The Age: Billions spent on roads in “hideously inefficient” way. July 22, 2014, Josh Gordon, State political editor for The Age.
Illustration: Ron Tandberg.
More than $20 billion a year of national road funding is being spent in a “hideously inefficient” manner, according to a leaked assessment by Australia’s independent infrastructure umpire.
The Infrastructure Australia report, obtained by Fairfax Media, has also delivered a scathing critique of “monopoly” state-run road entities such as VicRoads, claiming a culture of resisting reform has led to a situation in which political leaders are held “captive” to demands for more funding.
“The unhealthy focus of road agencies appears set on ‘getting, controlling and spending’ more taxpayer money, rather than questioning efficiency or value to the motorist and governments,” the report says.
The report, “Spend more, waste more, Australia’s roads in 2014: moving beyond gambling,” was sent to industry experts on Tuesday for comment. But, just hours after it was circulated, Infrastructure Australia’s acting coordinator John Fitzgerald ordered its withdrawal.
Mr Fitzgerald said the report had been emailed “in error” by a consultant. He said it had been withdrawn because he had not read it, nor had it been properly considered by the Infrastructure Australia council or the federal government.
“While I’m still here, I value good processes to ensure that publications from Infrastructure Australia are of the highest quality,” Mr Fitzgerald said.
The report, which claimed Australia has a “gambler’s addiction to roads”, said national road spending is now outstripping revenue raised through road-related taxes and charges, warning “Australia’s thirst for roads” would come at the expense of other services as the gap continues to widen. In the four years to June 30, 2012, road spending outstripped road revenue by $4.5 billion.
“Given that current governments at all levels display an appetite for much greater road spending in future, this trend should give rise to urgent questions of efficiency about how road funds are raised and allocated,” the report said.
It suggested there was little consideration of whether Australia’s demands for new roads should be satisfied, and argued that rail funding had missed out as a result.
“The current Australian system assumes that roads are an answer to most transport problems and seeks more and more funding to that end, with little consideration of alternatives that most other developed parts of the world enjoy, such as significant heavy intercontinental rail networks and dominant heavy mass transit systems.”
It suggested a better approach would be to increase private-sector investment in roads.
“These efforts should bypass road agencies, which in most observed cases, will only suffocate or over-complicate such opportunities if given carriage of them.”
The report said since Infrastructure Australia was set up in 2008 to provide independent advice on infrastructure projects, it has received more than 1000 proposals, mostly for road projects.
“They were almost universally poor, in that they lacked any cost-benefit rigour whatsoever,” it said. “The real problem is that road agencies and other road project proponents in industry and the community spend next to no effort examining what problems their projects and plans are trying to solve, other than the perceived problem that they do not have enough road funding.”
The report raises interesting questions for the federal government, which has a road-focused approach to infrastructure funding. During the 2013 election campaign, Prime Minister Tony Abbott declared that the Commonwealth should “stick to its knitting” and focus on funding roads rather than urban rail.
The Napthine government too has been criticised for failing to submit a robust benefit-cost analysis for its East-West Link to Infrastructure Australia. But, with about $27 billion of transport projects announced in the May budget, it has also been keen to involve the private sector.
The report was also critical of the federal government’s efforts to predict increases in road traffic, claiming urban congestion had consistently been overstated as a result.
In Melbourne, the government had predicted a 27 per cent jump in road vehicle kilometres travelled in the decade to 2011-12. In reality, vehicle use had increased by just 15 per cent, it said.