Productivity Commission Inquiry: Public Infrastructure 2014 The Inquiry examined ways to encourage private financing and funding for major infrastructure projects and investigated costs, competitiveness and productivity in the public infrastructure sector. Key Findings related to freight and supply chains Key Recommendations Australian Government Response Project Selection An urgent need existed to examine the decision making processes for assessing and developing public infrastructure to avoid poor investment choices and inefficient provision of infrastructure; Private sector involvement in infrastructure funding and provision should be well designed and implemented in order to deliver efficiency gains. Jurisdictions should have best practice institutional and governance arrangements for infrastructure provision, including processes, procedures and policies for planning and selection projects; Transparent, innovative and competitive processes should be used in the selection of private sector partners; Regular monitoring of project performance and review of funding policies including user charges; Rigorous analysis for all public infrastructure projects over $50 million. These should be These recommendations were largely supported by the Australian Government. The threshold for cost-benefit analysis was retained at the existing $100 million benefit
released publicly and made available to bidders in competitive tenders; Australian Government funds should only be forthcoming where the jurisdictions have adopted these processes and governance arrangements. Privatisation of infrastructure Governments in Australia have successfully privatised ports, airports and utilities and should consider privatising any remaining assets of this type. The Commission recommended the privatisation of major ports, and investigation into the potential for privatising the Australian Rail Track Corporation (ARTC) and Air Services Australia. The Australian Government supported in principle the privatisation of mature infrastructure assets, and undertook to make detailed consideration for the sale of Commonwealth owned assets. User Charging User charges should be used to the fullest extent that can be economically justified, recognising that governments will still need to full or partly fund some infrastructure. The formation of Road Funds by state and territory governments; and Investigation into the use of vehicle telematics for distance and location charges for light vehicles as well as heavy vehicles, with a view to inform future consideration of These recommendations were supported in principle by the Australian Government as longer term reform options.
direct user charging and hypothecation to roads for funds arising from the measure. Information collection and dissemination Data limitations restrict comparisons of project and other benchmarking parameters. Fund the development of a detailed benchmarking framework for major infrastructure projects, including transport projects, supported by collection of data from funded projects; Provision of data should be a requirement for all major infrastructure projects funded by the Australian Government and other governments; Infrastructure Australia (IA) should not be restricted from publishing information on evaluated projects unless commercial harm could result. The Australian Government supported the regarding benchmarking data and data acquisition. It was that legislative amendments to reform Infrastructure Australia had overtaken that recommendation and IA is expected to publish its reviews of infrastructure projects.
on producers, and results in pressure on alternative road networks. Road pricing reform will help address pricing distortions between road and rail networks; Efficient are crucial for primary producers – privatisation of major ports can give efficiency gains; Current barriers to entry to Australian ports for foreign vessels should be removed to increase competition and reduce prices. extended validity for permits. Harper Competition Review 2015 The Harper Competition Review undertook a stocktake of competition policy with the aim of improving the Australian economy through recommending reforms to competition policies, laws and institutions. Key Findings related to freight and supply chains Key Recommendations Australian Government Response Roads are the least reformed of infrastructure sectors, with little change to institutional arrangements around Introduce road pricing using new technologies, subject to independent oversight, with revenues used for road construction, The Australian Government supported the road pricing recommendations as a long term reform option and will continue working through
Funding Road network funding has weak links between usage and charging; Not enough is invested in maintaining and renewing our current transport infrastructure; Funding of land transport is the most significant opportunity for policy reform in the infrastructure sector. Require consideration of whole-of-life costs for projects seeking government funds; Government to commit to full implementation of a heavy vehicle road charging structure in the next 5 years and a light vehicle charging structure in 10 years; Continue incentives for asset recycling; Review capacity to increase public borrowings for an infrastructure investment program. The Australian Government generally supported recommendations, noting that it will collaborate with state and territory governments on charging regimes. Better Decisions and Delivery Failure to protect corridoes increases Long term planning needs to be improved; Integrated planning across all levels of government is needed. State and territories to produce infrastructure plans; Establish effective corridor protection mechanisms for future infrastructure priorities; Increase funding for development of projects identified in the The Australian Government generally supported these recommendations, noting that they are matters for state and territory governments.
Infrastructure Priority list. White Paper on Developing Northern Australia, 2015 The Paper lays out the policy framework to create successful business and investment environments, invest in infrastructure, access natural assets, reduce employment barriers and improve governance in northern Australia. Key Findings related to freight and supply chains Australian Government Response Most northern Australia infrastructure has been provided by the private sector a user pays principle; In areas where it is difficult to charge users or where there are broader social benefits, there is a role for governments to support development; Individual jurisdictions face reduced incentives to prioritise projects where benefits cross borders. The Paper included the following commitments: $5 billion in concessional loans for projects through the Northern Australia Infrastructure Facility; $600 million for priority road projects in northern Australia including consideration of the Great Northern Highway, Arnhem Highway, Flinders Highway, Barkly Highway, Hann Highway, the Outback Way and the
proportion of overall costs to farmers; Much of the freight task is time critical. Government supports better road transport through the funding for major investment projects, Black Spot projects, the National Highway Upgrade programme and the Roads to Recovery programme; The Australian Government is working with the states and territories to address first and last mile issues, including improving access for higher productivity freight vehicles; $1 million was provided for improvements to CSIRO’s TRANSIT tool to support future transport investment for
spatial analysis; effective pricing, operation and resource allocation. National Ports Strategy 2012 The Strategy recognised there was room for improvement in port operation through a more collaborative national approach by governments and industry. The strategy intended to drive the development of efficient, sustainable ports and related freight logistics that together support the needs of a growing Australian community and economy and the quality of life aspirations of Australians. Key Findings related to freight and supply chains Key actions Status Long term integrated plans will help attract public and private investment in ports; Reform can remove barriers to reduce transaction costs, increase competition and contestability and provide linkages to domestic and global value chains; A national strategy would drive greater efficiencies That COAG agree to: Identify the relevant ports, landside links, nodes and sea channels; Develop long term integrated master for ports guided by best practice, with consideration of plans by an expert panel; Develop streamlined environmental management and assessment processes; The Australian Government, along with other COAG governments, endorsed the Strategy in July 2012. National key freight routes map was released in PDF form November 2014, then as an online, interactive map in 2015. Port master masterplanning guidelines were released by industry in 2013 with Commonwealth input on environmental
with limited alternative energy sources for the immediate term; New infrastructure corridors are needed that balance efficiency with urban amenity; Government fiscal constraints will put pressure on budgets and infrastructure spending; Opportunities will be created through technological developments and innovation and regulation and policies need to encourage these. projects to address specific impediments; Commonwealth co-funding for first and last mile projects; Trial the Performance Based Standards (PBS) route assessment tool to assist local government decisions on heavy vehicle access; Review the economic impact of the national transport regulation reforms; Produce freight data through BITRE; Enhance community engagement on the value and importance of freight. strategies released by most jurisdictions. First/last mile assessment tool released to local government. Productivity Commission review of national regulation to occur in 2019. Commodity freight data collection and reporting improvements. Compendium released of existing research on community attitudes to freight. Smart Cities Plan 2016 The Plan sets out the Australian Government vision for our metro and regional cities to support productive, accessible, liveable cities that attract talent, encourage innovation and create jobs and wealth. It has three pillars: smart investment, smart policy and smart technology. Key Findings related to freight and Australian Government Response
supply chains Infrastructure funding is a long term investment; Innovative financing can deliver more infrastructure sooner; New technology has the potential to revolutionise how cities are planned and function, and how the economy grows; Australia needs to plan for the future of regional cities to maximise their potential and support long term growth. Develop City Deals that unlock public and private investment in key economic centres. States and territories will be invited to participate in City Deals; Collect and analyse data on the performance of our cities to measure the impact of policies; Support investments in sectors commercialising new innovation to grow the economy; Provide funding for infrastructure planning to accelerate planning on major infrastructure projects; Establish an Infrastructure Financing Unit to develop funding and financing solutions.