The Federal Government should incentivise states and territories to franchise public transport, and introduce road user charging, as part of a package of reforms to improve the nation’s infrastructure, Infrastructure Australia has said.
IA, the independent body advising governments on major projects, released its Making Reform Happen report on June 4, to coincide with the fourth annual AFR National Infrastructure Summit.
The report says the Australian Government should reward states and territories with infrastructure funding, if they produce reforms an any of five key areas.
IA’s economic modelling says could boost the national economy by $66 billion, and deliver better infrastructure in growing cities and regions.
The introduction of road user charging, franchising public transport services, reforming land tax, reforming the urban water sector, and reforming the electricity markets are the areas identified in the report.
“If we don’t seize the historic opportunity in front of us, we could miss out on the significant impact national infrastructure reform could have on our future productivity and prosperity,” IA chair Julieanne Alroe said.
“Australia is undergoing a period of profound change—our population will grow to over 30 million people by 2031, our economy is in a state of transition, and technology is changing the way we live and work.
“We need infrastructure and services that enhance the liveability of our cities and regions, strengthen our role as a global exporter, and support the transition to a more diversified economy.”
Alroe stressed the list is not “exhaustive” in terms of the reforms which could improve the nation’s infrastructure. “Rather, this paper is intended to show what can be achieved through a well-designed incentive program.
“An incentive-based approach recognises that although there are significant national benefits to be gained from infrastructure reform, it is state and territory governments that wear the implementation costs—as well as any short term political pain,” Alroe continued.
“Incentive payments can help redress this imbalance between costs and impacts, and effectively drive outcomes that may not have come about otherwise.”
Asked about the report, deputy prime minister Michael McCormack said the Australian Government was keen to lean more on the states to push through infrastructure reforms.
“We have to incentivise the states and territories to get things done, and we can’t do it on our own,” McCormack said. “We are in an era where there’s so much congestion in our capital cities, but also so much more regional connectivity required.”
Specifically addressing the idea of road pricing, McCormack said, “we’re having a look at pricing of roads,” adding that the growth of electric cars was putting more pressure on governments, as electric cars don’t contribute to roads via the fuel excise.
Shadow transport and infrastructure minister Anthony Albanese was more sceptical of the idea of directly incentivising reforms, saying the incentive is already there for states to have good planning, as states with good planning are more likely to have their projects approved by Infrastructure Australia.
“I’m not a great fan of franchising of all public transport,” he added.