Allegra Spender (Wentworth, Independent) Share this | Hansard source

SPENDER () (): I would like to begin my contribution by welcoming the Infrastructure Australia Amendment (Independent Review) Bill 2023, which would enhance the integrity of the Infrastructure Australia Act 2008. The principle behind Infrastructure Australia is a sound one. Commonwealth governments should have an independent expert body advising them on major infrastructure projects. It's a sound principle because Australia has a huge number of projects which the government could potentially fund but we don't have the finances or the resources to deliver all of them. We have to decide what's most important and what the best use of public money is.

The Prime Minister recently articulated these principles when he told the House:

The legislation that is before parliament, moved by the infrastructure minister, will make sure that there's transparency and will make sure that there's proper analysis. That's because there's a finite level of resources, and that is why we should make sure that productivity drives that agenda going forward. That is what my government is committed to, and that's what we will get on with …

That's what the people of Wentworth want and expect from their governments. They want their money, public money, to be used wisely to deliver real outcomes that make our country a better place. But the truth is that past governments of both political persuasions have made investment decisions that fall short of this ideal. They have repeatedly prioritised their private political interest over the public interest, which means that many worthwhile investments have been overlooked as scarce resources were used elsewhere. People in Wentworth are worried that this could continue under this or future governments. Maybe we won't see a repeat of the sports rorts or the car park rorts, and I sincerely hope we won't, but allocating public money to projects with questionable benefits, like the Inland Rail or Hells Gates Dam, is not the best use of scarce resources.

The mission of Infrastructure Australia is to ensure that public investments are made in the public interest—that is, in the projects that deliver the biggest bang for buck. The mission is to ensure that no worthy economic project misses out simply because another project was funded for political reasons. This is a hugely important mission, and I acknowledge we are still a long way from getting there. But we are closer than we used to be, and I credit the Prime Minister for that. He was the minister when Infrastructure Australia was established and is the reason project selection is so much better than it once was.

We have the opportunity now to bridge the gap between our reality and our aspirations for Infrastructure Australia. This bill would certainly help that. It implements some of the recommendations of the independent review of Infrastructure Australia, providing it with a clear mandate and improved processes, which I support. But the bill could go further. It could also require that a positive economic evaluation is required from Infrastructure Australia before the government could commit any public funding for major projects. This would prevent cherrypicking, it would prevent pork-barrelling and it would prevent waste. It is an amendment that should have the Prime Minister's support, because it is an amendment that he moved in 2014 to a previous Infrastructure Australia bill. At the time, he said, 'This government, if it is fair dinkum, should support these amendments.' I couldn't agree with him more. This amendment is entirely consistent with the principles the Prime Minister identified: transparency, proper analysis, finite resources and productivity. I hope that, when we move into the consideration stage, the Prime Minister will support this amendment, support his amendment and bring Infrastructure Australia closer to what it needs to be.

The second part of my amendment deals with the problem of cost blowouts. Inland Rail was the poster child for this. It was originally meant to cost $8 billion, then $16 billion. Now it is more than $30 billion. Similarly, the CopperString project originated as a $1.5 billion electricity transmission project. That is now, four years later, a $5 billion project. Remarkably, the Queensland government has never released a business case demonstrating whether it provides value for money. There are many more examples.

It is high time we accept our inability to accurately forecast project costs. It's time to correct for past mistakes. We could do this by collecting cost data on completed projects. This data could inform future estimates, basing them on real-world experience rather than hopeful future projections. This would help us include the unknown unknowns in project development that inevitably crop up. Better estimates will help us make better decisions about how we use public money and about which projects we back and which projects don't make the cut. This approach is called reference class forecasting, and has been described by Nobel Prize winner Daniel Kahneman as the single most important piece of advice regarding how to increase accuracy in forecasting through improved methods. This is a sensible approach to infrastructure decision-making—one with more integrity and one in which Australians can have more confidence. Importantly, it's one that will help drive the productivity gains that infrastructure investments are intended to deliver.

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