Independent statutory body Infrastructure Australia (IA) has released a new report examining the progress made to date on the 78 recommendations contained in its 2016 Australian Infrastructure Plan.
Released in February 2016, the first Australian Infrastructure Plan had set out the infrastructure challenges and opportunities Australia faces over the next 15 years (to 2031) and the solutions required to drive productivity growth.
Now, with the 2021 Australian Infrastructure Plan due for release by mid-year, the progress report has highlights 13 areas of high priority for the next plan, all of which have made limited progress during the current plan.
“Few recommendations are considered complete; however, this can be partially attributed to the recommendations made often being generic in nature and often supportive of concepts that are ongoing with no discrete end-target,” the report suggests.
The report also finds that governments across Australia are at varying stages of progress against the reform recommendations in the 2016 Plan.
There is, however, a reasonable proportion of recommendations in which broad-based progress or significant progress has been made.
In terms of productivity, the IA recommendation for the Australian Government to establish Infrastructure Reform Incentives appears to have fallen short, with the level of progress classified as ‘sporadic.’
The recommendation in the 2015 Infrastructure Plan was that the Australian Government should establish Infrastructure Reform Incentives, which link additional infrastructure funding to the delivery reform outcomes.
“Some progress as to the Australian Government playing a role in incentivising reform is underway,” the new assessment finds. “However, we found no evidence to suggest that a suite of ‘Infrastructure Reform Incentives’ or a coordinated program of incentives exists to drive ongoing and holistic infrastructure reform.”
The Australian Construction Association (ACA) Chief Executive Officer Jon Davies said the report highlighted the urgent need for the federal government to lead a coordinated reform program.
“The lack of progress in improving sector productivity and implementing market-based reform is a major area of concern,” Mr Davies said.
“Productivity growth over the last 30 years trails that of other significant industries by 25 per cen.
“If we could just halve the gap in productivity growth, we could be constructing an extra $15 billion of infrastructure every year for the same level of expenditure and employ an extra 15,000 people,” he added.
Among suggestions made by ACA CEO is a construction playbook. Mandating standard forms of contracts, improving risk allocation and embedding a culture standard in the National Partnerships Agreement are other options Davies suggested.
“Regardless of the actual vehicle, the key to successful reform is collaboration. Government needs to work collaboratively with industry to maximise the value of infrastructure,” he said.
“The current path is not sustainable. The construction sector—Australia’s third largest industry employing 10 per cent of the working population—accounted for 20 per cent of all insolvencies last financial year.
“With the record investment in infrastructure we have a real opportunity now to bring about major productivity improvements while creating a more sustainable industry that all of Australia will benefit from.”
Australian Constructors Association congratulated Infrastructure Australia on releasing these findings and engaging with industry in the development of the 2021 Australian Infrastructure Plan.
The 2021 Australian Infrastructure Plan is due for release by mid-year.
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