Infrastructure Australia argues for greater federal investments in state and territory infrastructure

Infrastructure Australia has released a new report titled Making Reform Happen and it argues the Federal Government, who holds most of the purse strings across Australia's three tiers of Government, should make additional investments - over and above existing commitments - in return for delivery of reforms.

One of the highest priority recommendations from IA is that Canberra should establish mechanisms that link and provide additional infrastructure funding to the delivery of reform outcomes - for instance, the asset recycling program set up during the Abbott Government incentivised state governments to privatise assets in return for bonus payments on top of the sale prices.

The report claims after reforms through the urban water, public transport, land tax, electricity market and road user charging sectors, Australia's GDP would increase by $66 billion and the country would enjoy a $19 billion ongoing increase in national tax revenue.

Land tax reform and road user pricing reform are the two main revenue sources which make up the vast majority of the projected $19 billion of national tax revenue by 2047.

IA notes 'the revenue gathered through [fuel excise and vehicle registration] is not directly linked to the cost of road use' and that 'Australia needs to adopt a new approach to the way we fund, deliver and operate our roads, otherwise we can expect significant deterioration and congestion across the nation's networks over coming decades'.

Victorians might find this familiar, as Infrastructure Victoria has put road user pricing reform in its top three infrastructure priorities for the state.

A reformed charging framework for roads would see all existing taxes and fees removed and replaced with direct charging that reflects each user’s own consumption of the network, including the location, time and distance of travel, and the individual characteristics of their vehicle such as weight and emissions.

This would also include the implementation of supporting technologies, and fundamental change to legislative and funding arrangements.

Infrastructure Australia - Making Reform Happen

To read the Making Reform Happen report, see infrastructureaustralia.gov.au

Comment

Marking Reform Happen has an indicative reform agenda which includes Federal Government responses.

The first recommendation on introducing road user charging states that 'Federal, state and territory governments should commit to the full implementation of a heavy vehicle road charging structure in the next five years'.  

Likewise, 'federal, state and territory governments should commit to the full implementation of a light vehicle road charging structure in the next ten years'.

The heavy vehicle road charging structure is supported by Canberra and it notes the recommendation for light vehicles.  When the Federal Government 'notes' the recommendation, in the road user pricing reform area, it is referring to the fact the matters are primarily state/territory issues.

Notice that as soon as reform agenda gets closer to the individual - the voter - the enthusiasm recoils?  That's what happened when Infrastructure Victoria recommended, for the most part, the same thing - the Andrews Government ruled it out almost immediately.