A leading Australian public policy institute has called for tighter guardrails, and greater transparency in federal transport funding, saying small road projects are best handled by state and local governments.
The Grattan Institute produces public policy recommendations on a range of issues, including transport and public health.
The Institute's Transport and Cities program senior associate Dr Ingrid Burfurd said the federal government should not commit to projects, costing more than $100 million, without first considering an evaluation by Infrastructure Australia.
"Infrastructure Australia's evaluation should include a cost-benefit analysis and a priority ranking for the project, relative to other eligible projects," Dr Burfurd said.
"The evaluation should be made public immediately.
"Ministers and other politicians who make transport infrastructure promises worth more than $100 million should provide the public with information on their cost estimate, and how developed the cost estimate is."
That information should be based on a range of possible cost estimates and be clear about the basis for the assessment of the project's benefits.
The federal government should also restrict its funding to nationally-significant projects on the National Land Transport Network.
"Politicians should not announce major projects which have yet to be assessed and recommended by Infrastructure Australia, or an independent state advisory body."
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Funding shortfall
Over the past 15 years, Victoria had received a smaller share of federal funding than the more marginal states of Queensland and NSW, relative to population levels, population growth, size of the road network, share of passenger or freight travel, or the cost to state governments of running the transport system.
"Queensland received 24 per cent of federal government funding for transport infrastructure but has 20pc of the population, while NSW received 33pc of the funding despite having less than 33pc of the population.
"And although Victoria has 26pc of the population, it received only 18pc of federal government funding for transport infrastructure."
Another anomaly was the $4.9 billion Urban Congestion Fund, established in the 2018-19 budget.
"There are no publicly-available criteria for Urban Congestion Fund projects on its website," Dr Burfurd said.
"Although discretion can be applied in other funding programs, the Urban Congestion Fund is the clearest example of a transport infrastructure slush fund."
Seats held by Coalition members attracted more money than seats held by Labor, the Greens, other minor parties, or independents.
"Under the Urban Congestion Fund, the average marginal urban seat received $83 million, the average safe Coalition seat received $64 million, while the average safe Labor seat received $34 million."
Dr Burfurd said neither of the major parties paid enough attention to Infrastructure Australia.
"During the 2019 election campaign, only one of the Coalition's 71 transport promises valued at $100 million or more had a business case approved by Infrastructure Australia, and for Labor, it was two projects of 61."
"If history is any guide, we'll continue to see a mix of local and big-ticket promises in the lead up to the election.
"When politicians commit to big-ticket projects without following Infrastructure Australia's advice, there's a risk that large sums of taxpayer money will be spent on projects that aren't in the national interest.
"Bad projects cannibalise good projects: every dollar spent without independent scrutiny is a dollar that could be spent on a project that has been independently assessed as being in the national interest."
Bad projects cannibalise good projects: every dollar spent without independent scrutiny is a dollar that could be spent on a project that has been independently assessed as being in the national interest.
- Dr Ingrid Burfurd, Grattan Institute's Transport and Cities program senior associate
Even handedness
Dr Burfurd said publicly-available criteria for spending helped deliver even-handed outcomes.
"When federal funding for small projects is allocated based on publicly-available criteria, funding patterns are similar under both major parties - and funding isn't biased towards more marginal electorates.
"This is clear when we look at projects costing less than $10 million dollars, funded through the Black Spot and Roads to Recovery programs.
"While spending has increased through time, regional Victorian electorates receive similar shares under both colours of government."
Federal funding on small, local projects has increased - but it should be a state or local responsibility:
"Federal government spending on 'small' projects, worth less than $10 million dollars, has grown dramatically in recent years."
During the two most recent Labor terms of government, each electorate received an average of $26.
Over the following three Coalition terms of government, spending on small projects increased tenfold to an average of $264 million per electorate, per year.
"Increased spending on local projects has occurred in the context of modest increases in federal spending on transport infrastructure - so a bigger share is being directed to small projects, Dr Burfurd said.
"Small, local projects can be very important and beneficial to the local community.
"But these projects should be left to state and local governments, with federal funding restricted to transport infrastructure on the National Land Transport Network."
Victorian Farmers Federation president Emma Germano said it was critical the federal government focussed on projects of national significance, to reduce supply chain costs for agriculture.
"Road funding shouldn't be a political football, used by either party," Ms Germano said.
"Victoria deserves its fair share of infrastructure funding.
"While it is great that there has been a significant increase in infrastructure projects, it is critical that proper consultation is completed with industry and local farmers to ensure that the projects are fit for purpose."
Ms Germano said there were many examples where projects were being rushed and key stakeholders were not being consulted.
"The VFF has had to intervene on a number of infrastructure projects that have failed to consider the surrounding agricultural industries, including rail lines restricting access to neighbouring grain bulk handlers during harvest."