Infrastructure Australia wants a federation of collaboration

By Stephen Easton

Friday June 12, 2015

Philip Davies
Philip Davies

Infrastructure Australia’s new CEO Philip Davies is looking at the big picture and hoping to work closely with governments around the nation, as he leads the statutory body’s efforts to lay the groundwork for the next 15 years.

A legislative amendment last year gave IA a truly independent board, which appointed Davies in March. He started in April and the next month the organisation’s first major piece of work since the changes, the Australian Infrastructure Audit, was released.

The audit’s 81 separate findings make incisive observations about the nation’s needs and expectations, future demand, current and growing infrastructure gaps, along with suggestions for governance and policy reform, funding, social considerations and sustainability. It also makes a good fist of setting out where we need to get to and what is holding us back in transport, energy, water and telecommunications specifically.

Davies says the audit provides a “strong evidence base” for the next big job, the 15-year Australian Infrastructure Plan.

“The audit lays the foundation for us to pull together nationally significant infrastructure priorities into a plan. It gives an evidence base which allows us to articulate the full picture,” he told The Mandarin.

“We’ve done some important work reviewing business cases for specific projects. But the audit and plan allow us to start working with the states and territories to develop long-term plans to meet the forecast population and economic growth and to maintain Australia’s quality of life.”

There’s a lot to be done, and there are high hopes that IA is now better placed to fulfil the role it was originally intended to, and take some of the politics out of how governments build the cities and towns of the future.

“We have a great environment for collaboration — to actually work closely with state and territory agencies, treasuries, premiers and cabinet.”

The growing politicisation is plain, especially in transport. Victoria’s government shelled out $339 million to cancel the East-West Link project begun by the previous administration, and now in the ACT, the Liberal opposition has told consortia bidding to work on the government’s light rail project it will do the same if it wins the next local election in October 2016.

While the Prime Minister lampooned the Victorian government’s decision to pay not to build the road and warned of “sovereign risk”, the Canberra Liberals down the road thought Victorian Labor’s actions quite reasonable, even inspirational to their own plans.

IA was supposed to be above the fray of politics and put some logic back into how infrastructure priorities are chosen. But some will agree with the Australian Financial Review’s sceptical economics editor Alan Mitchell, who recently opined:

“Rudd’s Infrastructure Australia was not independent of the government. It was a fig leaf with the secretary of the prime minister’s department sitting on its advisory board.”

Mitchell goes on to argue that the amendments to the act last year were a “sham” and did not actually provide genuine independence, but an IA spokesperson told The Mandarin this was simply untrue. Mitchell claims the act still “gives the minister discretion to restrict the ability of Infrastructure Australia to examine projects” and that IA can’t publish its evaluations without ministerial approval.

The IA spokesperson pointed us to section six of the legislation, which deals with the minister’s role, and subsection four in particular, which was inserted via the amendment:

(1) The Minister may give written directions to Infrastructure Australia about the performance of its functions.

(2) The Minister may have regard to any decisions by COAG in giving directions under subsection (1).

(3) Directions given by the Minister under subsection (1) must be of a general nature only.

(4) However, the Minister must not give directions about the content of any audit, list, evaluation, plan or advice to be provided by Infrastructure Australia. [Emphasis added]

(5) Infrastructure Australia must comply with any direction given by the Minister under subsection (1).

(6) A direction given by the Minister under subsection (1) is not a legislative instrument.

‘Trusted adviser’

Of course, Davies prefers to focus on the positive, as the new boss. He says the new structure is more conducive to collaboration with public servants and politicians all over. One area he hopes IA can really help all Australian governments is by pulling in reliable expertise and identifying when more research is needed.

“How will things be different? I think the biggest change from my perspective is that we have a great environment for collaboration — to actually work closely with state and territory agencies, treasuries, premiers and cabinet, and, where they exist, which now is most states and territories, their infrastructure bodies.

“So I think there’s a unique opportunity to work together to find and articulate solutions to those big problems that we’ve identified in the audit.

“So for me, that’s the exciting thing. The opportunity to work with those bodies and actually articulate this plan.”

The argument over the ACT’s light rail project — the key issue that will define next year’s local election — has revolved around the idea of wider economic benefits, beyond the basics around the actual movement of people to and from work, school or the shops each day. Davies says business cases should have two parts: financial benefits and costs, and the “less tangible social and wider economic benefits” that can be reasonably expected to arise.

“Those aren’t always quantified, and it’s not easy to quantify some of those benefits,” he explained. “But I think, through pulling this 15-year plan together, what we’d like to do is look at some of the bigger-picture challenges and address them with more strategic solutions that create broader social and economic benefits.”

What the audit’s not saying is what the solution is … it’s identifying the problem.” 

The audit looks at the lay of the land as of 2011 and projects where the population pressure will be highest by 2031. That’s where collaboration with infrastructure bureaucrats everywhere comes in.

“What the audit’s not saying is what the solution is,” said Davies. “It’s not saying the answer to that corridor congestion or loading problem is ‘XYZ’. It’s identifying the problem, and the work now — in collaboration with state and territory agencies and infrastructure bodies — is to identify what those solutions might be.

“And it’s to identify the right solutions that can be well planned and articulated, and put together into strong business cases that look at the broader picture. The solutions must fit within the existing infrastructure and within the constraints of the environment they’re going to work in.”

Davies says his ultimate vision is for the new IA to become a “trusted adviser” to all components of the federation, helping states and territories work through potential solutions to the most pressing needs of their growing populations and connecting them with sources of high quality, independent expertise.

He’s also very enthusiastic about having the new Global Infrastructure Hub located nearby.

“It will be a great opportunity for us to work with them and to leverage some of the global networks they will be establishing. I’m particularly interested to benchmark some of our activities in Australia against other countries in terms of how we plan, deliver, maintain and operate our infrastructure assets,” said Davies. “I think it would be very useful for us to measure our own performance in the infrastructure sector against other countries.”

Read more at The Mandarin: Glenn Stevens: break infrastructure deadlock to create long-term growth

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