We get bombarded with economic and political news. Some of it is worth
knowing, some isn't. Some gets much attention, some gets little.
Sometimes we give too much attention to things that aren't worth knowing
and too little attention to things that are. The Productivity
Commission's draft report on public infrastructure is one of the latter.
Ostensibly,
it's a report advising Tony Abbott on how to achieve his dream of
becoming the "infrastructure prime minister". In fact, it's an urgent
warning to Australia's voters and taxpayers: we've wasted a lot of money
on infrastructure and, if we're not careful, we could waste a lot more.
The
point is not that all infrastructure is a waste of money, but that we
tend to get too emotional about the topic and not sufficiently
hard-headed. We need to think a lot more carefully, demand that our
politicians - on both sides - lift their games, and insist on a lot more
information being made public.
Almost all of us believe the
country is suffering a serious infrastructure deficit, that there's a
huge backlog of essential public infrastructure waiting to be built and
our top priority must be to get on with clearing it as soon as possible.
I
believe there's some truth to this perception. There most certainly are
categories where we have an infrastructure problem. Big-city traffic
congestion is a glaring example.
But to say we have an
infrastructure problem is not to say we have an infrastructure deficit.
To say we have a backlog is to presuppose the answer to the problem:
just get out there and build a lot more ASAP.
It never occurs to
us that, when we jump to that conclusion, we are, first, rewarding the
lobbying efforts of the infrastructure industry and, second, making life
too easy for our political leaders. We're doing just what the radio
shock-jocks make their not-inconsiderable living encouraging us to do:
use our hearts not our heads, react emotionally rather than
intelligently.
Remember, we live in the age of rent-seeking - of
big business interests using public opinion to extract favours from
governments. Favours that, one way or another, you and I end up paying
for.
It has suited the pockets of the infrastructure lobby - big
developers, engineering construction companies and associations of
engineers - to give us the impression we have an infrastructure crisis
that's getting bigger by the minute and needs fixing by yesterday.
Much
less effort has gone into checking out the existence of this backlog
and its precise whereabouts than into spending like fury. Although these
figures probably understate the full extent of spending on public
infrastructure, it's true that, measured as a proportion of national
income, spending on engineering construction work for the public sector
fell to a low of just more than 1 per cent in 2003.
By 2012,
however, it had doubled to more than 2 per cent. In present-day dollars,
that's more than $30 billion a year being spent on new infrastructure.
Ever
seen a headline screaming we've more than doubled our infrastructure
spending in a decade? No, didn't think so. It suits too many people to
have us go on thinking the backlog's getting bigger by the day.
One
problem with the not-spending-enough approach to the infrastructure
question is that it rewards politicians - particularly state politicians
- merely for spending more of our money which, as we've seen, they've
been doing like crazy for up to a decade.
Another problem is we
have too little assurance the money is being well spent. In our concern
about the backlog, we seem to have forgotten how prone politicians are
to pork-barrelling - spending money disproportionately in marginal or
National Party electorates - and how tempting it is to spend on those
projects that happen to be the forte of generous corporate donors to
party funds.
And not just that. Politicians of all stripes are
terribly prone to favouring big-ticket, showy, popular projects over
smaller, technical, hidden, boring projects that would actually do more
good. They almost invariably favour projects where there's a ribbon they
can cut.
They tend to underspend on boring repairs and
maintenance then, when the infrastructure has gone to wrack and ruin,
make heroes of themselves by building a brand new replacement.
For
reasons I don't understand, the present crop of Coalition governments -
federal and state - seem biased against public transport as the answer
to traffic congestion and have reverted to the 1960s notion that more
tollways will fix everything.
As the Productivity Commission has
outlined, the answer to this is much more rigorous evaluation of the
costs and benefits of projects - taking account of social factors, not
just financial ones - by genuinely independent infrastructure
authorities, with all their findings made public and no exceptions for
bright ideas such as the national broadband network.
As well, the
commission makes the obvious but easily forgotten point that we should
make sure existing infrastructure is being used efficiently before we
rush off and build more. Often this will involve smarter charging for
infrastructure. This failing explains much of the rise in electricity
prices being blamed on the carbon tax.
In infrastructure, as in
everything, there's no free lunch. One way or another you and I end up
paying for it. That's an argument for thinking it through.
