Monday, May 12, 2014

The cost-benefit analysis of bitumen boondoggles

The right banged on and on about cost benefit analysis for the NBN and other big-ticket projects announced by Labor under Rudd and Gillard. In government, it seems they are going to break yet another promise with rank hypocrisy, by abandoning all thought of prudent infrastructure planning in favour of propping up Liberal premiers by funding their irresponsible bitumen boondoggles.
Doing precisely what [Productivity Commission chairman] Harris says politicians should not do, Abbott and the Victorian premier, Denis Napthine, have already announced that the commonwealth will be chipping in an additional $1.5bn to the second stage of the East West link. 
Abbott said the commonwealth's contribution depended on the Victorian government providing a business case for the second stage, but he was “confident it is a worthwhile investment”. He didn’t say how he could be so confident without a business case, or how likely it was he’d take back the cash if it didn’t pass muster. Presumably, not very.
Lenore Taylor does what a good journo should do, which is hold politicians to what they say - in this case, what Tony Abbott said in May 2012, reiterating an announcement from 2011:
There will be a published cost benefit analysis for any infrastructure project to which a Coalition government commits $100 million or more. 
As with most other Liberal incompetence it was plain to see before the election, as Anthony Albanese called it with his speech to the same set of suits during the 2013 campaign.
And despite this promise of  a “new approach”, the Federal Coalition is already failing to practice what it  preaches.
It has agreed it would take  the advice of Infrastructure Australia and only commit funds to projects with a  cost-benefit analysis.
Yet Tony Abbott has already  promised billions of dollars to projects not currently recommended by  Infrastructure Australia, well before any business case or cost-benefit analysis  has been conducted.
One wonders whether Judith Sloan will stick up for her Productivity Commission mates on this one.

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