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

On behalf of the Standing Committee on Infrastructure and Communications I present the committee's report, incorporating a dissenting report, entitled Planning, procurement and funding for Australia's future infrastructure—report on the inquiry into infrastructure planning and procurement, together with the minutes of proceedings, and I ask leave of the House to make a short statement in connection with the report.

Leave granted.

On behalf of the Standing Committee on Infrastructure and Communications, I have the pleasure of presenting the committee's report on the inquiry into infrastructure planning and procurement.

The delivery of infrastructure to support a growing and demographically diverse population will drive productivity and improve living standards for all Australians. In assuring all stakeholders—the community, governments and business—that the nation's future infrastructure needs can be met, it is incumbent upon all governments to ensure appropriate planning and procurement processes are developed and instituted. These should be complemented by value for money funding and finance mechanisms.

The committee was tasked with reviewing the Australian government's response, in an infrastructure sense, to a variety of factors, including demographic change, increasing fuel costs and housing affordability. The committee has heard some compelling evidence to suggest changes in the way the government addresses infrastructure planning and funding.

The inquiry into planning and procurement received many submissions from a wide range of interested parties: from government departments to peak industry bodies and advocacy groups. Many of these appeared as witnesses at the 12 public hearings overseen by the committee, and on behalf of the committee I wish to thank them for their time and expertise.

The committee's report examined the planning of infrastructure, recommending that improved coordination and harmonisation of Commonwealth, state and territory-based processes be undertaken. The way our Federation is framed can lead to duplication of services and this leads to duplication of process, which is costly in both time and money.

The committee is mindful of the constitutional arrangements in our country, but also believes greater effort in reducing duplication is needed. The committee emphasised the importance of identifying a long term pipeline of infrastructure projects to provide certainty for stakeholders regarding future planning. In developing this pipeline, the committee notes a recently announced expansion of Infrastructure Australia's functions. The committee further recommended that, where required, relevant land corridors be identified and preserved to meet future infrastructure needs.

There are significant opportunities to encourage investment in infrastructure through various models. However, numerous submissions indicated there is limited technical capacity within Commonwealth departments, causing substantial increases in cost and risk to both taxpayers and investors.

The committee recommended that the Australian government develop innovative financing and funding models for the development of public infrastructure, providing flexibility and the ability to respond to associated costs and inherent risks. In particular, closer consideration should be given to options, including forward tax incentives, user charging, inverted bidding, infrastructure bonds and capital recycling.

The committee also made recommendations for procurement reform. It called upon the Australian government to consider innovative procurement practices, including promoting the use of Building Information Modelling, BIM, and co-funding the design or purchase of intellectual property rights, particularly where they form part of an innovative infrastructure tender proposal. The recommendation also called for the streamlining and centralising of elements of the tender process and the debundling of project elements to allow greater competition between industry participants.

The committee also made some recommendations aimed at Infrastructure Australia's involvement in the infrastructure procurement process, including improving their technical capability and the appointment of a chief engineer. Having the technical capacity to determine the most appropriate infrastructure design, construction and procurement model on a case-by-case basis was considered critical when dealing with large projects. It was recommended that a methodology be developed and applied to evaluate the wider economic benefits of infrastructure projects receiving Commonwealth funding of over $100 million. It was further recommended that the role of Infrastructure Australia as a specialist procurement agency be enhanced, allowing the provision of policy advice and support to government agencies undertaking infrastructure procurement.

The committee was mindful of the recently released Productivity Commission report entitled Public Infrastructure and was careful not to duplicate the commission's findings but rather identify ways those findings could be expanded upon or enhanced. An outline of the commission's findings appears on pages 2 and 3 of this report, and I recommend that they be read in conjunction with this report.

Finally, I would like to thank the individuals and organisations who made contributions to the inquiry both through submissions and through appearances at public hearings. The committee has made 10 recommendations we feel will progress the planning and procurement crucial for the infrastructure of Australia. As chairman, I wish to acknowledge members of the committee who brought their varied experience to bear during an inquiry that covered a number of complex matters. It is clear that there is a need for significant structural change to current processes in the planning, procurement and funding of infrastructure in Australia, and it is hoped that the recommendations of this committee contribute to further reform in this area.

On behalf of the committee I also wish to thank the committee secretariat for their hard work in supporting the committee during this Inquiry.

On behalf of the committee I commend the report to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

by leave—I wish to add to the remarks of the chair, Ms Prentice, and in doing so acknowledge Ms Prentice for her great work in chairing this committee. The Labor members of the House of Representatives Standing Committee on Infrastructure and Communications do agree with most of the recommendations contained in the report. However, we have sought to add two recommendations in a further report of the committee. Throughout the course of the inquiry, having heard from many of the stakeholders and experts, we did develop a firm appreciation of the progress that has been made and some of the challenges in delivering infrastructure in Australia. The challenge of delivering productivity enhancing infrastructure in Australia in an efficient manner is really subject to the foibles of Federation. Generally, having three levels of government responsible for planning, designing, financing and construction of infrastructure presents significant challenges. Many of the witnesses submitted their frustration at having to deal with the three levels of government, particularly around planning in respect of building infrastructure.

The report makes recommendations that largely build upon the good work of Labor when we were in government, through the former Minister for Infrastructure and Transport, the Hon. Anthony Albanese, and agreement was reached on most of the recommendations and the bulk of the report. However, Labor members thought that certain elements needed strengthening and that recommendations around a couple of issues needed to be more robust.

The main points in respect of Labor's dissenting report are that the government should continue to use its leadership position via COAG to drive better practices around infrastructure project identification, planning and selection to align particularly with recommendations 7.3 and 7.1 of the Productivity Commission's public infrastructure inquiry.

Further, Labor members of the committee submit that the government must legislate to establish an authority that transcends the electoral cycle to work with the states, territories and local governments and particularly rail experts to preserve a corridor for east coast high-speed rail but, more generally, for other national road and rail projects.

This was a point that was made by many witnesses to the inquiry, including the member for Bennelong and the former Deputy Prime Minister of Australia, Tim Fischer, who, we all know, is a passionate advocate for rail and the greater use of rail in Australia and, indeed, high-speed rail. In his submission to the inquiry he had this to say:

Capital City HSR “corridor close out” continues to occur, notably with some near disgraceful planning approvals around outer Melbourne, especially the dogs muddle unfolding at Donnybrook. Significantly international interest remains high re HSR possibilities including investment in Australian HSR by overseas interests but the clock is ticking. Now is the time for some bold decisions, now or virtually never.

It is wonderful to see that the former Deputy Prime Minister has not lost his penchant for colourful language and, indeed, his passion for high-speed rail. I thought the remarks in his submission to the committee were quite notable. Former Prime Minister Tim Fischer talked about getting on with the job of actually preserving a corridor for high-speed rail and we recommend that the government take up his suggestions. When you talk about visionary infrastructure projects, you can see that this is one that will bring tangible benefits in terms of productivity enhancement to the east coast of Australia. It is a long-term project but we need to get on with the job of preserving the corridor now. The recommendation that Labor members make in this report is for the government to support the establishment of a Commonwealth authority to work with the states and experts to do that.

We also say that government education and training policy needs to anticipate increased demand for local infrastructure planning, procurement and delivery skills and should have a skills supply policy that anticipates demand.

Governments should note considerable and detailed Productivity Commission criticism of the structure of the Asset Recycling Initiative and its potential to incentivise privatisations of monopoly assets without adequate consumer and community protections. So Labor members have made a recommendation in respect of asset recycling. It relates to what the Productivity Commission had to say about the potential foibles of asset recycling.

Further, we say that the government should fund projects on a more neutral basis to avoid distortions and inefficient investment decisions. That includes funding urban passenger rail projects when identified as the best solution to congestion problems. Just funding road projects sends a signal to cash-strapped states that roads are preferred and are cheaper. That has been noted by Infrastructure Australia as distortionary and something that Labor members support.

Finally, Labor members submitted that the government should ensure that all projects with a capital value of over $100 million have a cost-benefit analysis, assessed by Infrastructure Australia using a standard method capable of comparison across projects, and that the evaluation should inform funding decisions and therefore should occur prior to any proposed allocation of funds.

I thank other committee members and, in particular, I pay tribute to the staff of the secretariat and thank them for their wonderful work.

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

I move:

That the House take note of the report.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.