Improving selection, costing and coordination for large transport projects and placing a cap on light vehicle emissions are among the key policy priorities identified by public policy think tank Grattan Institute for the next Australian Federal Government.
In its Orange Book 2022: Policy priorities for the federal government report published on Sunday, the advisory body calls on the winner of the 2022 federal election to “boost the bang for buck from transport spending,” noting the federal government should fund only nationally significant infrastructure projects, avoiding projects that are poor value for money.
The ‘policy blueprint’ – as Grattan refers to the report – identifies reforms to boost incomes, improve health and education, create better transport links, make housing more affordable, generate meaningful progress on climate change, and strengthen Australia’s political institutions.
The report calls for the next federal government to amend the National Land Transport Act 2014 to prohibit federal funding for a transport project worth $100 million or more before the Minister has considered Infrastructure Australia’s evaluation of the project.
Disclosing the status of cost estimates for infrastructure proposals valued at $100 million or more, collating data on completed projects valued at $20 million or more, and requiring states that receive federal funding to publish post-completion reviews of all projects over $100 million are among other suggestions to help the federal government with sounder decision-making on transport projects.
More broadly, the advisory body says the future federal government should take its national coordination role more seriously. This includes publishing annual advice on the discount rates regime that will apply to transport infrastructure projects for the year ahead.
“The advice should include the risk-free rate and the basis on which it is calculated; the market risk premium; the range of systematic risk of public infrastructure projects and their typical values; and the project characteristics that should legitimately license a project proponent to argue for a discount rate outside the standard ranges,” the report says.
The document notes the federal government should encourage states to devote more resources to identifying modest-sized transport infrastructure projects with higher net benefits than very large projects.
“Megaprojects should be proposed as the last, not the first resort,” the authors suggest.
This comes off the back of an earlier published report by Grattan Institute in November 2020, which had found that ‘mega’ transport projects – projects valued at $100 million or more – exposed Australian taxpayers to bigger risks of cost blowouts.
Reducing harmful emissions from cars is another key area of attention, where the policy recommended is to impose a single annual average emissions standard, or ceiling, covering all new light vehicle sales.
It goes on to specify the maximum emission ceiling: “The ceiling should come into force no later than 2024 and not exceed 143 grams of carbon per kilometre (g/km). It should not exceed 100g/km by 2027 and 25 g/km by 2030. Carbon emissions from vehicles under the ceiling should fall to zero by 2035.”
Improving the quality of Australia’s petrol and tightening vehicle pollution standards are other suggestions in this regard.
Vehicles here should meet international pollutant standards by mid-2024. Tighten vehicle pollution standards so that they are consistent with current international standards, immediately for diesel vehicles and by at least mid-2024 for petrol vehicles, it suggests.
Co-authored by Danielle Wood, Brendan Coates, Stephen Duckett, Jordana Hunter, Marion Terrill, Tony Wood and Owain Emslie, the report comes within months of the 2022 Australian federal election, due to happen in the first half of 2022.
Other policy priorities in the report cover such aspects as childhood education, housing, energy and climate change, aged care, health, retirement income and budget policy.
To download the report, click here.
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