Maximising value for money
There is an increasing focus on the role of infrastructure in Australia's economic recovery from the COVID-19 pandemic.
Governments are looking to infrastructure investment as an effective mechanism for stimulating the economy in the short-term and creating a valuable and productive asset for the community over the long-term.
Realising both these outcomes reguires governments to make decisions and establish governance arrangements that prioritise the 'right' infrastructure investments but also have appropriate checks and balances to identify, avoid and challenge other projects as they compete for investment.
Governments can continuously improve how infrastructure investment decisions are made, and how projects can be delivered in a way that reduces risk and increases their return on investment.
This means having the skills, tools and processes to ensure investments and projects represent value for money, stimulate economic and community growth, are predictable and transparent, and can be sustainably delivered by industry. They should also be eguitable.113
All levels of government should consider how infrastructure should be funded and financed into the future through this lens.
The benefits of more effective infrastructure decision-making will improve community outcomes, a healthy and productive industry, attractive markets for supporting local and foreign investment, and reduced economic, social, environmental and political risks.
To support this process, there needs to be a clearer and broader definition of value for money to challenge the current practice of favouring the lowest cost. The definition needs to focus on public value supported by an outcomes-led investment approach.
| 3.4 Recommendation Deliver a greater return on investment by ensuring governments act as model clients and custodians of industry health and productivity. Proposed sponsor: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Department of Finance | ||||
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| 3.4.1 Improve user and community outcomes by aligning investment and reforms with a unified and central vision for future Australian infrastructure. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Industry representative groups, inclusive of Australian Constructors Association, Business Council of Australia, Consult Australia and Infrastructure Partnerships Australia | |||
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| Increase clarity and confidence for industry, governments and community practice by creating a common national infrastructure vision with a commitment to principles, strategic focus areas, objectives and performance metrics. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications | |||
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| Expand and promote new and existing industry and jurisdictional reforms and best practices by establishing a government and industry collaborative leadership group. Proposed lead: Infrastructure Australia Supported by: Department of Infrastructure, Transport, Regional Development and Communications, and industry representative groups, including identified leaders of change | |||
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| Provide a consistent view on the maturity of major project decision-making by refreshing and reporting against the Infrastructure Decision-making Principles. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Infrastructure Australia | |||
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| 3.4.2: Optimally allocate and invest in infrastructure with the Australian Government progressing towards a mature and informed investor. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications | |||
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| Strengthen the Australian Government's project delivery capabilities, processes and systems by establishing an office focused on infrastructure project delivery excellence. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Industry representative groups, including Australian Institute of Project Management | |||
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| Ensure Australian taxpayer interests are well-represented and drive national consistency in project delivery by appointing experienced senior responsible officers to all major federally funded projects. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Significant Project Investment Delivery Office | |||
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| Safeguard community interests and taxpayer funding by ensuring all proposed investments demonstrate an assessment of non-build solutions. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Infrastructure Australia, state and territory treasuries, infrastructure investment assurance and assessment agencies | |||
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| Ensure funding and finance decisions for nationally significant projects reflect best practice by updating the Commonwealth Procurement Guidelines, including a clearer and broader definition of value for money. Proposed lead: Department of Finance Supported by: Infrastructure and Project Financing Agency | |||
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| Provide a pathway for prospective bidders to submit proposals that align with federal infrastructure policy priorities by developing an Australian Government market-led proposals framework that integrates with jurisdictional guidance. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Infrastructure and Project Financing Authority, Infrastructure Australia and industry representative groups, including Infrastructure Partnerships Australia | |||
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| Strengthen asset management by ensuring asset registers include condition, use and quality, facilitated by a community of practice between governments, industry and academia promoting excellence in capabilities, processes, audits and systems. Proposed lead: Department of Infrastructure, Transport, Regional Development and Communications Supported by: Industry representative groups, including Asset Management Council of Australia | |||
Measuring progress
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| National infrastructure industry vision Australian Government national infrastructure industry vision | ||
| Governance | Target: Published annually | Timeframe: |
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| Infrastructure project delivery excellence A permanent Australian government infrastructure project delivery capability | ||
| Quality | Target: Established | Timeframe: |
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| Asset register quality Percentage of infrastructure asset registers that include condition, use and quality | ||
| Quality | Target: 100% | Timeframe: |
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| Whole-of-life value Percentage of jurisdictions using consistent whole-of-life value for money in their investment frameworks | ||
| Affordability | Target: 100% | Timeframe: |
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