by Brendan Lyon, Chief Executive Officer, Infrastructure Partnerships Australia
Over the past year, the organisation I lead, Infrastructure Partnerships Australia, has been focused on making our information and data publicly accessible – seeking to better inform the national infrastructure debate; thereby allowing the business sector and wider community to discern infrastructure fact from fiction.
Always be measured
With infrastructure increasingly politicised, we are providing reliable data and measurement to close the gap between political narrative on the one hand, and cold hard reality on the other.
For example, we now measure and publish government infrastructure funding levels – in nominal terms to show the dollars – and as a proportion of overall expenditure – showing relative funding ‘effort’ by each jurisdiction.
This is useful in an environment where cuts to infrastructure risk being masked by vague references to the (ever-elusive) ‘innovative’ finance.
A solid example is the Federal Government’s ‘infrastructure budget’ which on closer examination served to substantially reduce federal funding levels, as shown in Figure 1.
Figure 1: Behind the narrative, the Commonwealth Budget materially reduced forward infrastructure funding (nominal and proportional) Source: IPA analysis, available at infrastructure.org.au
Measuring and publishing the actual dollars available in government sector budgets is increasingly important, as infrastructure funding and finance become increasingly conflated in the political debate.
While nominal measures are important, we also analyse each jurisdiction’s funding levels as a proportion of total expenditure.
This allows for a fair comparison of the relative ‘effort’ that each jurisdiction is applying to infrastructure – showing if capital expenditure has grown or shrunk, as a proportion of total budget expenditure.
Figure 2: NSW and Victoria are lifting and the resource states are cutting infrastructure funding as a proportion of receipts Source: infrastructure.org.au, accessed 27 September 2017
This also allows us to rank the states on infrastructure – which we did for the first time this year.
Our new Australian Infrastructure Budget Monitor ranks jurisdictions, based on actual funding levels as a proportion of their total budget spend, with the results shown in Figure 3.
Figure 3: NSW, ACT and Victoria lead the nation – SA & Commonwealth make the largest cuts, while WA brings home the infrastructure wooden spoon cutting infrastructure funding as a proportion of receipts Source: Australian Infrastructure Budget Monitor, August 2017
Constructing the facts
Since 2010, IPA and BIS Oxford Economics have published a quarterly leading indicator of civil construction activity based on data surveys of circa 50 per cent of the civil construction sector.
This information too is now available in dynamic graph form on infrastructure.org.au showing both our index of contract awards and the relationship between ‘work won’ and ‘work done’.
In this way, our Australian Infrastructure Metric is now a live resource which provides detailed and current information about actual construction activity in Australia.
Figure 4 shows actual engineering construction ‘work done’ – including our forecasts to 2020 – done in partnership with BIS Oxford Economics.
It shows that behind the heightened infrastructure rhetoric, total engineering construction has been reducing by about $14 billion each year – led by the collapse in mining capex (yellow) – but with only a modest rally in economic infrastructure (light blue).
Figure 4: Measuring actual dollars hitting real projects shows that Australia has only just bottomed out on engineering construction – with our forecast showing a modest ‘transport-led’ recovery in volumes in FY2017/18 Source: infrastructure.org.au, accessed 27 September 2017
In addition to detailed information about infrastructure funding levels and construction activity, infrastructure.org.au also publishes our historic data sets showing PPPs since the year 2000; and privatisations (since 1987) – including volume, value and asset types – as well as by jurisdiction. These are shown in Figures 5 and 6, by year and by jurisdiction.
Figure 5: Public Private Partnerships by jurisdiction 2000/01 – 2017/18 Source: infrastructure.org.au, accessed 27 September 2017
Figure 5: Public Private Partnerships by year 2000/01 – 2017/18 Source: infrastructure.org.au, accessed 27 September 2017
Figure 6: Privatisations by year 1987/88 – 2017/18 Source: infrastructure.org.au, accessed 27 September 2017
Figure 6: Privatisations by jurisdiction 1987/88 – 2017/18
In the coming period we will also publish the construction profile of major projects across the Australian market.
And for the first time we will shortly release a live annual measure of road system performance, showing travel time decay as an index across the four major capitals and in minutes lost on key corridors, within each city.
What’s the big deal? See infrastructurepipeline.Org
Launched by New Zealand Prime Minister Bill English, and Australian Treasurer Scott Morrison, IPA’s infrastructurepipeline.org is endorsed by the Australian and New Zealand governments and is a solid example of our focus on making infrastructure realities explicit.
Figure 7 below shows our current analysis of the greenfield project pipeline, by status while Figure 8 shows these projects by jurisdiction.
Figure 7: Despite the slowdown in funding in most states and the Commonwealth, the major project market remains strong off the back of NSW, Victorian and New Zealand projects Source: infrastructurepipeline.org/projects-status-chart, access date: 25 September 2017
infrastructurepipeline.org does a very different job to the pipelines produced by Infrastructure Australia and its state counterparts.
Ours provides an analysis of the major projects and privatisations across the two countries, and segments the pipeline across six stages from the earliest ‘prospective pipeline’ through to financial close.
In this way, it is an analysis of what is happening – not what should happen.
Each project or privatisation is narrated, providing context and information, and links through to relevant resources and agencies.
This is updated daily, with the monthly Pipeline Report providing analysis of key project additions, status changes or new details distributed to thousands of subscribers in both domestic and overseas markets.
infrastructurepipeline.org also provides sophisticated graphing tools, which can be filtered to particular sectors, jurisdictions, procurement types and by status.
Figure 8: Australian & New Zealand Infrastructure Pipeline, greenfield projects by jurisdiction (credibly proposed – announced) Source: infrastructurepipeline.org/projects-jurisdiction-chart, accessed 25 September 2017
Information is power
Our focus on making the data we collect explicit and publicly available reflects IPA’s commitment to measuring infrastructure in a meaningful and insightful way.
It reflects our desire to use good information and robust data to ground the political debate and help the community to better separate infrastructure fact from fiction.
And to keep political narrative and reality better connected.
We have done this because infrastructure can only get better if we are honest about what is going well – and particularly, what is not.
