Building infrastructure effectively and efficiently

Comments on Paul Kelly “Building from the base”, 28/10/2009, http://www.theaustralian.news.com.au/story/0,25197,26268751-12250,00.html

Rudd government has shown a poor attitude toward being responsibly building infrastructure projects and avoiding cost benefit analysis is a key manifestation of that attitude.

The approach by the Rudd government to infrastructure will cause a lot of damage to Australians’ welfare by building uneconomic projects and cost blowout and loss of opportunities.

There is no question that government needs to manage Australia’s infrastructure. But the key is how to manage it and build it in the most cost effective way.

It does not necessarily mean that all investment must come from the government. It means the government should ensure there is adequate infrastructure in place and create enough incentives for the private sector to be involved in building it.

Whether the Productivity Commission is suited for cost and benefit analysis is a question. But there needs an independent agency or organisation to do that. It does not have to a fixed organisation for all projects.

Further independent cost benefit analysis must be made public for the public to scrutinise it, so the government cannot cheery picking projects.