The report to COAG released today by Infrastructure Australia is an important step towards greater transparency in assessing the merits of major projects under consideration by state governments, said Business Council of Australia (BCA) Chief Executive Jennifer Westacott.
“The information in the report shines a light on the detailed assessment process now in place to inform Infrastructure Australia of the costs and benefits of each project,” said Ms Westacott.
“It also highlights the significance of measures announced in the federal Budget in May to strengthen the capacity and independence of Infrastructure Australia (IA).
Ms Westacott said that, significantly, the IA report underlines the role state governments should play in undertaking rigorous and transparent cost–benefit analysis of projects being considered. “With IA depending on the states for information on these analyses, the report shows there is more to be done by state governments to assure the community that public spending decisions are underpinned by thorough assessment.
“Consistency of approach in the way states complete cost–benefit analysis of major projects is essential so IA is able to transparently assess the significance of the projects and their contribution to the economy.
The report reinforces the need for transparent and thorough project cost–benefit analysis before the projects are deemed ready to proceed. This analysis should be publicly available.”
Ms Westacott said the publication in 2008 of the Victorian Government’s analysis of the transport infrastructure options for the east-west link had provided a model of comprehensive, transparent project assessment.
“Thorough cost–benefit analysis is the only way to ensure that projects being advanced for public funding are the best projects for the social and economic development of Australia,” she said.
“The identification of $86 billion worth of infrastructure projects should also provide a wake-up call to all governments that they need to find ways of moving those of greatest benefit to implementation, including through partnerships with the private sector.
“The IA report identifies reforms the BCA has been calling for some years, including the need for governments to improve the efficiency of Australia’s infrastructure markets and create a better environment for private investment in infrastructure.
“IA has raised some important issues for the COAG agenda because it is only through intergovernmental cooperation that much needed infrastructure reform is going to happen.”