Pollies on the script with unnecessary vote-buying projects

0

The bribe total is way down this time around because billion-dollar projects are less common, with the Coalition only offering five (in increasing cost, the Sydney rail upgrade -Newcastle, the Brisbane-Gold Coast rail upgrade, the Beveridge intermodal terminal in Victoria, the Beerwah-Maroochydore rail extension and the North-South Corridor in South Australia) and Labor offers just one (the Melbourne commuter rail loop).

Note however that nothing of these six projects have been assessed by Infrastructure Australia as being of national significance and worth building. Only one of them actually failed the appraisal (the cost of the Maroochydore Railway Extension was found to outweigh its benefits), the other five being offered without full appraisals.

Loading

Terrill says it’s prudent to take a step back from the mega-project frenzy of the last election. For some years now, the mechanical engineering industry has been warning of its limited ability to deliver the existing pipeline of projects, let alone add to it. Even before the pandemic, employment in the sector had halved and supply chain disruptions had made finding materials slower, harder and more expensive.

With the recent slowdown in population growth, maintaining and upgrading existing assets should take priority over major new projects. But both sides promised to spend more on new projects than on upgrades. Pollies always prefers the flashier projects.

But while big projects are down, small projects are up. Two-thirds of the Coalition’s pledged spending is on projects costing $30 million or less, and nearly half of Labor’s. These are car parks at stations and roundabouts.

I guess it’s about spending less money overall on projects for many other key constituencies. In other words, it is a greater efficiency in buying votes. Presumably, voters in those seats find the projects appealing.

But that doesn’t make the money well spent. Terrill reminds us that these small, hyper-local projects violate a long-standing principle that the federal government sticks to infrastructure of national significance, leaving the small stuff to state and local governments.

“The quality of the projects promised in the heat of the electoral campaigns is mediocre.

Marion Terrill, Grattan Institute

They know a lot more about what is needed most and where, which means that when the federal government gets its vote buyers wrong, things often go wrong. Many suburban parking lots promised in the last election had to be cancelled, Terrill says, because there were no feasible design options, feasible sites or because the rail station was being merged with another.

How were the young political staffers with their whiteboards in Canberra supposed to know that?

Terrill notes two other objections. First, “the quality of the projects promised in the heat of the electoral campaigns is mediocre,” she says. Small projects are too small to be assessed by Infrastructure Australia and, as we have seen, large projects are promised without having carried out a proper assessment.

Prime Minister Scott Morrison at the M4-M5 link in New South Wales.Credit:Edwina Pickles

Second, she says, “government decisions must be made in the public interest, and those who make the decisions must have no private interests – including seeking political advantage with public funds.”

‘A better deal for taxpayers would be that whichever party wins government on Saturday stops that spending on small local infrastructure and instead focuses on projects of national importance that have been properly assessed by Infrastructure Australia’ , said Terrill.

In an earlier report, Terrill argued that the next government should strengthen the safety barriers of transport spending. It should “require that a minister, before approving funding, review and publish Infrastructure Australia’s assessment of a project, including the business case, cost-benefit analysis and ranking according to of national importance”.

This would go a long way to increasing the social and economic benefits of the projects, while reducing their use to buy votes with taxpayers’ money.

And all this before you get to cost overruns. In 2020, Terrill reported that the domestic railroad originally cost $4 billion, while the latest estimate was $10 billion. Melbourne’s North-East Link had grown from $6 billion to $16 billion. Sydney Metro City & Southwest Metro had grown from $11 billion to $16 billion. Incompetence or deliberate understatement?

Ross Gittins is the economics editor.

The Business Briefing newsletter features top stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Share.

Comments are closed.