The release of Infrastructure Australia's first-ever Australian Infrastructure Plan (AI Plan) is a welcome addition to the public policy debate – and controversy that has plagued the infrastructure sector in recent years. Based primarily on the Australian Infrastructure Audit report published in May 2015, the AI Plan gives a robust insight into what Infrastructure Australia perceives are Australia's key infrastructure needs over the next 15 years. Infrastructure Australia has also produced an Infrastructure Priority List to be read alongside the AI Plan. The Infrastructure Priority List identifies the challenges concerning Australia's present infrastructure and sets out the case for reform. Like the AI Plan, the Infrastructure Priority List has also been prepared following consultation on the Australian Infrastructure Audit and will be updated periodically.
Who is Infrastructure Australia?
Infrastructure Australia is an independent advisory body established under the Infrastructure Australia Act 2008 (Cth)(AI Act). Its primary mandate is to prioritise and progress nationally significant infrastructure by undertaking independent research and, where necessary, advising government, investors and owners of infrastructure on ways to fill Australia's infrastructure gap. To this end, Infrastructure Australia's advisory functions are not limited to Commonwealth funded infrastructure. Rather, the body regularly provides advice to all levels of government in Australia.
Recent amendments to the AI Act implemented changes to the governance of Infrastructure Australia and the way it interacts with government. The amendments appear to give Infrastructure Australia greater autonomy and independence in exercising its powers and functions by restricting its influence by government. Notably, the amendments removed the office of Infrastructure Coordinator who was appointed by, and took direction from, the Minister for Infrastructure and replaced it with a board elected CEO (currently Philip Davis).
However, the extent to which these changes truly confer independence upon Infrastructure Australia remains to be seen and the new requirement to prepare the AI Plan must be done in consultation with the Minister.
What is the plan?
According to Infrastructure Australia, the AI Plan has been developed to identify infrastructure reforms and investments that achieve the following goals:
- to strengthen Australia's role in the global economy;
- to enhance the liveability and productivity of its cities and regions; and
- to support a transition to a more sustainable and resilient economy.
The AI Plan offers a number of recommendations to achieve these goals. A majority of the recommendations suggest ways by which key stakeholders, including investors, developers and users, can influence reform within Australia's infrastructure industry. In particular, the AI Plan identifies the value that leveraged government investment can have in driving broader economic reform and productivity within the economy. It flags that Federal government funding of infrastructure projects should be conditional upon the satisfaction of pre-determined outcomes or milestones throughout the project's lifecycle. In this way, such 'project-specific conditions' appear to be conceptually analogous to the provision of tied grants by the Federal government to the States. By adopting such an approach, Infrastructure Australia considers it likely that government will be able to more actively implement the AI Plan's recommendations.
It is also worth noting that the AI Plan is intended to respond to changes in Australia's infrastructure needs by being revised every 5 years at the least.
The Infrastructure Priority List
The Infrastructure Priority List provides a helpful overview of the major infrastructure problems and provides brief details of projects intended to address such problems which Infrastructure Australia considers to be of priority to achieving the goals set out in the AI Plan. Due to its breadth of scope, the Infrastructure Priority List is essentially broken down into two sections – initiatives and projects – with each section further broken down into 'priority' and 'high priority' categories. In essence, an initiative addresses a nationally significant need or problem for which a deliverable solution has not yet been developed, whereas projects are those initiatives that have undergone a full business case assessment and include a robust option for delivery.
Inclusion on the Infrastructure Priority List occurs only after assessment by the Board of Infrastructure Australia, which involves the Board's application of Infrastructure Australia's assessment framework.
How are projects included on the Infrastructure Priority List?
Infrastructure Australia has developed and published a high-level overview of the assessment framework and a suite of templates to assist government organisations that wish to nominate potential infrastructure solutions for inclusion on the Infrastructure Priority List. The Framework is comprised of five sequential stages, with Infrastructure Australia formally assessing submissions at the Stage 2 (initiative identification) and Stage 4 (business case assessment). Broadly, Stage 2 involves assessing whether an initiative is a strategic fit (through addressing evidence-based problems and opportunities of national significance), whereas Stage 4 goes further by also considering the deliverability and economic, social and environmental value of a proposed project.
After submissions are assessed in the first instance by an Infrastructure Australia designated assessor, that assessment is reviewed by Infrastructure Australia's Assessment Panel (chaired by its CEO) and, based on that review, the CEO may then make a recommendation to the Board for a final determination of inclusion.
Moving to a more mature debate
For those optimists out there the AI Plan and the Infrastructure Priority List is a sign of a maturing infrastructure policy debate that attempts to de politicise infrastructure policy through greater independence for Infrastructure Australia and a more transparent and publically available infrastructure policy.
Clearly, Infrastructure Australia sees its role as an independent advisory body to government but also recognises that Federal support for State sponsored infrastructure projects can help drive the Federal government's reform agenda. The AI Plan flags that the Federal government's support may be conditional on project specific conditions that drive its broader reform agenda. What those project specific conditions will be and the level of support the Federal government will offer, no doubt will keep infrastructure on the political agenda although it is hoped the debate will increasingly be shaped by a more mature policy framework.