The Business Council of Australia looks forward to hearing whether its proposal for a Productivity Commission inquiry into major project assessment and construction costs has the backing of the Council of Australian Governments (COAG).
Scoping reports prepared by federal and state officials are due by the end of this week and BCA Chief Executive Jennifer Westacott says she is hopeful a full inquiry will get COAG’s backing.
“It is critical that we are able to benchmark Australia’s performance in delivering major projects and some of the key costs associated with them because, to a large extent, they will determine our economic success over the next decade and beyond,” she said.
In his budget speech on Tuesday, the Treasurer reinforced the importance of capital investment in driving Australia’s future economic growth by citing the $456 billion investment pipeline in the resources sector.
In a paper prepared for COAG’s inaugural Business Advisory Forum last month, the BCA highlighted the significant costs imposed on businesses and governments due to planning delays.
“Delays to major projects not only cost business, but also governments and the community”, said Ms Westacott.
“Research for the BCA also reveals that resources projects are 40 per cent more expensive to deliver in Australia than in the United States Gulf Coast”, she said.
“Australia cannot afford to be complacent in assuming that all projects in the investment pipeline will be delivered”, said Ms Westacott.
“The first step is to understand Australia’s performance in delivering major projects so that governments can make sure they have all the right policy settings in place.”
Ms Westacott said that a Productivity Commission study could examine all the factors involved in delivering major projects to world’s best standard in terms of cost and timeliness, including:
• the supply of labour, skills and equipment
• workplace relations and productivity
• the provision of infrastructure
• funding and finance
• project management.
“Australia’s economy is undergoing the most significant transition in decades. The wellbeing of Australians will be dependent on the efficient delivery of investment opportunities associated with this transition.
“Members of the BCA play an important role and we look forward to working alongside governments and COAG to deliver the best results for Australia.”