Five year national productivity review released

The Productivity Commission has released a report reviewing national productivity over the next 5 years, looking at the factors and influences that may affect Australia’s economic performance over the medium term, in order to offer advice on where the priorities should lie to enhance national welfare.

The report, Shifting the Dial: 5 year productivity review, proposes reforms to improve the functioning of cities, such as better transport infrastructure and improved access to housing which would also improve labour mobility within cities and the functioning of the labour market more generally.

The review states that despite changes over the last five years, there have been continuing instances of poor, very costly, decisions. Observers have noted that the current WestConnex (Sydney) and West Gate Tunnel (Melbourne) projects have cost estimates significantly lower than experience would indicate. The difference in cost estimates between the median and ‘worst case’ scenarios for both WestConnex and West Gate Tunnel projects was six per cent whereas the average actual difference across all projects completed in the past 15 years was 26 per cent.

The Australian Logistics Council said the review provides a welcome injection of common sense into the national conversation about transport and urban planning policies.

ALC Managing Director, Michael Kilgariff, said, “The message in this report is very clear. Unless we take definitive and practical action to address issues such as urban congestion and the efficiency of our transport networks, the nation’s economy and the wellbeing of its citizens will suffer.

“It is particularly pleasing to see the Commission making recommendations that align with many of ALC’s long-established policy positions, including better alignment between freight movement and planning, that infrastructure proposals be subjected to a public cost-benefit analysis, that road funds be established from hypothecated road-related revenues, and that state and territory governments consider adopting a road user charging pilot program.

“The Commission’s focus on urban congestion is especially welcome. As this report notes, the problem is already costing our economy $19 billion a year, and without remedial action, that will grow to over $31 billion by 2031.

“As ALC has consistently said, policies which restrict or ban the movement of freight vehicles in particular areas, and especially in CBDs, are neither realistic nor desirable. It is heartening to see the Productivity Commission has drawn a similar conclusion, and calls upon governments to address the ad-hoc and anticompetitive planning policies that have given rise to the congestion problems that now bedevil our cities and their surrounds.”

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