In July 2013, Infrastructure Australia (the statutory body which advises governments, investors and infrastructure owners on Australia’s infrastructure issues) released Australia’s National Infrastructure Plan (Plan).

The Plan is a report to the Council of Australian Governments and aims to provide a clear set of actions for governments and the community. The proposed actions aim to prepare Australia for its infrastructure needs in the face of challenges such as climate change, closing the gap for Indigenous communities and an ageing and increasing population.

There are seven key reforms identified in the Plan:

  1. Establishing a single national infrastructure fund: Allowing governments to invest in the best projects whilst looking at the big picture for infrastructure development in Australia.
  2. Use government budgets innovatively: Structuring the financing of projects differently to encourage private sector investment (e.g. public private partnerships).
  3. Recycle capital for new infrastructure: Divesting mature public assets (such as airports, roads and ports) and using the funds to invest in new infrastructure.
  4. User pays – user says: Move away from infrastructure funded by government subsidies and encourage projects to be funded by consumers. This will lead to infrastructure that is better developed at a standard consumers are willing to pay for.
  5. Reduce layers of government: Allowing for integrated infrastructure planning across governments and streamlining the approvals process for new projects.
  6. Be world leaders in project governance: Using best practice project governance to reduce the risk of project failure or cost overrun.
  7. Smarter, leaner infrastructure procurement: Improving project procurement and the bid process to reduce costs for the government and private sector bidders to give the private sector more certainty.

The Plan recognises that governments need to encourage private sector involvement in the development and implementation of the infrastructure reforms in Australia. In our view, the private sector can assist in the implementation of these reforms, mainly through the purchase of mature public assets and innovative structuring of finance for new projects in conjunction with government funds.

Whilst the reforms and aims suggested in the Plan are commendable, implementation of the Plan will require significant action by, and cooperation between, different levels of government, which is difficult to see happening given the current political climate.