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Terms and Documents Discussion Paper Annexure A Annexure B Snapshot of the '16 Reasons' why the Commonwealth Govt is obligated, pursuant to the Australian Constitution, to legislate that each of the six States submit a Conforming Cost-Benefit Analyses to the Commonwealth Productivity Commission at least six weeks prior to Financial Close for each prospective transport and communications infrastructure project with a forecast cost exceeding $20 million, initially limiting this obligation to planned/pursued rail infrastructure projects 1st Reason The Australian Constitution obligates the Commonwealth Govt to - * make laws for good government among the States, including railways that are the property of any State; * grant financial assistance to any State on such terms and conditions as the Commonwealth Parliament thinks fit; and * review and audit the receipt of revenue and expenditure by each State.
SMH article 'Humiliating' infrastructure cost blow-outs near $5b a year - SMH - August 13, 2014 reported (OVER 8 YEARS AGO) that Garry Bowditch, chief executive of University of Wollongong's SMART infrastructure research group, called for release of a robust cost-benefit analysis before a State charges into new complex projects. Garry Bowditch called to examine the C-BA for Sydney's $11.5 billion WestConnex motorway and Melbourne's $8 billion East West Link motorway. "There's no money, there's absolutely no money. It's a complete fraud," incoming Labor Minister, Catherine King said re eventually cancelling Melbourne's East West Link motorway.
3rd Reason Annexure A chronicles an embarrassment of critical reports and fault finding newspaper articles (almost 150 critical articles/documents) that record the above-mentioned August 2014 estimate of $5 billion in cost blowouts annually on infrastructure projects has recently doubled). Sadly Annexure A evidences that $8 billion to $10 billion of taxpayer funded dollars have been squandered annually (in the last three years) on poorly planned and inadequately appraised 'rail and road infrastructure projects' resulting in cost blowouts, completion delays and usage/patronage paucity.
4th Reason Numerous newspaper articles regarding the damage due to Pork-barrelling (utilising the Public Purse on projects to win votes) Danielle Wood CEO of the Grattan Institute's article Grey corruption cuts our living standards ....... Feb 2022 notes "Decades of economic research have illuminated the relationship between government corruption and economic stagnation. It has also identified the Reason corruption is such a handbrake on growth." It lists the following four consequences of government corruption: SMH article A ‘cancer on our democracy’: How to fix Australia’s pork-barrelling crisis highlights the huge cost to the Public Purse due to a deficit of published C-BA for grants programs and calls for Australia's political parties to submit their largesse policies for costing by a third party prior to the election campaign.
5th Reason Stealing from the Public Purse for one's own political gain is no different to stealing from one's employer for personal gain. Australia's laws should render politicians that steal from the Public Purse for their own personal benefit, or their party's benefit, on projects to win votes, without submitting a Conforming Cost-Benefit Analysis to the Productivity Commission, similarly subject to jail incarceration as punishment if they cannot refund the wasted millions/billions. Australia's legislators have been slow to learn from political corruption in NSW. 6th Reason
In 2017 Menzies Research Centre evidenced that
Australia ranked a lowly 53rd in the World Economic Forum
Competitiveness Index measure of efficient public spending. 7th Reason Menzies Research Centre report provides a 'red flag' warning of the consequences of inefficient public spending - "Labor might recover the taste for reform that characterised the Hawke-Keating years."
8th Reason
No state is immune from
irresponsible planning of major infrastructure projects during recent years to
the detriment of the Public Purse: 9th Reason 'State agencies warned about over-reliance on consultants' (governmentnews.com.au - 6 Jan 2023) cautioned/alerted about the pitfalls of over reliance upon potentially conflicted consultants.
The essence of the Productivity Commission's 2009 cautionary publication 'THE SOCIAL LOSSES FROM INEFFICIENT INFRASTRUCTURE PROJECTS: RECENT AUSTRALIAN EXPERIENCE' explained that Australia's State and Territory Govts were no longer equipped (due to relying upon out-sourcing) to adequately identify cost-effective robust infrastructure projects with a positive NPV and a Internal Rate of Return is greater than the project's cost of capital (hurdle rate) that will add value and not waste taxpayer dollars.
10th Reason Landmark report Sydney’s Rail Future - Modernising Sydney’s Trains - June 2012 (26 pgs) devoid of cost or revenues forecasts presented a long-term plan to boost Sydney's rail network’s capacity sucked in a lot of unskilled engineering/accounting experts called politicians - refer SMH article Beneath Sydney, one of the world’s largest metro rail projects faces crunch (9 Jan 2023) Doubtless the contributors to this 'landmark report' have done well from their one-eyed marketing of costly rail. 11th Reason Australia's 'Centre For Population' 2022 POPULATION STATEMENT predicts a shrinking employment base and an ageing population that will live longer due to advances in medical science, but with an associated increased health care burden on the economy that must be provided for. 12th Reason Fiscal revenues wasted by Australian States on ginormous cost blowouts and project delays due to not submitting a Conforming Cost-Benefit Analysis for appraisal by Australia's independent 'productivity expert' could have been directed to aged care, child care, youth allowance, flood relief, nursing, road repairs 'et al'.
13th Reason a) is not equipped to appraise/measure/audit Conforming Cost-Benefit Analyses; and
b) but is capable
of assisting States/Territories prepare a
Conforming Cost-Benefit Analyses for
appraisal
at arm's length by the
Commonwealth
Productivity Commission. 14th Reason Article HIGH-SPEED RAIL IS AN UNPROFITABLE TRAIN WRECK (1 Sept 2009) by visiting professor at Conservatoire National des Arts et Metiers, Wendell Cox, asserted that the only high speed rail that is remotely able to 'break even' are shorter major city routes in countries with very large populations eg. Paris-Lyon (427km) and Tokyo-Osaka (514km) routes. The Eurostar service from Paris to London attracted less than one-half of the ridership forecast and required a government financial bailout 15 years ago. A year ago it sought a second bail-out.
15th Reason Private sector equity consortia (Transurban, Horizons Roads P/L, Sydney Transport Partners, John Holland, Lend Lease, Brookfield Multiplex, CIMIC Group 'et al') have been keen to tender for newly planned toll roads to win a BOOT project under a PPP contract with say a 30 years' Concession Deed where the winning Joint Venture SPV equity bidder shoulders construction risk because it expects to make an operating profit based on its projected usage/traffic patronage and the contracted formula to increase toll charges, usually annually. But the same equity consortia are not interested in taking an equity position for rail projects because construction the costs escalate, and forecast passenger patronage fails to materialise. 16th Reason Incompetent and conflicted project planning is deep rooted, longstanding and a gross abuse of the Public Purse. The solution is simple and can be immediate. It merely requires the Commonwealth Govt to pass the afore-mention legislation, pursuant to the Australian Constitution, so that the Public Purse can better address aged care, child care, youth allowance, flood relief, nursing, road repairs 'et al'.
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