National

It’s budget time across the land.   With that comes a few surprises (a la superannuation) along with an avalanche of old chestnuts that accompany the headlines and debates that occupy our television screens and mountains of column centimetres of print press.   You know the ones, “There’s not enough money for health and education and law enforcement and security need greater funding”.   Infrastructure per se gets a mention from time-to-time as do tax cuts and welfare payments.

What about the budget sleepers?   There is one that has a big impact on our country and certainly the civil construction industry.   This issue is one that has remained dormant for a long time and is building in terms of future consequence and is punished because it is not politically sexy or well understood publicly – well not until it affects people personally.   It affected me once and cost me a lot of money.

The budget sleeper I speak of is infrastructure maintenance.   More explicitly, it is about the lack of funding available to undertake much needed upgrades to a raft of existing infrastructure that has been in decline for too long.  There’s no doubt it has been on the radar of industry for a long time.   It is an ongoing discussion that is occurring with politicians and the bureaucracy at all levels and yet maintenance is under-funded repeatedly and at great future cost to the community and taxpayers.

Infrastructure maintenance attracted considerable attention in Infrastructure Australia’s 15-year Australian Infrastructure Plan.   The report noted “The majority of infrastructure that Australians will use in the next 15 years (and indeed the next 50 years) has already been built, but this infrastructure will require substantial additional funding for maintenance, renewal and upgrade as population and usage grows.”

The challenge for the civil construction industry is to get more people listening to this message, a task that is already underway in some jurisdictions.   Of course, we know that we will need more and more new infrastructure to deal with our growing population and it is always great to announce new infrastructure, build it, forget about it and then move onto the next project.   It just can’t and shouldn’t work like that and importantly be allowed to continue in that way.   There needs to be greater provision for maintenance and a greater focus on whole-of-life costs in delivering projects.

Of great concern but not surprisingly, the Infrastructure Australia Audit that preceded the 15-year Australian Infrastructure Plan “found that sections of our infrastructure asset base are already in poor or declining condition.   In short, there is an infrastructure maintenance deficit in Australia – though the scale and extent is often unknown and its potential financial impact rarely accounted for.  It can therefore be considered a ‘hidden deficit’.”

The Infrastructure Plan highlighted some of the positive steps being undertaken to address maintenance over the life of infrastructure.   Most notable was the ‘comprehensive balance sheet’ approach being adopted in New Zealand to focus on whole-of-life and whole-of-government costs.  The New South Wales approach of “locking in medium-term contracts for road maintenance” is used as an example of allowing investment decisions to be made on a more efficient basis as opposed to being subjected to annual budget cycles.

It’s never going to be a perfect world out there but to allow infrastructure maintenance to be constantly neglected as political and other spending priorities overtake this important activity is consigning future generations to greater exposure.   And let’s not forget the sheer waste of money that went into delivering the infrastructure in the first place.

The public certainly wouldn’t accept infrastructure delivered in second-hand condition and yet it seems acceptable that after a particular period of time it is somehow alright for infrastructure to perform and deliver to the community in a sub-optimal way.

One of the first steps, as identified in the Infrastructure Plan is to acknowledge that there is a problem, understand the extent of the problem, prioritise the rectification and make provision to commence the task of bringing some of our infrastructure back to useful and safe operation.   Until that occurs we will only see the infrastructure maintenance deficit deepen.   Nobody is saying this is easy, it is simply something that needs to happen.

Clearly the bigger challenge politically is to come up with a system to ensure that the maintenance task can be funded over and above the delivery of new infrastructure.   This became one of the more contentious recommendations in the Infrastructure Plan where road user charging was raised.   Whilst it is not just roads suffering from infrastructure deficit attention, it is one of the easier examples of where a user pays system can be implemented to deal with a major issue in desperate need of a solution.

By the time this column gets to print the Federal Budget and most state and territories will have handed down their budgets.   I suspect that infrastructure maintenance will still remain as the unsexy poor cousin in the infrastructure spending announcements for most jurisdictions.   There are many reasons to elevate this discussion and it is beginning to occur in some very clever ways although much more needs to be done.

In the meantime I will try and avoid unattended road maintenance deficits which can have a particular and costly impact on some motor vehicles.