3. Under the Infrastructure Australia Act, the Infrastructure Australia Council consists of a Chair and eleven other members. The Minister appoints the Chair and the other members of the Council by written instrument made under the Act.4 The Chair of the Infrastructure Australia Council, Sir Rod Eddington, was announced by the Minister for Infrastructure, Transport, Regional Development and Local Government on 26 February 2008.5 The other eleven members of the Council were announced on 19 May 2008.6 The Infrastructure Australia Council has the statutory role of providing advice to the Minister for Infrastructure, Transport, Regional Development and Local Government (the Minister) on infrastructure matters, including the development of priority lists.
4. The Infrastructure Coordinator (a statutory office holder also appointed by the Minister under the Act) supports the Council in the performance of its functions. The Infrastructure Coordinator is appointed by the Minister on a full‐time basis for a period not exceeding five years. The appointment of the inaugural Infrastructure Coordinator, Mr Michael Deegan, was announced on 22 June 2008, with his role formally commencing on 1 July 2008.7
5. The Office of the Infrastructure Coordinator supports the Infrastructure Coordinator.8 As well as a small number of permanent staff members (16 as at October 2009, including four staff in the Major Cities Unit) and secondees from State and Territory governments, a range of external advisors are engaged as required.
6. Infrastructure Australia is a departmental body recognised in legislation and is neither a prescribed agency under the Financial Management and Accountability Act 1997 nor a statutory authority under the Commonwealth Authorities and Companies Act 1997. Accordingly, the Office of the Infrastructure Coordinator operates within the legal framework of the Department of Infrastructure, Transport, Regional Development and Local Government (DITRDLG). Specifically:
• staff are engaged under the Public Service Act 1999, and are employees of DITRDLG; and
• financial reporting is consolidated within the annual financial statements of DITRDLG.
7. The May 2008 Budget included $20 million over four years to fund the Office of the Infrastructure Coordinator, with $0.5 million for 2007-08 and $6.5million in each of the remaining three years. A further $1.0 million per annum was provided for the Major Cities Unit, located within the Office of the Infrastructure Coordinator.9 In announcing the Infrastructure Australia funding, the Budget Papers stated that:
The Government will provide $20.0 million over four years to establish Infrastructure Australia, a statutory advisory council with twelve members drawn from industry and government, to work on developing long term solutions for infrastructure bottlenecks and investment in the nation's transport, water, energy and communication assets.
Infrastructure Australia will conduct audits of nationally significant infrastructure; develop an Infrastructure Priority List to guide public and private investment; and provide advice on regulatory reforms that can improve the utilisation of infrastructure networks. In developing the Infrastructure Priority List, Infrastructure Australia will assess projects in terms of specific goals, such as, meeting water and energy needs; traffic congestion in our major cities; efficiently moving freight from regional areas to our ports; and meeting the challenge of climate change.10
8. The May 2008 Budget Papers also included a statement focussing on the scope for improved policy and institutional frameworks for infrastructure investment, and investment in skills and training, as these were seen as areas where there was significant scope to lift Australia's productive capacity. Of direct relevance to the work of Infrastructure Australia, in this statement, the Government:11
• recognised that, where governments invest in infrastructure assets, it is essential that they seek to achieve maximum economic and social benefits, determined through rigorous cost‐benefit analysis including evaluation and review;
• stated that only public infrastructure projects which at least meet a minimum benchmark social rate of return determined through rigorous cost‐benefit analysis, including evaluation and review- should be funded, and relative social rates of return above the minimum benchmark should be used to prioritise the funding of projects;
• committed to efficient public infrastructure investment through the development of coordinated, objective and transparent processes for decision‐making based on thorough and rigorous cost‐benefit analysis. Key elements of such an approach were seen as including decision‐ making based on rigorous cost‐benefit analysis to ensure the highest economic and social benefits to the nation over the long‐term and a commitment to transparency at all stages of the decision‐making process; and
• outlined that Infrastructure Australia had been established to improve processes around the assessment of infrastructure investment decisions. Specifically, the Budget Papers stated that:
To improve processes around the assessment of infrastructure investment decisions, the Australian Government established Infrastructure Australia to advise governments on nationally significant infrastructure. Infrastructure Australia's advice will be based on rigorous analysis of the costs and benefits of various infrastructure proposals. Infrastructure Australia will identify strategic investment priorities and policy and regulatory reforms to facilitate timely and coordinated delivery of infrastructure investments of national importance between all levels of government and industry. Infrastructure Australia's immediate priority is to complete a National Infrastructure Audit by the end of 2008, and develop an Infrastructure Priority List for COAG consideration in March 2009. It is also to develop best practice guidelines for Public Private Partnerships for COAG consideration by October 2008.12
9. Decisions about whether to invest in projects are taken by governments and industry, having regard to the advice of Infrastructure Australia, amongst others.
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4 The Act sets out a number of requirements in relation to the composition, background and skills of Council Members that the Minister must ensure are satisfied in making appointments to the Council.
5 The Hon Anthony Albanese MP (Minister for Infrastructure, Transport, Regional Development and Local Government), Sir Rod Eddington appointed to head Infrastructure Australia, Media Release, 26 February 2008.
6 The Hon Anthony Albanese MP (Minister for Infrastructure, Transport, Regional Development and Local Government), Membership of Infrastructure Australia, Media Release, 19 May 2008.
7 The Hon Anthony Albanese MP (Minister for Infrastructure, Transport, Regional Development and Local Government), Appointment of Infrastructure Coordinator, Media Release, 22 June 2008.
8 For the purposes of this audit report, the term 'Infrastructure Australia' is used to refer jointly to the Infrastructure Australia Council, the Infrastructure Coordinator and the Office of the Infrastructure Coordinator. Otherwise, the report explicitly refers to the relevant party.
9 The $6.5 million budget allocated to the Office of the Infrastructure Coordinator is required to meet any budget deficits of the Major Cities Unit. Departmental outputs are appropriated as a single amount for each entity, such that the $7.5 million per annum annual funding for the Office of the Infrastructure Coordinator (including the Major Cities Unit) is able to be used to fund any departmental expenditure in the Department of Infrastructure, Transport, Regional Development and Local Government. In this context, corporate overheads for 2009-10 are expected to be some $1.876 million.
10 Budget Paper No. 2 2008-09, Budget Measures, circulated by The Honourable Wayne Swan MP, Treasurer of the Commonwealth of Australia and The Honourable Lindsay Tanner MP, Minister for Finance and Deregulation of the Commonwealth of Australia for the information of Honourable Members on the occasion of the Budget 2008-09, 13 May 2008, p. 266.
11 Budget Paper No. 1 2008-09, Budget Strategy and Outlook, circulated by The Honourable Wayne Swan MP, Treasurer of the Commonwealth of Australia and The Honourable Lindsay Tanner MP, Minister for Finance and Deregulation of the Commonwealth of Australia for the information of Honourable Members on the occasion of the Budget 2008-09, 13 May 2008, pp. 4-6, 4-13 and 4-15.
12 Budget Paper No. 1 2008-09, Budget Strategy and Outlook, circulated by The Honourable Wayne Swan MP, Treasurer of the Commonwealth of Australia and The Honourable Lindsay Tanner MP, Minister for Finance and Deregulation of the Commonwealth of Australia for the information of Honourable Members on the occasion of the Budget 2008-09, 13 May 2008, p. 4-13.