Report Urges Infrastructure Funding Overhaul

New research, commissioned by the Property Council, has shown that millions of dollars earmarked for infrastructure is potentially being wasted through antiquated approaches to grants funding.

The report, undertaken by infrastructure advisory group Integran, has proposed a radical rethink of how governments approach infrastructure grant funding after assessing domestic and overseas models.

“Particularly in Queensland where the State Government is fiscally constrained, it is critical that we make every infrastructure dollar count,” Property Council Executive Director, Chris Mountford, said.

“The State Government is due to release their final infrastructure plan within weeks. This plan must outline steps that will be taken to ensure all infrastructure funds are spent as efficiently and effectively as possible.

“Rationalising the current muddled network of infrastructure grants must form part of this strategy.”

Infrastructure funding from all levels of government is currently dispersed to projects across a large variety of grant funding programs, such as Federal Black Spot funding or Roads to Recovery funding.

The analysis has found there is no clear strategic oversight of the purpose of the multiple overlapping funding streams and there is little objective assessment of the effectiveness of the spending.

“The report has found that there is little coordination across the various government funding pools and programs, leading to inefficient spending and questionable efficacy,” Mr Mountford said.

“Under the current overlapping system a road project could easily receive funding for the same work though Federal Black Spot funding, Roads to Recovery funding, the Safer Roads Sooner program, not to mention a number of State Government programs."[urbanRelatedPost][/urbanRelatedPost]“It has got to the point where the cost to government of administering the current duplicative system accounts for a considerable portion of the overall spend.”

Integran found that many funding grants do not require any benefit to be realised in order for a project to be funded. Other grants provide funding regardless of the approach to financial management as they are assessed on an ‘effort neutral’ basis.

“Our current ‘every child gets a prize’ approach means that projects with genuine merit, that will generate real economic benefit to a region, are missing out on adequate funding,” Mr Mountford said.

The findings echo reports from the Productivity Commission, Infrastructure Australia and the Australian National Audit Office who have all expressed the urgent need to reassess how infrastructure project funding is allocated.

The report has recommended a thorough review of governance arrangements, the organisational structure and culture that currently drives infrastructure investment.

“We need to break down the siloed approach of the past and look to aggregate this funding, prioritise it effectively and evaluate its success,” Mr Mountford said.

“The multitude of different grant funding buckets need to be consolidated into a much bigger pool to give us bigger bang for our buck.

“The prioritisation process for this larger pool needs to be properly aligned to agreed strategic objectives, such as those identified in regional plans, rather than the current ad hoc approach.”

The report recognised that short-term infrastructure grant funding such as the National Disaster and Relief Recovery Arrangements should continue to be used to fund projects that arise from unexpected events.

“Queensland is a diverse state and some local communities rely heavily on grants funding, it will continue to be appropriate that some regional areas have access to infrastructure funding avenues outside a strategic priority process,” Mr Mountford said.

“Our current infrastructure funding maze is the product of successive governments failing to make necessary reform, getting our framework for investment right will be essential to unlocking economic activity and achieving jobs growth in Queensland."