Cross-posted from the Australian Financial ReviewThe federal government’s infrastructure advisory body is facing criticism for stepping back from an ambitious reform agenda outlined little more than a year ago, with its latest audit silent on road user charges, service privatisation and land tax reform.

Infrastructure Australia released a new national infrastructure audit this week, warning “catch- up” spending was not enough to ease population pressure in Australia’s biggest cities.

Missing from the massive document were key recommendations contained in a June 2018 report on achieving reform, including calls for road user charging, reform of urban water and electricity markets and an end to inefficient land taxes.

Federal governments have a mixed record in accepting or ignoring the independent organisation’s recommendations. New chief executive Romilly Madew replaced Phillip Davies in April. 

Grattan Institute transport and cities program director Marion Terrillpraised aspects of the latest audit, including calls for best-practice public transport funding, but she said the absence of road user charging was “the most striking silence”.

“The reform has died a bit,” she told The Australian Financial Review.


“The government was bold and said it would hold an inquiry into road user charges led by an eminent Australian. It was a very reputable decision in that there’s been a whole series of reports that have called for this in one form or another … but no eminent person ever got appointed.”

Last year, Deputy Prime Minister Michael McCormack dropped the inquiry commitment.

“Although Infrastructure Australia mentions that the inquiry is yet to commence, the rest of the document is essentially silent on road user charging,” Ms Terrill said.

“Given that IA first recommended this in 2016, it is strange to essentially not recommend it again in this version.”

Missed opportunity

She called the audit “more cautious” than previous releases, describing a missed opportunity to advocate for congestion charging and fuel excise changes.

“You can’t build your way out. Whether you build roads or you don’t, you still need to think about how to get more efficient use.”

There was Coalition pushback against the audit, with some MPs defensive about investment to reduce traffic congestion in major capitals.

Urban Infrastructure Minister Alan Tudge said the audit was based on year-old data, predating $23 billion in announcements from the Morrison government.

Prosper Australia research director Karl Fitzgerald, an advocate for stamp duty reform, said the report should have been “bolder”.

“Replacing stamp duties with a broad land tax is certainly important. The fiscal infrastructure is there via the municipal rating base. Just add the land value capture component to the municipal rating base.

“This ensures all property holders contribute in some way to what are often very generous windfalls. Genuine vision would also see that land bankers close to new infrastructure hot spots also pay something back for their double win of new amenity and the added rezoning capacity.”

Executive director Peter Colacino said Infrastructure Australia still supported all its previous recommendations.

‘More forward looking’

“IA exists in a five-year policy cycle. The audit is the start of that process,” he said.

“This audit is a bit more forward looking and a bit clearer about where we are trying to get to, and then it looks back to where we are now in order to expose a gap.”

Mr Colacino said the Council of Australian Governments was leading work on urban water reforms, while the NSW and South Australian governments were franchising public transport services.

“There’s been some big movement on that issue. It can be a difficult area of reform for government but it’s one that delivers both better services to customers and better value for money for the taxpayer,” he said.

Labor seized on warnings about the need for investment in electricity generation and gas pipelines to stop increasing costs to users.

“This government’s inability to take a sensible approach to energy policy, which acknowledges the challenge of cutting emissions and supporting renewable energy, is driving up energy prices,” Opposition spokesman Mark Butler said.