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

I move:

That this House:

(1) notes that:

(a) Australia is currently committed to a ten-year, $120 billion infrastructure investment pipeline;

(b) infrastructure investment is important but does compete directly with housing for materials and skills within the construction sector;

(c) two independent inquiries, namely the Independent Review of the National Partnership Agreement on Land Transport Infrastructure Projects and the Independent Strategic Review of the Infrastructure Investment Program, have been critical of the processes for determining Commonwealth Government infrastructure allocations; and

(d) Infrastructure Australia noted that in 2019 the construction sector was at capacity and since then infrastructure spending as a share of gross domestic product has increased 50 per cent while construction costs have increased by more than 30 per cent; and

(2) calls on the Government to:

(a) publish a response to the independent reviews;

(b) commit to implementing long-term investment strategies and publishing businesses cases for large-scale infrastructure projects; and

(c) identify and pause non-essential infrastructure projects until capacity has returned to the construction sector.

The planning and development of critical infrastructure is one of the core responsibilities of government. This infrastructure enables our cities and regions to thrive, and it underpins Australia's way of life. Under the National Partnership Agreement, the federal government has committed $120 billion towards infrastructure projects over the next 10 years through the infrastructure investment pipeline. Infrastructure is a sizeable portfolio. It's the seventh biggest expenditure item, only after things like health, defence and social security. Given its size and importance, Australians reasonably expect that infrastructure funding is allocated diligently and methodically to manage the trade-offs and maximise benefits to the country. But they would be wrong in assuming so.

Last year two separate and independent reports handed down scathing indictments of the federal government's handling of the national infrastructure investment pipeline. In August last year the independent strategic review found, 'There are projects in the infrastructure investment pipeline that do not demonstrate merit, lack any national strategic rationale and do not meet the Australian government's national investment priorities.' Similarly in November, the mandatory review of the National Partnership Agreement on Land Transport Infrastructure Projects, the Halton review, found that the lack of information gathering and due diligence 'undermines the Commonwealth's capacity to be an informed investor in land transport infrastructure'.

This goes much deeper than one project being approved ahead of another. The suboptimal allocation of infrastructure funding is contributing to capacity constraints in an already stretched construction sector. This is forcing projects to come in well over budget and compete against other national priorities, most importantly housing. As a result, the infrastructure investment pipeline identified $33 billion in additional known cost pressures as a result of 'a clogged infrastructure pipeline that does not reflect current market capacity'. Let that sink in for a moment. Cost blowouts now represent 30 per cent of the total initial budget allocation of the IIP at a time when inflation is rife and we need the construction sector to urgently deliver more homes.

The problem has been brewing under governments of both stripes. Just last week, the COVID review indicated that the coalition's excessive fiscal and monetary policy stimulus provided throughout 2021 and 2022, especially in the construction sector, had contributed to inflationary pressures coming out of the pandemic. It's therefore commendable that the government initiated the review of the IIP.

However, the response from the government has been disappointing. The review of the IIP recommended 82 projects not yet under construction be immediately ceased and 36 projects not yet under construction be immediately re-evaluated. But the government's response was limited to a list of 50 projects where funding has been withdrawn. We have no way of telling whether the government's projects—their 50—overlay with the 80 projects that the review recommended be ceased or re-evaluated, because the government still have not released the IIP review in full. Instead, they've only released the executive summary. The response included no strategies for how the government would seek to address cost pressures now or into the future, and the government still has not responded to the Halton review, despite the report's release almost a year ago. This tells me that the government's commitment to improving the process is superficial at best. Both major parties have, earlier this term, resisted calls that I and others have made for better spending integrity and accountability in government infrastructure spending. Flashy announcements and lack of transparency have been and continue to be key election strategies, it seems, for the incumbent, with the government even rejecting amendments based mainly on Albanese's own amendments that he put forward when he was the shadow infrastructure minister.

Enough is enough. In the coming months I'll be introducing a private member's bill aimed at improving spending integrity in transport infrastructure, and I'm calling on the government to immediately publish detailed responses to the reviews of both the IIP and the National Partnership Agreement, including releasing the IIP review in full; committing to implementing long-term investment strategies and the publishing of detailed business cases for all large-scale structure projects; and immediately acting on the recommendations of these reviews and pausing non-essential infrastructure spending until capacity has been restored. The government will try and say that the information is commercial-in-confidence, but this excuse is simply not good enough. The sector needs greater transparency and greater accountability, and it needs it now.

See this speech in context