May 25, 2017

New funding agency not needed

Mystery surrounding Prime Minister Malcolm Turnbull’s new Infrastructure and Project Financing Agency has deepened, with bureaucrats appearing at Senate Budget Estimates hearings unable to explain basic details about its function and operation.

It is a year since Mr Turnbull announced he would create the agency within the Department of Prime Minister and Cabinet to broker financing deals for private investment in public infrastructure projects.

But at Senate Budget Estimates hearings this week, departmental officers struggled to explain the unit’s function, operational or reporting guidelines or what measures would be taken to prevent political interference in the advice it provides.

This lack of detail suggests the establishment of the unit is a stalling tactic by Mr Turnbull to draw attention away from his cuts to infrastructure investment, including his $1.6 billion cut this year alone.

There is no need to create the Infrastructure and Project Financing Unit.

It is a solution looking for a problem that does not exist.

The independent Infrastructure Australia already has the expertise and legislative mandate to work with businesses on financing issues and public-private partnerships.

Indeed the former Labor Government worked through Infrastructure Australia to establish public-private partnerships to deliver the Melbourne Metro and Brisbane’s Cross River Rail projects in 2013.

But when the Coalition took office a few months later, it scrapped those projects, even though they included the kind of funding arrangements the Prime Minister now hopes to deliver through his new agency.

Mr Turnbull should stop trying to remake the world in his own image and start investing in actual rail, roads, ports and other infrastructure.

The peak lobby group for the infrastructure sector, Infrastructure Partnerships Australia, made clear in its pre-Budget submission that the agency was not needed.

“We cannot identify any currently proposed infrastructure projects which are commercially viable and not already attracting finance,’’ the IPA submission said.

“Therefore we cannot see how the (agency) will increase the pace of project delivery.’’