Nearly a year after it was created, Malcolm Turnbull’s special Infrastructure Financing Unit has failed to kick a goal when it comes to financing major rail, road and other infrastructure projects.
The Prime Minister created the IFU in the 2017-18 Budget, vowing it would attract more private investment into public infrastructure projects using financing mechanisms like value capture.
Despite opening its doors on July 1 last year, the IFU has failed to report a single outcome. The “news’’ section of its website includes nothing beyond its publication of a corporate plan and a dull opinion piece written by former Assistant Cities Minister Angus Taylor.
Indeed, despite Mr Turnbull’s insistence that the IFU would bring commercial experience to bear through the use of “innovative’’ financing, the Government has failed to announce any projects in the past year that involved private capital.
This should come as no surprise.
Mr Turnbull was warned.
Ahead of the delivery of the 2017-18 Budget, peak infrastructure industry group Infrastructure Partnerships Australia told Mr Turnbull in writing that it could not identify any proposed, commercially viable infrastructure project not already attracting finance.
Imploring Mr Turnbull not to create the IFU, the IPA submission said: “Commonwealth Government funding support is needed for infrastructure – Commonwealth financing is not.’’
Mr Turnbull went ahead anyway, creating the IFU within his own department to sideline the independent Infrastructure Australia, which already had the legislative mandate to advise on financing of Australia’s infrastructure.
And far from increasing Commonwealth funding support, Mr Turnbull used last year’s Budget to cut Federal infrastructure grants to the states from the promised (but not delivered) $9.2 billion in 2016-17, to $4.2 billion in 2020-21.
The IFU is a waste of money.
A Labor Government will abolish it and reallocate its funding to Infrastructure Australia to enhance its ability to deliver on its core functions of assessing projects, producing a pipeline of projects and recommending financing mechanisms.
This funding will also be used to re-establish the Major Cities Unit, scrapped by the Coalition, within Infrastructure Australia.