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Shopping for the advice you want to hear

As the budget is about to be handed down, there is nervous optimism about a possible increase in infrastructure spending but will it go to the right projects?

At a CEDA conference in June 2013, Infrastructure Australia’s national infrastructure co-ordinator, Michael Deegan, said that groups within the public services were putting “self-interest before reform” and were “stolid, hesitant and reluctant” about implementing changes.

“You would expect that somebody, somewhere, knows all the key pieces of economic infrastructure, what is needed for the future and that all relevant land spaces are monitored, protected and planned,” Mr Deegan said.  “You would expect common sense and effective planning.  You’d be wrong.”

The Coalition came to power promising to overhaul Infrastructure Australia but what they did, almost immediately, was introduce legislation without consultation that would allow the Minister to take control over what projects the body assessed and whether their assessments would be publicly released.

Dr Deegan objected through a submission to the Senate warning that the statutory body’s independence would be compromised by such an arrangement.  The changes were “diametrically opposed” to providing the government and public with fearless and transparent advice.

In answer to a question from Senator Rhiannon about the East-West link in Melbourne, Dr Deegan provided the following information on notice:

The Victorian Government provided Infrastructure Australia with a ‘short form business case’ for the East West Link Stage One in June 2013. In this document, the Victorian Government claims the project has a Benefit: Cost Ratio of 1.4:1 if wider economic benefits are included and 0.8:1 if wider benefits are not included.

That sort of truth would not be tolerated.  Shortly afterwards, Deegan was gone.  The government appointed a whole new board and a new CEO.

Since then we have seen a plethora of reports and recommendations with yearly updates on priorities.

But the new head of IA, Mark Birrell, is of a similar mind to Mike Deegan regarding transparency.

“Governments – federal and state – have come a long way over the last decade, but still need to establish a more rigorous evidence base for infrastructure investment decisions,” Mr Birrell told the AFR’s Infrastructure Summit in June 2016.

The government has claimed they cannot release business cases because they contain commercially sensitive information. But Mr Birrell said it was still possible to release thousands of pages of documents, with governments only keeping the most sensitive numbers confidential.

With the cost of congestion in capital cities expected to rise to about $53 billion in 2031 from $13 billion in 2011 if action is not taken to address it, Birrell has called for more debate on how to best incentivise government departments and agencies to make good decisions and plan for the long term, and urged governments to take advantage of technology, such as building information modelling, when building projects.

The home page for Infrastructure Australia describes their role as following:

“Infrastructure Australia is an independent statutory body with a mandate to prioritise and progress nationally significant infrastructure.

We provide independent research and advice to all levels of government as well as investors and owners of infrastructure on the projects and reforms Australia needs to fill the infrastructure gap.

We publicly advocate for reforms on key issues including financing, delivering and operating infrastructure and how to better plan and utilise Australia’s infrastructure networks.”

So imagine my surprise when, on the Austender site, I found the Department of Infrastructure and Regional Development lodged on April 28 a call for “Tender for the establishment of a Panel for the provision of Infrastructure Advisory Services.”

Description:

The Panel will be used to provide the following advisory services relevant to infrastructure (Service Categories):
• Transport Planning, Regulation and Policy
• Economic and Financial Analysis
• Engineering and Operations Services
• Infrastructure Project Services
The Department requires expert advisory services from providers that have extensive experience and capabilities on:
(a) major infrastructure projects;
(b) government policy development; or
(c) a combination of the two.
As a guide, the Department is seeking providers that have either project-related experience on at least five economic infrastructure projects with a total project cost of $250 million or more; or have policy experience in strategic infrastructure policy at a Commonwealth, State or Territory level.

Huh?  Don’t we already have one of those?

Or are we going to shop around for a private firm who will agree that secret deals with mates in the right electorates are the way to go?

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14 comments

  1. Andrew

    Kaye,

    if you can’t get the ‘right’ answer why not.

    Don’t forget the truism in law ‘don’t ask a question you do not already have the answer for’ This is becoming the Political solution to questions based on an Ideological answer that may or may not have any evidence to support it!

    Politics by ideological numbers!!

  2. RonaldR

    Arseholes selling Australia out . Those who are big in Privatization and PPP infrastructure model get well looked after when the leave Politics or public service

  3. Kaye Lee

    The closing date for the tender is 25-May-2017 – less than one month which would tend to indicate they already have someone lined up. This is reminiscent of Trump’s approach – how many of my mates can make some money out of government infrastructure – I know, put them in charge and they can sort it out for themselves.

  4. Matters Not

    KL I’ve read and re-read the tender document and I remain perplexed. It seems that this government knows not what they want to do but still wants expert advice on how to achieve same.

    ‘Outsourcing’ takes on a much extended (and ridiculous) meaning. As does ‘government’ itself. (Bring back Tony!)

  5. Kaye Lee

    Well may you be perplexed MN.

    02 July 2013 Infrastructure Australia released today its National Infrastructure Plan, the organisation’s latest report to the Council of Australian Governments.

    http://infrastructureaustralia.gov.au/news-media/media-releases/2013/2013_07_02.aspx

    17 February 2016 Releasing the first 15 year Australian Infrastructure Plan today, Chairman Mark Birrell said Australia can get the infrastructure it needs and improve living standards and productivity, if it acts now to introduce nation-shaping reforms.

    “Our Plan sets out 78 recommendations for reform and provides a vision and roadmap to address today’s infrastructure gaps, and set us up to meet the challenges of tomorrow,” Mr Birrell said.

    http://infrastructureaustralia.gov.au/news-media/media-releases/2016/2016_02_17.aspx

    February 2017 Australian Infrastructure Plan Project and Initiative Summaries

    http://infrastructureaustralia.gov.au/policy-publications/publications/files/Australian-Infrastructure-Plan-2017.pdf

    And they still need advice??? Perhaps an explanation lays in the fact that Fiona Nash is Minister for Regional Development, Darren Chester is Minister for Infrastructure and Transport and Paul Fletcher is Minister for Urban Infrastructure – too many cooks.

  6. Matters Not

    And yes as you point out above the Budget is coming down. But with recent developments one is tempted to ask – is it going down . (Give what meaning to that as you will). Will Abbott ensure that the message Turnbull et al want to deliver gets across or will it go down ? Another political mistiming drowned out by Abbott’s now open challenge re non Cabinet appointment?

    Then there’s Gonski 2.0. Certainly a brave attempt to reset the ‘education’ debate only to see it ignite resistance on all sides. (Predictable and predicted – if one looks at an earlier discussion on this site.)

    As for: And they still need advice? yes they do and at so many levels including the moral, the political, the tactical, the philosophical, the economic, the social, the .. the ..

  7. Kaye Lee

    I think Lenore Taylor summed it up well about Gonski 0.5 – the idea of getting everyone on the same deal is ok, we can argue about the quantum later.

    Can you outsource moral advice?

    PS What’s the bet that Tony Shepherd ends up on this new infrastructure ‘panel’.

  8. Matters Not

    Can you outsource moral advice?

    Yes! If you have plenty of dollars. And no moral principles … (Don’t even try to unravel that nonsense.)

    For every difficult question there’s always an easy (glib) answer. ’tis what politics is all about

    Re Gonski. I could go on for a long time. But yes Birmingham is to be congratulated. Good policy (doesn’t go far enough) but dumb politics as Abbott is about to demonstrate.

  9. Gavin

    Good question Kaye, “As the budget is about to be handed down, there is nervous optimism about a possible increase in infrastructure spending but will it go to the right projects?”

    Firstly, what is the logic behind infrastructure spending? Depends on the decision maker:
    1. Select projects that siphon off public monies into the hands of private consortiums who may or may not (unlikely as that is) directly or indirectly benefit moir (or my family trust or my shareholding position, etc). That is how the individual gets ahead, public debt supports a self-serving vision of the marketplace;
    2. Select projects that address bottlenecks in the economy. Profits are reflected in an increase in exports resulting in a reduction in the Current Account Deficit. That is how a nation gets ahead, debt supports ventures that profits the greater public through international trade.

    After watching the implosion of a number of PPPs self-destruct (eg. Clem7 tunnel in Qld a number of years ago (http://www.smh.com.au/business/turning-3b-into-618m-brisbanes-failed-clem7-tunnel-sold-off-20130927-2uihw.html ) I have little to no confidence in IA choosing the right projects.

    PPPs are fronts for private thieves, they thrive on taking public funds, turning a loss, then selling off to arms-length vulture funds patiently lurking in the background.

    In regard to infrastructure spending (upgrades to existing facilities and new installation), both are heavily impacted by our 3rd world rate of population growth. The Garnaut Report a few years ago noted that about 40 per cent of infrastructure/service spending was related to the rapid increase in population.

    Qs: Where is Australia’s Population Policy hiding and why is that no politician can join the dots?

  10. Frank Smith

    Infrastructure! I hear this morning that WA needs hundreds of millions for rail and road projects to prop up the Liberal vote in that State. And the nation MUST spend billions for an inland rail line (not even high speed) through National Party seats. And of course we MUST provide a billion dollar rail line for Adani and National Party associated developers such as Gina in the Galilee Basin. Infrastructure – what a wonderful tool pollies have at their disposal.

  11. Kaye Lee

    And just as Scott is softening us up for the good debt bad debt budget, Eric Abetz has flagged he’ll introduce a private members bill to reintroduce the debt ceiling.

    I feel like we are going in a never-ending loop – introduce something, scrap it, reintroduce it, rename it – with never a thought of good governance intruding. It’s all about the politics.

    And with two Nationals ministers making the infrastructure decisions (Nash and Chester) expect a lot of money to go to country electorates.

  12. Kaye Lee

    Re population policy,

    In 2015, Australia’s total fertility rate (TFR) was 1.81 babies per woman. Since 1976, the TFR for Australia has been below replacement level. This means the average number of babies born to a woman throughout her reproductive lifetime (the TFR) has been insufficient to replace herself and her partner.

    Natural increase and net overseas migration (NOM) contributed 44.6% and 55.4% respectively to total population growth for the year ended 30 September 2016.

    A significant part of our population increase is due to us living longer, not because we are having more kids. That should be considered in spending decisions.

  13. Kronomex

    It’s the budget to help all Australians to “realise (there is a word missing here…oh yes…that) their dreams” have been thrown upon the shit heap of the LNP unless they are the Australians in the 10% and in particular the 1% and corporations.

  14. Freetasman

    And the new slogan is : “fairness, opportunity and security”
    So chances are that will be unfairness, misfortune and insecurity.

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