Governments across the country have expressed a willingness and desire to improve infrastructure decision-making, with infrastructure bodies now established in all states and within the Commonwealth (Box 4 on the following page).
Even though infrastructure advisory bodies have a variety of functions, all have the potential to assist governments improve the way they handle the risks of infrastructure projects, particularly the risks associated with size and premature announcement.
As outlined in Section 5.1, politicians have little incentive for good prac-tice in cost estimation and project announcement. If state infrastructure bodies were required to publish independent assessments of projects before money could be committed, the scrutiny on cost management and infrastructure investment decisions would be increased. This scrutiny would serve to better align politicians' incentives to the public interest.
The additional transparency would not prevent elected representatives from doing their jobs, but would make it more costly for them to do so recklessly and without proper care for committing public money.
| Recommendation 4 Governments should refine the legislated role of their infrastructure advisory bodies so that, before funds are committed to a project valued at $100 million or more, the infrastructure body • assesses the quality of the business case, including the • robustness of the assumptions underpinning it, and • publishes the assessment on its website. |
| Box 4: Each state's infrastructure body has slightly different legislated responsibilities Between 2011 and 2019, each Australian state established an infrastructure body to advise the state government on infrastructure, with varying degrees of independence.aThese organisations are the state complements to Infrastructure Australia, which was established in 2008 and overhauled in 2014. For most state bodies, the major focus is project assessment and long-term strategy: • All states empower their agencies to assess major infrastructure proposals.b • All states except Queensland empower their agencies to prepare a state infrastructure strategy over a 20-to-30-year horizon.c Building Queensland is the only state body tasked with leading business case development for large projects. It leads the preparation of the business case for projects costing $100 million or more ($500 million or more for non-toll road projects), and assists in the preparation of the business case for projects costing $50-to-$100 milliond Building Queensland also produces an infrastructure pipeline document, which identifies all major infrastructure proposals Building Queensland considers prioritiese Similarly, Infrastructure SA produces a Statement of Capital Intentions, identifying the major infrastructure projects to be pursued in the state as a priority within the next five years.f Infrastructure Victoria has a wider role in publishing research on infrastructure matters.g Infrastructure NSW is the only state infrastructure body which is heavily involved in delivery of major projects. It is charged with preparing project implementation plans for major projects, and also overseeing and monitoring the delivery of major projects.h
a. Infrastructure NSW was the first established, in July 2011: Infrastructure NSW Act 2011. Infrastructure WA was the last established, in July 2019: Infrastructure Western Australia Act 2019. b. Infrastructure Victoria does so only at the request of the Government and there is no mandatory requirement that it do so: Infrastructure Victoria Act 2015, Section 44. c. Infrastructure NSW Act 2011, Sections 16-18; Infrastructure Victoria Act 2015, Sections 32-36; Infrastructure Western Australia Act 2019, Sections 13-17; Infrastructure SA Act 2018, Sections 20-22; and Infrastructure Tasmania (2019). d. Building Queensland Act 2015, Section 14. e. Building Queensland Act 2015, Section 15. f. Infrastructure SA Act 2018, Sections 23-25. g. Infrastructure Victoria Act 2015, Section 8. h. Infrastructure NSW Act 2011, Sections 28-36. |