Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Hansard source

I move opposition amendment (70) on sheet 5684:

(70)  At the end of Schedule 1, add:

Productivity Commission Act 1998

2  At the end of Part 4

Add:

Division 3—Nation-building Funds projects

        (1)    The Commission must, as soon as practicable after the end of each financial year, prepare and give to the Minister a report on the projects approved during that financial year under the Nation-building Funds Act 2008.

        (2)    A report under subsection (1) must include but is not limited to:

             (a)    the productivity benefits expected to result from the projects; and

             (b)    any cost-shifting by a State or Territory that is expected to result from the projects; and

             (c)    any other matter connected with the projects to which, in the opinion of the Productivity Commission, attention should be directed

        (3)    The Minister must cause a copy of a report prepared under subsection (1) to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

Amendment (9) relates to schedule 1, amendments of other acts, so our amendment seeks in that context to provide for an amendment to the Productivity Commission Act 1998, as set out in our particular amendment. That amendment is very important and I hope will be supported because it seeks to address those two critical issues I talked about earlier: how we ensure that we are objectively measuring the productivity benefits of the infrastructure investments proposed from these funds and how we ensure that we minimise and expose to the light of day the potential for cost shifting to the Commonwealth by a state or territory.

We believe the best way to do that is to, as in this amendment, amend the Productivity Commission Act to require the Productivity Commission at the end of every financial year to prepare a report on the projects approved during that financial year under these nation-building funds acts. That report would include, but not be limited to, the productivity benefits expected to result from the projects, any cost shifting by a state or territory expected to result from the projects and other matters connected with the projects to which, in the opinion of the commission, attention should be directed. We think the Productivity Commission is the best placed independent and objective analytical body to undertake what we think are necessary public interest functions with respect to expenditures from these funds.

We have heard much from the Rudd Labor government about the importance of their infrastructure spending for enhancing productivity in this country. We take them at their word. We support those objectives. It was always an objective of our government to enhance productivity in this country, and there is no denying that good infrastructure projects can enhance the productivity of this country. But we do believe that that needs to be measured, not asserted. The best way to measure the outcome of projects that are approved and acted upon by the government under these nation-building funds is to have the, appropriately named, Productivity Commission assess the productivity benefits, which the government asserts are its priority, its whole objective, in these infrastructure investments. But the government has not indicated to us how it is going to have objective, publicly reportable measures of the productivity benefits to be gained from these multibillion-dollar investments. Here is the perfect way to do it. We think this is a very important part of this whole approach to infrastructure investment.

The other critical factor, which we have talked about before, is how we go about ensuring that we avoid a situation where there is, in effect, no net new investment in this country. Australia will gain nought from any outcome which involves the Commonwealth simply replacing state and territory investment. We have already seen the New South Wales government indicating that it is going to withdraw some of the projects that it had in its infrastructure forward plan because now it is going to submit them to the Commonwealth and get the Commonwealth to pay for them. That means there will be no net new investment in Australia if that were to occur.

We have to do all we can to identify that risk, and the best way, again, for that to be done is by the federal government body best equipped to identify, through economic analysis, the risk of that sort of thing occurring. There is no other proposition before the Senate or the parliament to identify cost shifting, a risk that could well result from the advent of these nation-building funds. So I do commend this amendment to the Senate because I think it will be a very important part of the transparency and accountability of the public funds involved.