Jun 16, 2014

Fund first, check later

Tony Abbott is throwing billions of dollars at new road projects despite not having checked to determine whether they represent value for taxpayers’ money.

The Prime Minister’s Budget decision to fund new roads like Melbourne’s East-West Link breaches one of his fundamental election promises – to subject any infrastructure project worth more than $100 million to a cost-benefit analysis.

For the East-West Link, Mr Abbott will give the Victorian Government advance payments of $1.5 billion by the end of this month, despite having produced no business case and despite the fact that $1 billion of this money is for Stage II, construction of which will not begin until 2015-16.

That breaches another commitment to refuse to hand out money for states unless milestones on planning and construction have been met.

On June 6, Assistant Infrastructure Minister Jamie Briggs told the Civil Contractors Federation:

So we are driving the state governments very hard to give us timetables to ensure that we’re meeting the expected time of delivery of these projects. That we’re hitting milestones, that we’re only making payments to states when they actually deliver the milestones, that they’re not getting money in their bank account prior to milestones being delivered…’’

Despite having promised a strict process to ensure value for money on infrastructure spending, Mr Abbott has fallen at the first hurdle.

Not one of his new roads, including the East-West Link, Perth’s Freight Link and the second Toowoomba Range Crossing, has been fully assessed by Infrastructure Australia.

As Infrastructure Minister Warren Truss admitted at a recent Senate estimates Budget hearing, the Government’s approach to these projects is fund now and ask questions later.

At the same time as he is funding roads that have not been the subject of cost-benefit analysis, Mr Abbott has scrapped billions of dollars in funding for urban rail projects like the Melbourne Metro and Brisbane’s Cross River Rail, both of which had been assessed and backed by Infrastructure Australia.

Labor believes in Commonwealth Government investment in an integrated transport system that includes both road and rail.

But above all, scarce public dollars should be invested in projects that have been through the proper assessment process to ensure they represent value for taxpayers