When Infrastructure Australia boss Michael Deegan publicly carpeted the Abbott government over its proposed legislative reforms to overhaul the government advisory body two weeks ago, it set off a political and industry-wide bomb.
Deegan's scathing attack brought to a head simmering tensions, prompting speculation about his position as state governments lobby behind the scenes for the federal government to move quickly to restructure the organisation.
A key reform includes abolishing the statutory infrastructure co-ordinator role - currently occupied by Deegan - which reports to the federal infrastructure minister, and replacing it with a chief executive who reports to the Infrastructure Australia board, led by the highly regarded Sir Rod Eddington and other eminent board members, including Mark Birrell and Kerry Schott.
Other reforms include developing a 15-year pipeline of major infrastructure projects to be revised every five years and that all Commonwealth infrastructure expenditure over $100 million would be subject to a cost benefit analysis, undoubtedly to ensure another National Broadband Network-type project can never get up without proper analysis.
Deegan, who was reappointed to the role shortly before the last election, criticised some of the
reforms in a submission to a Senate inquiry into the Infrastructure Australia Amendment Bill. In the 15-page submission he warned the changes would erode public confidence and trust in the government's infrastructure planning, undermine constructive discussion, damage credibility and transparency, and hobble consultation with states and territories.
Some of his criticisms are self-serving but some of the Abbott government's proposed reforms are questionable, including carving out certain classes of projects. As Business Council of Australia head Jennifer Westacott told The Australian Financial Review recently: ''The BCA is concerned the bill in its current form provides for ministerial powers that could be used to prevent Infrastructure Australia from assessing certain classes of projects and which require the publication of project evaluations only under direction by the minister.''
What is needed is an infrastructure body that is allowed to do its job unfettered from political interference. Unfortunately, outside of the NBN - which has its own set of controversies - infrastructure policy has all too often been hijacked by real politics.
IA was created in 2008 to ''bring a fresh approach to developing and modernising the nation's physical infrastructure - replacing neglect, buck-passing and pork-barrelling with long-term planning, where governments predict and anticipate infrastructure needs and demands, not merely react to them,'' the former minister for infrastructure Anthony Albanese said at the time.
Its core function was to ''provide advice on regulatory reforms designed to improve existing infrastructure and streamline new proposals … and propose ways to harmonise legislation and regulation across jurisdictions''.
The neutering of IA became apparent when the former government rolled out the NBN without consultation, and 10 days out from the federal election it committed $2 billion to the Parramatta to Epping Rail Link project in Sydney.
The rail link didn't qualify for IA's priority list or the NSW government's Metropolitan Transport Plan 2010. It did qualify for votes, though. So did a series of rail, road and port infrastructure projects that qualified for funding despite their absence from the IA list on the basis that more work was needed.
There has also been a mismatching of priorities between state and federal governments. For instance, the east-west link was considered a priority for the Victorian government, yet the Melbourne Metro was catapulted to a ''ready-to-proceed'' stage by IA, while the east-west link is languishing in early stages of assessment.
It can be argued that despite some good outcomes in national transport regulation, there has been limited progress on policy and regulatory reform driven by IA. As one industry observer said: ''This has not been helped by misalignments between IA's policies and those of the government that they are meant to advise - eg the broader application of user charging.''
Infrastructure is the backbone of the economy, providing jobs, efficiencies and the key to improving productivity. When Tony Abbott came to power he said he wanted to be remembered as the infrastructure PM who raised productivity by cutting red and green tape and eliminating pork-barrelling.
An independent infrastructure advisory group is vital to achieving this goal. There is little doubt the structure of IA needed an overhaul. But it is imperative that the government doesn't fall into a similar trap as its predecessor and create a body that it can manipulate to fit its political agenda.
