Comment: Less than a month ago the politics around transport in Australia were grim. It was spearheaded by a prime minister whose ideological opposition to public transport meant federal funds to this important infrastructure class had all but dried up, putting a range of much-needed projects on indefinite hiatus and everyone in the cities space tearing their hair out.
It was a deeply held conviction Mr Abbott had, and one explored in his book Battlelines, where he described public transport as “slow, expensive, not especially reliable and still a hideous drain on the public purse”. He also believed “there just aren’t enough people wanting to go from a particular place to a particular destination at a particular time to justify any vehicle larger than a car, and cars need roads”.
These were myopic views that led to myopic policy.
But a change of leadership promising to remove ideology from transport seems to have opened the floodgates, with good news streaming in from all sides this week.
First was the Essential Report finding the majority of Australians support public transport over roads funding. What was striking was that the view held firm across political lines – Liberal voters and Greens voters alike recognised public transport needed to be a funding priority.
It was backed up the next day by the release of a landmark report from the Australian Council of Learned Academies, which said cars and trucks were “choking” Australian cities with congestion, which would cost the economy $53.3 billion by 2031 if something wasn’t done.
The solution? Modal shifts to more environmentally friendly transport options, as well as a move towards polycentric city planning to reduce travel need.
Public transport, the report said, was “the backbone of accessibility-based urban mobility”.
This wasn’t any run-of-the-mill report either – the council it came from is made up of Australia’s top government-endorsed independent bodies – the Australian Academy of Science, Academy of Social Sciences in Australia, Australian Academy of the Humanities and Australian Academy of Technological Sciences and Engineering.
The report was launched by new minister for cities and the built environment Jamie Briggs.
Mr Briggs noted in his launch speech that public transport systems in Australia were expensive to run and build, and that the federal government would “work at a really granular level to look at why it is so expensive to build and operate mass transit systems in Australia”.
It’s something Curtin University Professor Peter Newman picked up on this week in a piece on light rail, which advocates bringing in private investors, who would “earn a return on the increased land values generated by rail development” – otherwise known as value capture.
“Cities could begin by calling for expressions of interest from private companies to design, build, finance, own and operate the light rail link and, crucially, make sure this includes land-development options,” Newman said.
And it seems it’s something the government is already starting to consider, with Briggs telling a “Developing Greater Sydney” conference today (Thursday) there was potential to work with the states and the private sector to “reduce the cost of both building and managing mass transit systems”, and that international examples would be considered.
The ACOLA report found that billions would need to be invested in infrastructure over the next 10 years. Which brings us to the other big bit of transport infrastructure news – Opposition Leader Bill Shorten today announcing a $10 billion “concrete bank” modelled on the Clean Energy Finance Corporation, which would elevate Infrastructure Australia from an assessment body to one that could provide loans, guarantees and equity to get infrastructure projects off the ground and attract private investment through providing greater certainty.
Just as the CEFC has attracted $2.20 of private investment for every $1 it has put in, so too is Shorten’s concrete bank hoping to leverage private investment, particularly from super funds, which he said would account for $4 trillion by 2025.
It was also a change Shorten said would “take the politics” out of infrastructure.
“Labor will elevate Infrastructure Australia from a passive body receiving proposals, to an active participant in the infrastructure market, working with state governments, brokering deals to bring nation building projects to fruition,” Shorten said.
Separate to the bank, Shorten also revealed details of 10 projects a re-elected federal Labor government would commit to funding:
- a rail line to Sydney’s Badgerys Creek airport
- Melbourne’s Metro Rail
- Brisbane’s Cross River Rail project
- the Gold Coast Light Rail stage two
- the Ipswich Motorway
- the Pacific Highway
- Queensland’s Bruce Highway
- Tasmania’s Midland Highway
- the electrification of the Gawler rail line in Adelaide
- a pledge to support public transport in Perth
These, though, would be sent to IA for assessment.
The commitment drew applause from a range of development stakeholders.
Australian Industry Group chief executive Innes Willox said the announced provided “welcome food for thought” and warranted further discussion.
“It is an important contribution with the potential to improve the value we get from our infrastructure investments and hopefully see more investments made,” he said.
“The statement has a welcome emphasis on productivity enhancing infrastructure with a focus on rigorous assessment, transparency and prioritisation of infrastructure proposals.”
Consult Australia said the announcement highlighted the role of infrastructure as a driver of productivity and jobs growth.
“All too often governments at all levels live in an infrastructure utopia of planning and reports, without a clear funding strategy to drive delivery,” Consult Australia chief executive Megan Motto said.
“Importantly, this initiative builds on the success of Infrastructure Australia and acknowledges the current once-in-a-generation opportunity to leverage relatively low interest rates, and a strong credit-rating federally, to generate new private-sector investment for major projects.”
Motto said the ongoing independence of Infrastructure Australia and the credibility of its advice to government were necessary for success.
Engineers Australia said the move meant more job security.
“Australia’s boom/bust infrastructure investment cycle is heavily influenced by political objectives, and this erodes the ability of industry to train and develop a local workforce over the long-term,” EA chief executive Stephen Durkin said.
“The effects of this uncertainty have been seen over recent years with chronic skills shortages in boom times, only to be followed by major lows when spending dries up.”
The Property Council of WA was miffed the state didn’t feature in what it saw as “a bold national infrastructure funding proposal”, blaming its state government’s lack of vision in not having its own independent body to plan and prioritise infrastructure projects.
On WestConnex and Perth Freight Link
As Peter Newman noted, “there will not be enough money to make every city’s transport wishes come true”, and Shorten’s fund relies on $6.4 billion in borrowings.
Eyes should also be turning to current federal infrastructure commitments, such as the Perth Freight Link, the alternatives of which have not been properly canvassed, and the problematic WestConnex project in Sydney, which community groups in Sydney are putting pressure on Labor to drop or send back for analysis.
Back to the Essential Report: it found that 64 per cent of those surveyed – and again holding across political divides – did not want new road infrastructure if it meant charging tolls to pay for it.
Back when Labor was in government it had committed $1.8 billion in funding to WestConnex, but under the proviso that no tolls would be levied on old roads. The NSW government said the condition made the project untenable, but the Abbott government ended up giving $1.5 billion in funding condition free. This has since been backed up by a $2 billion concessional loan.
Mr Briggs, speaking at the Developing Greater Sydney conference, praised the loan as a first for a roads project, and one that will mean stage 2 of WestConnex is delivered 18 months ahead of schedule.
However, without a full business case being made public, and announcements like the Badgery’s Creek airport promising to alter Sydney’s freight movements and therefore much of the road project’s initial basis, question marks should be raised over this piece of infrastructure’s value against myriad transport infrastructure needs nation wide.
It’s a great example of why federal funding needs to be predicated on robust business cases, and why an arms-length, politics-free concrete bank cannot come soon enough.