Professional Services

The Grattan Institute calls for politics to be taken out of infrastructure

Analysts from The Grattan Institute have recommended that the Commonwealth should stop giving infrastructure funding to the states, unless they prepare a full business case to be evaluated by Infrastructure Australia and then tabled in parliament.

Their proposals, outlined in the report titled Remarkably adaptive: Australian cities in a time of growth, released last week, are among the latest to highlight the need for more transparent and robust infrastructure planning and evaluation in the country.

Grattan Institute analysts also recommends that the Commonwealth ask Infrastructure Australia to develop more realistic assumptions for cost benefit analysis, and to review and make public the benefits and costs of projects after their completion.

“The business cases for projects over $50 million need to receive a reliability rating from Infrastructure Australia, while state transport departments should put more resources into identifying modest-sized transport infrastructure proposals with higher net benefits than large projects,” the analysts said.

“Governments should not announce any projects before rigorously establishing their net benefits to the community.”

Dr Cameron Gordon, a researcher on infrastructure investment at the University of Canberra, told Government News a key issue is the inconsistency in how the states evaluate infrastructure proposals, particularly with politically important projects that are approved even when the business case doesn’t stack up.

“We often don’t have a lot of evaluation after these projects are built, which means we’re not learning what worked or didn’t work, whether we need to do something different next time,” Gordon continued.

“Authorities could incentivise local and state governments to undertake more robust planning that would meet basic specifications, but he cautioned that planning itself is no panacea for shielding decision-making from politics.

“Yes, we should have better, more consistent planning that is based on certain principles and comes with greater transparency, but planning doesn’t mean you eliminate politics. We have to make sure we have the right culture and personnel around it.”

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