Australia: Infrastructure reform - he who pays the piper, calls the tune

Last Updated: 8 March 2016
Article by Owen Hayford

Key Points:

Infrastructure Australia wants the Federal Government to drive reforms by making its funding for a project contingent on the other government's delivery of reform.

Infrastructure Australia, the Federal Government's infrastructure policy advisory body, calls its most recent Australian Infrastructure Plan a "reform document", and it's clear its primary interest is in wide-ranging reforms to the way we invest in, deliver and use our infrastructure.

Like many observers of the Australian economy, Infrastructure Australia is frustrated by the level of reform achieved by successive governments, at all levels, over the last two decades. It says "we need to re-establish our reform credentials... If we don't, we face a future of congestion and constraint. Increasing bottlenecks and costly delays will mean it takes longer for Australians to get to work or home, our goods will take longer to reach port or shops, and the many services we rely on from infrastructure will decline." And no-one disagrees with this.

The problem is, in Australia most public infrastructure projects - roads, passenger railways, light rail, ports, water, electricity, hospitals, schools, courts, prisons, stadiums and entertainment precincts - are procured and delivered by State and Territory Governments, with or without federal financial assistance. Accordingly, it is generally the state and territory governments that determine how infrastructure will be funded, delivered, used and regulated.

Because of our three levels of Government, long history of private sector participation in public infrastructure, and short electoral cycles, meaningful reforms to the ways we invest in, deliver and use our infrastructure have proved to be very difficult. Looking just to the Commonwealth Government (even though it often holds the purse strings), let alone an advisory body like Infrastructure Australia, to bring about reform therefore won't work.

For example, the Asset Recycling Initiative attempts to encourage state and territory reform by recycling - new language for privatising - publicly owned infrastructure, and investing the proceeds in new, productive infrastructure, but take-up has been limited. While the New South Wales Government was able to get a mandate for its program, the Newman Government was defeated on a no asset sales platform. And we haven't seen much asset recycling elsewhere. So, carrots have been less than appetizing.

But Infrastructure Australia has a new strategy, involving a stick. It wants the Federal Government to drive (force) the delivery of reforms by making its funding for a project contingent on the other government delivering required reforms. The concept of tying federal funding to conditions aimed at implementing the then Commonwealth Government's reform agenda is not new - we have seen it before, but not in relation to infrastructure policy.

Although the Federal Government is yet to respond, we can expect it will embrace this concept, especially when it comes to additional funding, above existing projected allocations. Indeed, it's already flagged that State Governments might have to employ "value capture" - one of the reforms advocated by Infrastructure Australia - to qualify for Federal infrastructure funding.

So what are the reforms that State and Territory Governments may need to commit to if they're to receive Federal infrastructure funding?

The first type would be project-specific conditions, such as user-charging mechanisms (e.g. toll roads), value capture, wider land use outcomes (such as greater housing density or new public spaces), sustainability and resilience outcomes (such as emissions reductions from electricity generators and transport modes, or infrastructure that withstands extreme weather events), and the use of Building Information Modelling.

New governance tools would become mandatory. The National Governance Principles, to be developed by Infrastructure Australia, will articulate best practice planning and project decision-making processes (such as long-term infrastructure plans, minimum infrastructure service standards, project development studies and publication of full project business cases, meaningful community engagement, post-completion reviews throughout the lifecycle, and corridor preservation mechanisms). So no more rushed project announcements without decent business cases.

A national Infrastructure Performance Measurement Framework would provide routine measurement and publication of the performance and efficiency of projects, networks (eg. road networks) and systems (eg. public transport system).

Financing could be improved by more effective use of federal, state and territory balance sheets through public sector borrowing, and more transparent reporting of "good" verses "bad" debt.

Finally, wider reforms not specifically related to a project could also be in the mix. An obvious one would be improving the governance and operation of our cities by reducing urban sprawl, council consolidation, and updating long-term land-use plans. But they could also include microeconomic reforms in energy, telecommunications, water and transport: greater private sector involvement in owning and operating infrastructure; more flexible electricity tariffs; full deregulation of electricity and gas retail prices; whole-of-system road user charging; corporatized road network model; increased cost recovery on public transport services, or franchising them to create contestable markets.

No one imagines that this wish list will be simple to implement, but this new regime will be very attractive to the Federal Government, and State and Territory Governments should prepare themselves for change.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.