule 1, page 8 (before line 19), before item 8, insert:
National Land Transport Act 2014
7B Subsection 16(1)
Before "Commonwealth funding", insert "Subject to subsection (1A),".
7C After subsection 16(1)
(1A) If an Investment Project involves capital expenditure of $100 million or more, Commonwealth funding may only be provided if the project has been evaluated by Infrastructure Australia under section 5B of the Infrastructure Australia Act 2008.
7D After section 92
(1) The amount referred to in subsection 16(1A) of this Act is to be indexed at the same time, and by the same amount, as the amount referred to in subsection 5B(8A) of the Infrastructure Australia Act 2008.
(2) Subsection 16(1A) is taken, on and from a day of indexation, to refer to the amount as indexed on that day.
(10) Schedule 1, page 11 (after line 12), after item 21, insert:
21A Subsection 5CA(5)
Omit "Board", substitute "Commissioners".
These amendments replicate an amendment moved by the Prime Minister as the shadow minister for infrastructure in 2014. My thinking and my goals are the same as the Prime Minister's thinking and goals were at that time. The goal is to ensure that the government only invests in infrastructure projects that create benefits that are greater than the costs. To achieve this these amendments require that Infrastructure Australia cannot include projects on the infrastructure priority list unless they have undertaken a cost-benefit analysis and that analysis has returned a positive benefit. To ensure these analyses are undertaken in a reliable and consistent way without the selection of favourable variables the amendments require Infrastructure Australia to publish a standard methodology which must be used by proponents. The amendments then create the requirement that the Commonwealth not provide public funding to major projects which are not on the priority list.
In line with the Prime Minister's amendment back in 2014, a major project is defined as one worth more than $100 million. You would think this would be an uncontroversial amendment as it's one that simply requires that public money be used prudently and one that was previously proposed by the Prime Minister himself, but the fact that almost a decade later it has not been legislated and that there is opposition by the Prime Minister and his government, as I understand it, suggests it is controversial. It is only controversial because it takes away the power of government to make investment decisions which are positive politically but negative economically. I am not confident that the past actions of Commonwealth governments warrant them having unilateral power to determine what should be funded, what should be a priority and whether the public has the right to see whether the project stacks up. I commend these amendments to the House.