4 Governance and policy reform
Key Points ■ Sound governance and regulation are vital if the infrastructure sectors are to play an effective role in meeting Australians' needs and aspirations over the next 15 years. ■ Governance can be improved, especially in the area of integrated strategic planning and project decision making. ■ Regulatory arrangements are broadly working well, though there are areas where improvements need to be made and where the effectiveness of recent changes needs to be monitored. ■ Policy reform, especially in relation to infrastructure funding, is vital. Reform in the transport sector, including implementation of a system of road pricing, needs to be pursued. ■ Recent experience suggests that making improvements in the governance, regulatory and policy settings for Australia's infrastructure sectors will remain a difficult exercise, requiring greater public understanding of likely trade-offs between outcomes as well as political goodwill to share the responsibility for reform. |
This chapter identifies a range of governance, regulatory and policy issues bearing on the infrastructure sectors.
Various Australian governments and other organisations have expressed their aim of raising standards of public policy decision making.65 This needs to include action in the areas of infrastructure governance, regulation and policy development.
Governance structures have a profound effect on the quality of infrastructure decision making. Regulation is 'one of the key levers by which governments act to promote economic prosperity, enhance welfare and pursue the public interest'.66 Finally, policy reform in the infrastructure sectors, especially in relation to funding, will be a vital, yet challenging, issue for governments and the community.
These considerations - governance, regulation and policy - intersect to some extent. For example, good governance arrangements apply to the making of regulations. And broader policy setting reflects on governance and regulatory arrangements. Ultimately, all three considerations bear on the ability of the infrastructure sectors to support Australians in meeting their aspirations.
Recognising the diverse requirements of Australia's infrastructure sectors, the following broad principles should apply to the development and reform of Australia's infrastructure:
■ encouraging open markets to facilitate the cost effective provision of infrastructure services;
■ effective regulation of natural monopolies where competitive market arrangements are not possible;
■ strong leadership through better long-term planning and rigorous decision making across governments, especially in those circumstances where market arrangements cannot support competition and government funding is required to support service delivery;
■ promoting efficiency, accountability and transparency in planning for and operating Australia's infrastructure, with a focus on ensuring that regulation of infrastructure is proportionate to the risks involved; and
■ ongoing assessment of Australia's infrastructure policy settings across all governments and regulators to ensure they are optimised to achieve the nation's changing needs.
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65. Infrastructure Australia (2015a) provides further information.
66. Organisation for Economic Cooperation and Development (2012), p. 3