Raw Aus Pol

Simple Wins / Australian Red Tape Every step, every clock, every authority -- written down.

The longest wait in Commonwealth infrastructure funding is waiting for a Budget

resequence ~90 days savedproposal

A proposal that clears evaluation in June is not refused. It waits for the next Budget. Same project, same merits, up to a year of difference depending on when the paperwork landed.

Steps this would change

Rationale

Every step in the funding chain except one is somebody doing work. The Infrastructure Australia evaluation is genuine merits assessment. The funding agreement is genuine negotiation. The milestone payments follow construction.

The Budget wait is not work. During it, nobody is assessing anything, nobody is negotiating anything, and the project does not improve. It is the cadence of the decision-making forum, imposed on a queue of proposals that arrive continuously.

Modelled at 180 days, the midpoint of a wait running from near zero — for a proposal that happens to complete in February — to nearly a full year for one that completes in June. That is a scheduling wait in the precise sense this database uses the term: elapsed time unrelated to the substance of what is being decided, and therefore recoverable without lowering any standard.

And the cost is not only the delay. An annual commitment cycle creates a deadline, and a deadline applied to business cases produces business cases written to a deadline. It also concentrates announcements, which is politically useful and analytically unhelpful — thirty projects committed on one night receive one night of scrutiny between them.

What should change. Not the Budget. The Budget is a constitutional and political instrument and this proposal has nothing to say about it.

What should change is the decision being tied to the announcement:

  1. A standing program allocation for evaluated proposals, with commitment decisions made against it as evaluations complete, rather than banked until the next Budget night. The appropriation remains annual; the commitment does not have to be.
  2. Publish the elapsed time between an Infrastructure Australia evaluation and a Commonwealth funding decision, project by project. It is not published now, which is why the 180 days above is this project's estimate rather than a figure — and why nobody can currently say how large this wait actually is.
  3. Let evaluation and commitment overlap where a proposal is plainly within an existing program envelope, rather than running strictly in series.

Who acts: the Commonwealth. The saving is modelled conservatively at 90 days, half the modelled wait, on the basis that some proposals would still be timed to a fiscal event for good reasons.

What is being traded away

Annual commitment is a discipline as well as a delay. Considering thirty proposals together, against one envelope, forces a comparison between them. Deciding each as it arrives means every proposal is assessed against the money remaining rather than against the alternatives, and the ones that arrive early do better than the ones that are better. That is a real cost and it may exceed the delay it removes.

Fiscal control is the reason the cycle exists. Commitments made continuously against a standing allocation are harder to constrain than commitments made once a year with the full forward estimates in view. Every finance department in the country would object, and the objection is sound.

Announcement value is not illegitimate. Governments commit money in Budgets partly because Budgets are where governments explain what they are doing. Dispersing infrastructure commitments across the year would reduce the coherence of that account, and this database has argued elsewhere for more public visibility of decisions, not less.

And the 180-day figure is an estimate the reform's own recommendation is designed to fix. The elapsed time between evaluation and commitment is not published, so the size of this wait is inferred from the structure rather than measured. If it turns out to be small, this entry is a solution to a problem that does not exist — which is why recommendation 2 should happen first, and would cost nothing.

Precedent

Standing appropriations with delegated decision-making already exist across the Commonwealth — the Medical Research Future Fund, Housing Australia Future Fund disbursements, and the Infrastructure Investment Program's own contingency allocations all commit money outside the Budget announcement cycle.

Sources

  1. Infrastructure Australia Act 2008 (Cth); proposals seeking Australian Government funding above a monetary threshold are evaluated by Infrastructure Australia
  2. National Land Transport Act 2014 (Cth); Infrastructure Investment Program commitments are made through the Commonwealth Budget process
  3. The elapsed time between an Infrastructure Australia evaluation and a Commonwealth funding commitment is not published project by project