I noted on Friday how the Senate had responsibly placed limits on the Abbott Government’s “asset recycling” program, pushing through changes to the bill that would: 1) require that infrastructure projects worth more than $100 million be assessed by Infrastructure Australia with a published cost-benefit analysis; and 2) require that all incentive payments by the Commonwealth to the states require a legislative instrument, effectively meaning the upper house can reject payments which it does not believe deliver taxpayer value.
Unfortunately, the Coalition has rejected the Senate’s changes in the House of Representatives, arguing instead that the changes would “add red tape with no additional benefit”:
…government leader, Eric Abetz… said the asset recycling legislation was an “essential part” of the government’s agenda to build the infrastructure of the 21st century and create jobs, and it was important that the fund be able to operate without the particular impediments proposed by the Senate…
“The amendments would create a disruptive and unnecessary process that would mean the states would have no confidence that the Commonwealth would make payments in accordance with already signed National Partnership Agreements,” the government document said. “The proposal to use disallowance mechanisms against payments to the states would block or delay funding from the Asset Recycling Fund for critical infrastructure”…
The finance minister, Mathias Cormann, said: “These amendments only add red tape with no additional benefit. These additional amendments are about increasing duplication.”
As I noted last week, implementing checks-and-balances to the Government’s asset recycling program, and increasing transparency, is an excellent move. The Productivity Commission’s new report on the provision of public infrastructure, released last week, contains many examples of where “inadequate project selection… have led to costly outcomes for users and taxpayers”, and raises concern that asset recycling “could act to encourage privatisation in circumstances that are not fully justified and encourage the selection of new projects that do not have demonstrable net benefits”.
That the Coalition has opposed the Senate’s sensible safeguards suggests that it supports infrastructure pork barreling over well-targeted and productive investment, raising the likelihood of more taxpayer funds being wasted on projects with dubious merits.
