Reserve Bank of Australia governor Dr Philip Lowe has confirmed today the importance of conducting cost-benefit analysis when considering the viability of major infrastructure projects.
Addressing the House Economics Committee in Sydney, Dr Lowe made clear his preference for infrastructure projects to be the subject of proper cost-benefit analysis before they receive Federal Government funding.
When asked about the need for a cost benefit analysis in making decisions regarding infrastructure projects, Dr Lowe told the Committee:
“People can dream up fabulous ideas for infrastructure and they sound great but if we’re going to put public or private money behind them there needs to be a strong business case with a cost benefit analysis underpinning that.”
A requirement for cost-benefit analysis has been a significant point of difference between the major parties policy on large scale infrastructure projects in Australia, with the Liberal Government continuing to blindly invest in multi-billion projects without evidence as to their viability.
By contrast Labor remains committed to returning the independent Infrastructure Australia to the centre of decision-making around nation building and to ensure that major projects receive proper cost-benefit consideration before committing taxpayer money to the most viable projects.
Labor calls on the Government to heed the comments of the Reserve Bank governor and to abandon its cavalier approach to infrastructure funding that has already seen colossal blow-outs and major mistakes on projects such as Melbourne’s East-West Link, the Perth Freight Link and Sydney’s WestConnex.