25-November-2008
Portfolio Media Releases, Infrastructure, Law and Order
The Coalition will be moving a number of amendments to the Government’s Nation Building Funds Bills to provide transparency, guarantee productivity, reveal total costs and to stop revenue gouging by the State Governments.
“The Coalition has always said they would take ‘a very hard nosed’ approach to evaluating this legislation to make sure that the hard earned surplus of the Howard Government would be spent wisely - not as a Labor slush fund to bail out failed Labor states,” said the Shadow Minister for Infrastructure and COAG, the Hon. Andrew Robb AO MP.
“Now that the Government has wiped $40 billion off its forward estimates it puts much greater emphasis on the need for quality investments. This must mean transparency.
“In their submissions to the Senate Committee considering these bills, Infrastructure Partnerships Australia has said they ‘…would like to see the funds set up to have the greatest transparency possible…If the nation-building funds were to be allocated and invested for reasons outside policy, we believe that support and appetite for much-needed Federal infrastructure investment and policy leadership would be imperilled.’
“This Bill makes no provision for detailed transparency.
“The Coalition will be moving amendments to ensure the results of all project evaluations be put on the table including cost benefit analyses, all data, assumptions and models used. It also means transparency of PPP contracts. This analysis should be made public before final decisions are taken by Rudd Cabinet.
“We remain concerned about the potential for this to be used as a political slush fund or that State Government’s may also simply remove infrastructure projects off their own books and bid for federal funds; as was the case with the NSW mini-budget when 4 projects were moved off the states books to become a bid to Infrastructure Australia,” said Mr Robb.
“This is why we have foreshadowed several amendments:
Transparency
• The insertion of ‘transparency’ clauses to require the public disclosure of all documentation (e.g. evaluation criteria, business cases, cost-benefit analysis, advisory board evaluation against criteria, etc) relating to proposed projects and
• Ensuring that all reports to the Finance Minister from the Advisory Boards and the Future Fund Board are made public.
Productivity
Given the significance the Government has rightly attached to the need to see strong productivity outcomes we propose an amendment which would:
• Require that money may only be spent on projects where the productivity outcome has been analysed by the Productivity Commission, and Commission reports published.
Funding of on-going costs
The bill also precludes funds for ongoing running or maintenance costs. This is a serious deficiency.
The Rudd Government expects ongoing costs to be met from ‘…funding by the States or Territories in relation to proposals that are brought forward as part of the COAG reform agenda.’
However, if ongoing and maintenance costs are not considered it could result in some very costly white elephants or lead to projects where no one has thought about how to meet the running costs – as was the case with the Government’s failed “Computers in Schools” program.
In the case of NSW can they be trusted to run any project at all?
• That is why we are proposing a clause which requires that all project funding decisions need to ensure that there are financial commitments from all asset owners/stakeholders to meet the “whole of life of asset” costs over the projects lifetime.
Upfront fees
The NSW Government has made an art from of seeking from private operators hundreds of millions of dollars up front as a revenue raising exercise. This jeopardises projects from the outset.
• Our amendment will prohibit the payment of upfront fees on projects.
The Rudd Government came to office 12 months ago saying they had a strong plan for Australia’s infrastructure, yet not one infrastructure decision has been taken in the first 12 months.
The legislation must be amended to ensure a totally transparent process.
Media Contact: Stuart Eaton, 0433 298 620