5.75 The May 2008 Budget Papers included commentary 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: 183
• 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 2008.184
5.76 The Infrastructure Australia Act states that Infrastructure Australia's primary function is to provide advice on a range of infrastructure issues. Infrastructure Australia does not have responsibility for determining or allocating funding for infrastructure projects. Nevertheless, the Final Priority List was intended to play an important role in Government funding decisions.
5.77 In terms of Infrastructure Australia's participation in the decision‐ making process for Government funding decisions, in February 2010 the Office of the Infrastructure Coordinator advised ANAO that:
Briefings were held with the Department of Infrastructure, Transport, Regional Development and Local Government including:
• early February: draft Cabinet briefs on the then draft priority projects [were] provided to the Department;
• early April: two officers from the Department came to Infrastructure Australia's offices for a number of days and were given open access to submissions - we assisted in explaining any questions;
• post Budget: a number of officers from the Infrastructure Investment Business Division were provided submission material relating to Budget funded projects - they were also given open access to folders and submissions and invited back if need be; and
• additional material was requested and forwarded to the Department relating to the Northbridge project and Major Cities Unit's material on the O'Bahn project (which was not part of the Infrastructure Australia process).
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183 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.
184 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.