Wise infrastructure investment could leave Aussie households $3000 a year better off.

The significant benefits of changing the way Australia plans, funds, delivers and uses infrastructure were highlighted in the first Infrastructure Australia Plan released Wednesday.

Recommendations include that motorists be charged based on how much they use the roads, and that the National Broadband Network be sold to private owners.

Infrastructure Australia chairman Mark Birrell said the measures, which include improving the water sector and national electricity market, could provide a big boost to households by 2040.

“By completing the major reforms to infrastructure markets, the average Australian household will be almost $3000 better off every year.” Mr Birrell said.

If governments acted now, Mr Birrell said Australia could get the infrastructure it needs and improve living standards and productivity.

For example, improving heavy vehicle access to a farm may mean that goods will be able to get to market sooner and at a lower cost.

USER PAYS

The report suggests that the balance between what users and taxpayers paid for infrastructure needed to be fairer, “recognising that those who benefit the most — the users of infrastructure — should make a greater contribution”.

It says all drivers should be charged for using roads within 10 years, while fees for those in heavy vehicles should be introduced within five years. Governments could then get rid of existing taxes and charges such as fuel excise and registration fees.

The unfairness of the current system was highlighted at the National Infrastructure Summit last year, which noted that it most benefited those who drove fuel efficient cars. Also, as technology improved, money collected from fuel excise will drop even further, making it even harder for governments to recoup costs. This contribution will be further eroded as driverless cars become more popular.

Current fees charged for the use of roads and public transport already fall far short of covering the costs of providing the services.

Cost recovery is even worse on public transport such as buses and trains.

In Australia’s capital cities, fares cover just 22-30 per cent of the cost of services, much lower than other cities including Toronto (73 per cent), Barcelona (90 per cent) and Chicago (57 per cent).

Introducing a user pays system would improve the level of services as well as help with the funding of roads. It would also free up taxpayer dollars to invest in other priorities like social services, health and education.

Other countries such as Singapore and the US are also already looking at charging motorists based on distance, location, time and the type of vehicle they are driving. Technology such as satellites now makes this much easier.

Prime Minister Malcolm Turnbull said Wednesday that Australia had been less imaginative than it should have been when it came to funding infrastructure.

But while a better calibrated user-pays system had its attractions, Mr Turnbull said it had to be introduced in a fair and equitable way.

“You can see the inequities that would arise if you were to jump into road pricing or congestion pricing as they have done in London, immediately,” he told reporters at the launch of the report in Brisbane.

“It is important to put these things on the table and examine them.”

KEY INVESTMENTS

As part of its plan, Infrastructure Australia identified 93 projects and initiatives on its Infrastructure Priority List. Key investments include:

• New metro rail systems in Sydney, Melbourne and Brisbane;

• Road and rail initiatives to bust urban congestion in Perth;

• Public transport improvements in Adelaide and Canberra;

• Urban renewal in Hobart; and

• Metropolitan water supply upgrades to support Darwin’s growing population.

The list was developed by the body’s independent board using submissions provided by state and territory governments, peak bodies and the community.

Suggestions include that larger cities plan for timetable-free “turn up and go” train and bus services — similar to those in New York, London and Paris.

In Sydney it flags the Western Sydney Airport and a Sydney metro connecting Chatswood to the CBD and the city’s south, as high-priority initiatives in need of further assessment and development.

Sydney’s three key bus corridors were also in need of significant improvements to boost transport efficiency and discourage the increased use of private cars.

The report says a business case should be developed for a second airport at Badgerys Creek in Sydney’s west, positioned away from major population centres and operating without a curfew.

“The limited capacity of the existing Sydney airport is a significant constraint to aviation growth in the Sydney basin,” Infrastructure Australia said.

Without additional capacity, 42,000 potential jobs will be unrealised in the next 20 years, it says.

In Brisbane it recommended another rail line. The existing rail connection into the CBD is set to reach capacity in the next decade, and the road and bus network already at or close to capacity.

In Melbourne, a metro with twin nine kilometre tunnels was recommended, as the city’s rail network operating at or close to capacity.

HIGH SPEED RAIL

The report recommends preserving a corridor for future development of a high-speed rail link between Melbourne and Brisbane, as well as for new ring roads around Melbourne and Sydney.

Deputy Prime Minister Barnaby Joyce said the report was “visionary”, proposing an inland rail link between Melbourne and Brisbane.

“This is something that makes people excited about the future,” Mr Joyce said.

Deputy Prime Minister Barnaby Joyce, Luke Howarth Member for Petrie, and Prime Minister Malcolm Turnbull at the launch of the Infrastructure Australia Plan in Brisbane. Photo: Liam KidstonSource:News Corp Australia

The link would make roads safer and commerce more efficient, he said, while driving prosperity to towns in between the major cities.

Major Projects Minister Paul Fletcher said the report was an important planning tool for Commonwealth and state governments in assessing which projects would go forward.

NATIONAL BROADBAND NETWORK

Over the medium term, the report recommends that the NBN be transferred to private ownership, possibly when the rollout is complete. It also believes electricity and water infrastructure should be privatised.

It notes that the experience across local and global markets showed that greater private sector involvement, when properly regulated and incentivised, could make infrastructure services more efficient, lower cost and more flexible.

It was also the most effective way of encouraging innovation because private operators would be more likely to find new ways of meeting customer demands and responding to technological change.

“Where public transport has been franchised through a competitive process, such as Sydney’s ferries and Melbourne’s trams, consumers have benefited from increased investment and higher quality services,” the report said.

INCENTIVE TO CHANGE

By 2031, Sydney, Melbourne, Brisbane and Perth will need to accommodate an extra 5.9 million people, placing pressure on existing infrastructure.

The report said Australia must recapture the reform spirit of the 1980s and 90s and initiate a new wave of policy and legislative reforms.

It recommends linking Commonwealth payments to State and Territory governments for infrastructure, to the delivery of national reform objectives.

“Some of the ideas will be tough to progress, but let that all be part of an open public dialogue about the infrastructure people want, the outcomes it should deliver and the best ways to plan and pay for it,” Mr Birrell said.

“The public policy changes and major projects in the 15-year plan, once delivered will drive our nation’s prosperity and maintain our quality of life.”

The plan was developed following consultation on the Australian Infrastructure Audit report. IA will update the plan at least every five years, and the Priority List regularly throughout each year.

For more information go to www.infrastructureaustralia.gov.au