Response to Productivity Commission Draft Report on Public Infrastructure

“The Productivity Commission’s Draft Report on Public Infrastructure highlights there is no quick fix to Australia’s infrastructure challenges”, Business Council of Australia Chief Executive Jennifer Westacott said today.

“The commission’s report is consistent with the BCA’s recent work on infrastructure funding and financing, highlighting that action is needed on a range of fronts by government and industry to address our major infrastructure shortfall,” Ms Westacott said.

“The report reinforces what the BCA has been saying for some time, that we need much better data about infrastructure costs and benefits so we can more effectively plan for and deliver the infrastructure we need.

“The report makes an important contribution to shaping a much-needed and comprehensive agenda for infrastructure reform, including better project selection, more efficient and sustainable project funding and lower-cost project delivery in Australia.

“The report appropriately highlights the importance of improved project selection based on cost–benefit analysis, user charges to provide a sustainable and efficient funding source, and the opportunities for efficiency gains from private investment so long as we get right public–private models of procurement and risk sharing.

“The report strongly backs privatisation of infrastructure in the electricity and port sectors.

“Given the report argues that the proceeds of privatisation should not necessarily be recycled into new infrastructure projects, it will be important in the final report to demonstrate other practical approaches that can meet the needs of the economy and the community.

“The report’s strong focus on new models of road pricing highlights that market-based reforms in the road transport sector significantly lag other infrastructure sectors and should be prioritised.

“The commission has reiterated concerns by the BCA that input costs for infrastructure projects have risen due to a wide range of reasons, and also backed the BCA’s longstanding calls for governments to improve data collection and benchmarking of project costs.

“If we can get a better handle on the drivers of project input costs and address them, we can get better value for money and lift productivity in the construction sector and across the wider economy.

“Clearly, based on the number of requests for further information in the commission’s report, there is still considerable work to be done to finalise the findings and recommendations, and we look forward to further engagement with the commission as it completes its work,” Ms Westacott said.

Matt Newton, Communications Adviser
Business Council of Australia
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