Of all the nations in G20, Australia’s record in creating modern infrastructure is the least progressive and most inefficient.
There are two main reasons for this. One is that our outdated Federal Constitution leaves responsibility for infrastructure in the hands of State Governments, with the Commonwealth being able to influence matters only by offering finance to the States. The only exception to this is infrastructure for Defence, which is totally a Federal matter.
Equally negative is that the Commonwealth does not offer sufficient funds to meet the huge challenge that modern infrastructure demands.
Political Parties on the left and right of Federal Parliament believe they can win elections only by handing out increasing amounts of middle class welfare. The Howard Government was infamous for this. It was the most significant provider of handouts of my lifetime, wasting the profits of a decade of prosperity, instead of investing in the future through Infrastructure.
Rudd and Gillard did nothing to turn this around. In fact, they added to it, using Howard as their excuse.
This leaves us to face the historical fact that States have an extremely poor record of infrastructure investment, and they waste enormous sums of money through inefficiency. They have large bureaucracies whose main aim is to preserve themselves in jobs, while blaming the Feds for not giving them more money to waste.
Most importantly, States do not co-operate with one another in any way — the Council of Australian Governments being a place where they can attack the Commonwealth in unison, while working feverishly behind the scenes to steal Federal money from one another.
In a worthwhile attempt to get things moving, the Federal Government established Infrastructure Australia and elected a Board comprising entrepreneurial types who appointed a top ranking CEO in Michael Deegan.
They elected to prepare a national agenda of priority projects, inviting the States to submit a list of their infrastructure priorities, but this turned out to be a disaster because State Premiers merely trotted out parochial projects that they had promised the voters at their previous election, and not one of them was national in character or, in some cases, not even essential.
It was really profoundly disgraceful, especially as, when Infrastructure Australia put forward national projects for consideration, the States found insular reasons to stridently oppose them.
Because achievements to date have been far from significant, despite splendid efforts by Michael Deegan, the Abbott Government is currently implementing legislative changes to the way in which Infrastructure Australia operates, but the proposed changes are disappointingly timid, and they have made a poor start to their implementation by making Michael Deegan redundant — a genuine tragedy. They also ignore the fact that it has never been clear as to how Infrastructure Australia relates to the Department of Transport, an error that constantly causes unnecessary demarcation disputes.
My hope is that Warren Truss will scrap his legislation that is simply an exercise in making pointless changes, bite the bullet with real vision and courage in a totally new way and give the creation of desperately needed infrastructure a genuine chance of achievement.
Legislation must be introduced to make Infrastructure Australia an independent legal entity, free from political interference except for the right of the government of the day to hire and fire the Board. The responsibility of the Federal Government would be to give it a statutory allocation of funds in every Budget, ie, a percentage of gross income tax revenue which can’t be changed without new legislation being passed.
It must have full powers to implement projects without seeking approval from Federal and State Governments, except to establish a basis for working with them on implementation, while observing laws on construction and environment. The projects they implement must be national in character, ie, they cross State Borders or are State Projects considered to be in the national interest — not pork barrelling election stunts.
It must also have power to raise funds over and above its tax revenue allocation, either by issuing bonds or having authority to negotiate loan funds for particular projects at the same interest rate as the government itself would pay.
Another power it should have is to enter into public private partnerships and to privatise their projects once they are economically viable, using the sale proceeds to create new infrastructure.
Once this revolution happens, Infrastructure Australia will have the teeth necessary to achieve results. It will be free of the political small mindedness of governments that has plagued Australia for two centuries and retarded our development as a nation.
Its success will open the way for similar Authorities to be created in other neglected fields. Water is an urgent priority for independent action, as is health and education. These initiatives, in themselves, will be wonderful as all such ventures will help render State Governments to be absolutely unnecessary and we can vote them out of existence in a referendum with applause all round.
An undeniable fact is that the pension funds of the world have trillions of dollars to invest and they constantly look for a home for those funds every day. They ignore Australia because, even though our governments declare loudly, but insincerely, that they are open for business, they are so extraordinarily difficult to deal with, slow to act and tied down with endless regulations, that investors go elsewhere shaking their heads at the stupidity they encounter.
I can endorse their frustration as I have been negotiating with five governments for 18 years to build an Inland Railway that is crucial for rural development, and every year they come up with new reasons to delay it, hoping that I will die in the meantime.
There can be no doubt that if we don’t create an infrastructure revolution now, especially as voters are overwhelmingly in favour, we will go down in Australia’s history as the generation that frittered away the future for no valid reason.