Regulatory reform the top priority: Eddington

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.

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.

"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, chairman 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. 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."

The 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 the Melbourne toll road 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," Mr Birrell said.

"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 upbeat on the prospects for Australia's education sector, 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," he said.

Sir Rod also drew attention to the work of the infrastructure finance working group set up by the government to find better ways to get private sector capital into infrastructure projects. "You can't just hope that someone's going to come along and sprinkle pixie dust and things will happen," he said. "We need the right investment vehicles, the right constructs to ensure capital flow."

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