The White Paper articulates the steps being taken at a Federal level to promote the development of infrastructure within Australia.
As expected, it proposed long term planning as the policy framework. The White Paper outlines that the Government will:
“expand existing infrastructure plans by creating a long-term national infrastructure strategy that focuses on corridor planning, cross-jurisdictional networks and projects of national significance”
Over many years, many infrastructure plans, pipelines and priorities have been announced. Many of them have had the hallmarks voiced in the White Paper yet implementation remains challenging as they tend to change according to political needs and ambitions which are based on medium rather than long term planning.
Over the last decade some major infrastructure projects have reached maximum capacity far too quickly. When the Sydney Harbour Bridge was completed 80 years ago it took until the 1990’s for it to reach capacity. That was a 50 year span. Too often we are seeing critical infrastructure being expanded because the original project was designed to meet a privately sustainable finance envelope rather than built to satisfy the long term needs of communities.
It is open to the Government to now take a role in ensuring that projects are built to sustain long term needs of our cities and where this may be sub economic (for a State or Territory to manage), to help bridge the capital gap so that infrastructure is adequate for generations rather than for medium term needs.
Revising our taxation regimes to encourage more investment in infrastructure by our domestic superannuation funds and our international neighbours is a key plank of the White Paper. Our business clients will welcome the policy and we look forward to seeing a revision of the current rules in a way that will encourage funding through the whole project life of infrastructure including the construction or capital intensive phases.
What does it mean for your business?
Investors in infrastructure will welcome the policy but should wait to see green shoots of solid policy implementation before making strategic investment decisions regarding new infrastructure initiatives in Australia.
If the Government can deliver through its policy, then infrastructure delivery and ownership will become a more successful segment of the Australian economy.
In the meantime, our infrastructure industry forums will have a role to play to encourage the implementation of the policy and we expect that there will be opportunities to help develop that policy in a meaningful way; whether that is working with the Government to drive refinement of procurement methods like PPPs (where standardisation amongst the federal and State projects remains after many decades frustratingly out of reach) or in identifying new technologies or approaches to delivery of long term infrastructure.