A little more real information about Sydney rail development is coming to light. It is not dispelling the doubts about metro. A decision on Badgerys Creek rail, which would have been straightforward without the metro, is now ‘years off’. The extent of metro disruption is becoming evident – spreading to even non-metro lines.   (more…)

The new airport at Badgerys Creek will test national competition and state transport infrastructure policies and may reveal the latter to be gravely flawed. The usual Commonwealth-state funding fight spectacle should be treated as a trivial pantomime and not distract from the serious policy issues that must be addressed and their permanent consequences for many Australians. In any event, rich spoils extracted from the public purse await the airport’s owners and infrastructure industry players.   (more…)

We are spending enormous sums on roads and increasing our national debt. Communities are being seriously disrupted and the congestion is increasing. When will we put a stop to this nonsense?  
(more…)

Commonwealth action is necessary to undo potential penalties on Newcastle Port.

While the infrastructure conversation focusses on major projects like electricity grids it can ignore more significant matters.

One such matter in NSW that deserves immediate attention is port privatisations. A deal included in the sales of Botany (2013) and Newcastle (2014) impedes the development of Newcastle Port and city. That deal also effects public confidence in privatisation.

The deal, a ‘port commitment’, is that the state government would compensate Botany for competition from Newcastle using funds from Newcastle Port. [1]

The deal reportedly requires Newcastle to pay around $100 to the NSW state Government for each container it handles in excess of an annual 30,000 ‘cap’. The cap increases modestly each year, as might also payments per container. The state government would pay this amount to the new owners of Port Botany. The deal lasts for another 47 years, yes 47 years. (more…)

The argument

Recent pieces offered a seemingly simple way forward to deal with national infrastructure issues.

It should be simple. All parties should commit to (Infrastructure Australia’s) “project” list – in part or in full – and then stop spending. These “projects” have been properly assessed and found to be worth doing, and specifically worth doing by the federal government because they have some national significance. [1]

 

Indeed, governments should limit project spending to proposals that have been properly and publicly assessed. We are entitled to know what is being done in our name and why. (more…)

This article expands on previous comments that the Williams (No. 2) case is reason to reconsider Commonwealth engagement in land transport. [1]

The challenge to Government spending programs

Williams (No. 2) was the third recent challenge in the High Court to Commonwealth Government spending.

Before these three cases it was widely assumed the Government could spend as it sees fit. Governments worked on that assumption using the equivalent of Jack Sparrow’s compass to guide them; Conservative administrations set course towards rural roads, Labor steered to cities.

The three High Court cases should consign the assumption, the compass and lack of proper Commonwealth direction to the deep. [2] (more…)

Another proposal involving high speed rail Sydney-Melbourne recently surfaced; from CLARA (Consolidated Land and Rail Australia).

Extensive media reports noted an advisory board including former Trade Minister the Hon. Andrew Robb, ex Premiers the Hon. Barry O’Farrell and the Hon. Steve Bracks , and former US Transportation Secretary Ray Lahood. A figure of $200billion was mentioned, with a claim it will not rely on government funding.

So far the outline is sketchy.There are four website pages and a sub three minute video. The idea seems to be to create a series of new cities in inland NSW and Victoria linked to the state capitals by high speed rail. It is a decentralisation plan of which high speed rail is one aspect. Decades would pass before such a plan came to fruition, if ever. (more…)

 

Road pricing is a hot topic for policy advisers although less popular with the public and elected representatives. This article attempts a (overly) simple explanation of what, why and whereto of road pricing. (more…)

 

This article is the third in a series about transport. The first two dealt with topics raised by the Prime Minister; mass transit, 30-minute cities etc and noted some challenges for the Commonwealth.[i]

Urbane Transport policy. Part 1 of 3

 Urbane transport policy. Part 2 of 3

The articles draw on public information – the basis for the community trust necessary for effective democracy. Unfortunately, some information has reduced trust. Restoring that trust begins with the top tier of Australian government – the Commonwealth – and depends on how a future Government approaches land transport. (more…)

Urbane transport policy

This article is the second in a series about transport infrastructure. Part 1 dealt with the Prime Minister’s focus on mass transit and 30-minute cities. This deals with other matters raised by the Prime Minister: value capture, city deals. A final article will deal with the Commonwealth’s role.[i]

Value capture

Value capture – levying taxes on properties improved by infrastructure projects – is not novel in Australia; contributions to local infrastructure are made for some developments. But it is relatively new for major transport projects. (more…)

In ‘Road to riches: better transport investment’ the respected Grattan Institute joined commentators, independent authorities and lobby groups in advancing ideas on transport ‘investment’. Like others it proposed publication of assessments for public spending; a better mousetrap to ensnare politically motivated proposals.

The report proposed a three stage process for government transport ‘investment’:

1. Spending only after publication, by tabling in parliament, of a benefit-cost assessment;
2. Spending on all proposals that pass such an assessment;
3. Independence of spending from Grants Commission processes.

There is merit in the ideas. There also are pitfalls.

1. Spending only after publication

This has already been proposed by various organisations.

Sensible transport spending choices can be made for many reasons, including ‘political’ ones. At times the electorate might want decisions for reasons other than ‘economic’ criteria set out in assessment manuals. Still, in a democracy it is important for the electorate to know what is done in its name and why.

The case for parliamentary tabling of assessments is compelling for the Commonwealth after the High Court’s decision in Williams (No. 2). It is less important and more questionable for the states.

2. Spending on all project proposals that pass such an assessment

According to assessment manuals an ‘economic’ transport project need not increase GDP, because benefits are often dominated by travel time savings. Investing in all ‘economic’ transport projects would bankrupt Australia.

Instead of just reducing travel time, transport should increase the ability of communities, particularly those with ingrained disadvantage, to participate in activities enjoyed by the more privileged. Such an accessibility agenda has better prospects for economic growth, fairness and community support than the current travel time paradigm that dominates transport ‘investment’ thinking.

3. Independence of spending from Grants Commission processes

The concern is that a state’s gain from Commonwealth transport gifts can be offset by reduced Commonwealth general grants.

The concern arises when the Commonwealth spends outside the national transport network, hence the issue is network definition. That the current network does not match its description is well known, easily fixed and a national disgrace.

The ‘problem’ would disappear if the network reflected the Commonwealth’s proper role. In fact, the problem would become a strength; providing Commonwealth and state governments with an incentive to focus on their respective responsibilities.

Fundamentals

Behind these specifics are fundamental questions. I become concerned when transport commentary blames politicians but ignores problems that contribute to ‘political’ decisions like:

• Some published work being embarrassingly wrong;
• Poor attitudes and discontinuity in transport policy;
• The wide gap between transport and broader public policy.

Harsh? Consider a few recent public examples relevant to major investments:

• The Productivity Commission claimed the national access regime is not intended to apply to roads. The relevant legislation gave roads as one of the two examples of infrastructure covered by the regime;
• Infrastructure Australia overlooked it’s (offices) own 2013 suggestion that all urban transport projects be tested ‘as if’ there was road pricing;
• In consecutive years Bureau of Infrastructure Transport and Regional Economics revisions to road data have been nothing less than radical;
• The High Speed Rail study purported to demonstrate a ludicrous proposition, that demand in the NSW southern highlands would be of the same magnitude as for Newcastle or the Central Coast;
• Sydney metro apparently forgot the (extraordinary) independent and expert review by Mr Ron Christie AM which warned about the ‘breaks of gauge’ it appears to making.

Other examples exist, such as reluctance to talk about true national objectives like defence or railway standardisation.

Given this it would be foolhardy to fund all transport proposals with a published positive economic assessment or that pass other tests administered by bureaucracies.

That more than just published assessments are needed is the reason for the infrastructure audit recently conducted by Infrastructure Australia. The real problem today lies in identification rather than assessment of investments.

Stability in political and commercial systems is essential for good investments. In Australia the bedrock for such stability is the Constitution.

A root cause of problems in Australian governments’ transport investment is a drift away from Constitutional concepts of federalism and separation of powers and instability in the Commonwealth’s ‘role’. That the drift continued under numerous governments suggests it is not the sole fault of politicians. The drift should have stopped with the decision in Williams (No. 2) but continues, unremarked.

The real need is to improve governance of transport by:

• Constitutionally faithful roles of: the Commonwealth in transport; the executive and Parliament within the Commonwealth. Professor Saunder’s principles warrant consideration;
• Publishing (proposed) infrastructure contracts, including those which restrain competition to established or new infrastructure;
• Applying Government Trading Enterprise reforms and the National Competition Policy to roads;
• Greater conformance with precepts such as: alignment of responsibility with power; independence of decision making from beneficiaries; public sector as protector of the public interest;
• Scrutiny of the practices of advisory institutions and departments.

A discussion on these will not be universally welcomed. However, the Grattan Institute would be helping the community and those in the transport sector by pursuing these deeper questions rather than, like so many others, just refining a mousetrap.

 

John Austen is a happily retired former official. He was Director of Economic Policy for Infrastructure Australia from its inception in 2008 to his retirement in 2014. Further background is at: thejadebeagle.com.

References

Bureau of Infrastructure, Transport and Regional Economics, Infrastructure Statistics Yearbooks 2014, 2015.

Department of Infrastructure Transport and Regional Development, High Speed Rail Study, Phase 2 Report, 2013.

Independent Public Inquiry into a Long Term Transport Plan for Sydney (Chair Ron Christie AM) Final Report, May 2010.

Infrastructure Australia, Urban Transport Strategy, 2013.

Productivity Commission; National Access Regime Final Report, 2013.

Productivity Commission; Financial performance of government trading enterprises (various).

Saunders, Cheryl and Crommelin, Michael, Reforming Australian Federal Democracy, University of Melbourne Law School Legal Studies Research paper 711, 2015.

Terrill, Marion, Roads to riches: Better transport investment, Grattan Institute, April 2016.