Infrastructure expert calls for red-tape reform

INFRASTRUCTURE expert and News Corp director Sir Rod Eddington has said senior business leaders in Australia believe the costs of doing business are rising and industrial relations uncertainty is holding them back.

By InvestSMART · 23 May 2012

By InvestSMART ·
23 May 2012

Comments

"If you listen to people like chief executives, this is people like Jac Nasser, the chairman of BHP . . . they're pretty clear: it's more expensive to get things done, the industrial relations uncertainty is real," Sir Rod, chair of the federal government advisory body Infrastructure Australia, said yesterday.

Sir Rod said regulatory reform was essential to boost Australia's short to medium-term productivity.

"If you talk to people in the space . . . they'll tell you the things that worry them are duplication of the environmental assessment process between the federal and the state government . . . higher bid costs and disproportionately complicated bidding processes," he told an Australian British Chamber of Commerce lunch. "They'll talk about some of the challenges they feel in industrial relations . . . and the way they believe that's a step backwards rather than forwards.

"They'll talk about regulation as it relates to 'green tape', as opposed to red tape. My point is that if you want real short-term productivity improvements, it's regulatory reform."

Infrastructure Partnerships Australia chairman Mark Birrell also stepped up calls for small Australian super funds to merge in order to gain the funds and expertise to invest in infrastructure, noting that sovereign wealth funds and offshore pension funds recently snapped up Melbourne tollroad operator ConnectEast.

"Two-thirds of [Australian] superannuation funds have no investment in infrastructure they'll have investments in real estate, hotels and things like that but not infrastructure.

"And one of the reasons for that is that many of those funds are too small to have the internal skills to be able to research.

"We need amalgamation of super funds so they have greater scale, they'll have greater reach in terms of dealing with high quality assets."

Sir Rod and Mr Birrell were both upbeat on the prospects for Australia's education sector, with Mr Birrell tipping it could leapfrog iron ore and coal to become Australia's top export earner within decades. "Putting infrastructure money into universities I think is an absolute no-brainer I think the business case would be profoundly strong," Mr Birrell said.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What is ‘red tape reform’ and why is Sir Rod Eddington pushing for it?

Sir Rod Eddington says regulatory reform — often called cutting ‘red tape’ — is essential to lift Australia’s short- to medium-term productivity. He and business leaders argue that duplicate environmental assessments, complex bidding processes and other regulatory hurdles are making projects more expensive and slower to deliver.

How does regulatory duplication between federal and state governments affect infrastructure costs?

The article explains that duplication of environmental assessment processes between federal and state governments increases bid costs and adds complexity. That duplication can raise the overall cost of getting infrastructure projects approved and built, which matters to investors because it can reduce returns and delay projects.

What does ‘industrial relations uncertainty’ mean for everyday investors in infrastructure?

According to Sir Rod and business leaders quoted in the article, industrial relations uncertainty refers to labour and workplace issues that make it harder or more costly to complete projects. For investors, that uncertainty can lead to higher project costs, slower timelines and potentially lower investment returns.

What’s the difference between ‘green tape’ and ‘red tape’ mentioned in the article?

The article contrasts ‘green tape’ (environmental regulation) with ‘red tape’ (general regulatory burden). Sir Rod’s point is that while environmental rules matter, broader regulatory reform to remove unnecessary duplication and complexity — i.e. cutting red tape — would deliver quicker productivity gains.

Why are industry leaders calling for small superannuation funds to merge?

Infrastructure Partnerships Australia chairman Mark Birrell says many smaller Australian super funds lack the scale and internal expertise to research and invest in infrastructure. He argues amalgamation would give funds greater scale and capability to access high‑quality infrastructure assets.

What example does the article give of overseas funds buying Australian infrastructure, and why should investors care?

The article notes that sovereign wealth funds and offshore pension funds recently snapped up Melbourne tollroad operator ConnectEast. This shows strong competition from global investors for Australian infrastructure assets, which can affect asset prices and opportunities for domestic investors and super funds.

How could investing in universities become an opportunity for Australia and investors?

Both Sir Rod and Mark Birrell were positive about Australia’s education sector. Birrell suggested that putting infrastructure money into universities is a strong business case and could help education grow to become one of Australia’s top export earners over coming decades — a potential opportunity area for investors and funds that back education-related infrastructure.

What practical effects might red tape reform and super fund consolidation have on everyday investors?

If regulatory reform reduces duplication and bidding complexity, projects could be delivered faster and cheaper, potentially improving returns for investors. If super funds consolidate and gain scale, they may invest more in infrastructure domestically rather than seeing assets bought by overseas funds — which could increase Australian investor access to long‑term infrastructure returns. The article presents these as potential outcomes rather than guarantees.