Beat Budget blues by getting private sector to pay, Infrastructure SA told
Chris Russell, Sunday Mail (SA)
September 7, 2019 10:00pm
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Toll roads and privatisation of public infrastructure are desperately needed to get the state moving, business leaders say.
Infrastructure SA is formulating a 20-year strategy which will underpin thousands of jobs and billions of dollars in spending by the State Government.
Peak bodies including Business SA, Australian Industry Group, the Civil Contractors Union, mining companies and lobby groups have called for a rethink in how to fund projects.
Several groups specifically call for tolls, saying businesses accept paying them to speed up projects and improve efficiency.
Other funding options include public private partnerships (PPPs) for schools and hospitals such as the new Women’s and Children’s Hospital, energy projects, housing or water supply as well as financial bonds where companies make investments for steady returns.
Infrastructure SA is an independent advisory body and has a mandated task is to investigate different funding models, its chief executive, Jeremy Conway, said.
“We’re all aware there are Budget constraints and so you need to explore what options may be available,” Mr Conway told the Sunday Mail.
When parliament established Infrastructure SA, Premier Steven Marshall highlighted that it would provide “advice on appropriate funding and financing models”.
Mr Marshall yesterday did not comment directly on the renewed calls for toll roads but, before the 2018 election, said his government “will not support tolls”.
However, he is understood to be open to various innovative private sector financing arrangements.
The government is already tendering for PPPs on the new north and south schools at Angle Vale and Aldinga.
“Infrastructure SA’s 20-year strategy will ensure SA has a long-term infrastructure plan, something we have lacked in the past”, Mr Marshall told the Sunday Mail.
This year’s Budget had included $11.9 billion of infrastructure projects over the next four years to support jobs and the economy, he said.
That program will push the state’s net debt up from $13.6 billion as at June this year to $21.3 billion by June 2023.
Calls from business groups in submissions to Infrastructure SA include:
EMPLOYER body Australian Industry Group said the Government should sell or lease public assets and then recycle the money into new projects such as rail or road.
BUSINESS SA said its members were “open to the potential for toll roads to expedite road infrastructure”.
SA Chamber of Mines and Energy called for strategies to unlock identified but stranded mineral riches — which could include creating a new government body to build infrastructure corridors which companies would pay to use.
MINING company OZ Minerals said it was willing to invest in projects to be shared with the public or other companies.
THE Civil Contractors Federation said “a user-pays system like toll roads for heavy freight routes is a logical option”.
THE Centre for Automotive Safety Research said PPPs could deliver innovative solutions to improve road safety.
FREIGHT lobby group the Australian Logistics Council said there was “increasing acceptance” that the way Australians pay for roads must change because taxes and fuel excises were not keeping pace with demand.
THE Property Council said “the lens of infrastructure delivery needs to be switched from ‘public funding necessity’ to ‘private sector opportunity’ ”.
President of Parliament’s Economic and Finance Committee, Waite MP Sam Duluk, said the Government wanted to attract private money especially from super funds.
Australian Industry Group SA head Stephen Myatt said it was a “matter of good government management” to consider privatisations such as the Lotteries Commission and the Motor Accident Commission “to name a few”.
A Federal Government program from 2014 and June this year paid states to sell assets to the private sector and roll the money into new projects — with NSW getting more than $2 billion to sell electricity corporations and other assets and then invest in underground motorways.
That program has ended but the Federal Government welcomes privately funded infrastructure.
“The Australian Government supports the use of private financing mechanisms, including toll roads,” a spokesperson for Deputy Prime Minister and Infrastructure Minister Michael McCormack said.
The Property Council called for new funding models.
“The private sector is, in many cases, willing and able to identify infrastructure shortfalls, plan, fund and build the necessary projects, without the need for government to fund the entirety of the project,” the council’s SA executive director, Daniel Gannon, said.
Mr Conway said Infrastructure SA is working through more than 100 public submissions and input from government agencies and meeting interest groups.
Urgent attention was needed on finalising the North-South Corridor and then connecting that to the South Eastern Freeway.
Suggestions have included the RAA calling for Cross Rd to be upgraded, the SA Freight Council’s tunnel under the Hills to Springbank-Daws roads and the Liberal Party election policy of a bypass from Monarto sweeping behind Adelaide Hills through the Barossa.
“They’re big ticket items,” Mr Conway said.
“There’s also been conversations around technology and how it might change things in the future such as autonomous vehicles, telehealth and digital delivery of services.”
Many submissions emphasised the importance of regional areas in achieving the Government’s growth targets of 3 per cent a year.
Infrastructure SA aims to report to Mr Marshall by about March next year, with the Government then to accept, adapt or reject the 20-year strategy.
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