Preliminary Review of
Strategic Infrastructure for Queensland's Growth (SIQG): Strategic Directions
- September 2000 -

• Significant innovations through SIQC
• Overview of Comments
• What Might be Better

Attachment

• Viable Regional Population Growth in Queensland

Introduction

SIQG (see outline) has been released  by the Department of State Development (DSD).

This present paper [which has only been drafted to a very rough Working Paper standard] will suggest that SIQG will not be able to achieve its desirable goals of providing certainty about infrastructure, as a basis for others' planning.

In some respects SIQG can be likened to a university thesis. It contains a lot of ideas about the state of the world (many of which appear quite good), yet no one should seriously expect any practical results to come from the exercise.  The proof of its 'academic' status is that SIQG has not started by identifying the PRACTICAL reasons why infrastructure planning is now difficult - and thus why SIQG was necessary.

For example: the shift to competitive service provision to increase infrastructure productivity had unintended consequences in terms of infrastructure planning because: 

• infrastructure planning and provision is no longer a matter which can simply be decided and undertaken within a ministerial department or a statutory authority;
• both public and private service providers need to respond to demand (rather than policy decisions) to be commercially viable (and to minimize government's CSO costs);
• central planning can't pick commercial 'winners' except where government is purchaser; 
• government can't safely rely on consensus amongst self-interested service providers to identify its infrastructure purchasing priorities;  
• government must avoid giving self-interested service providers undue technical influence over its decisions (or risk political / public-administration pathologies like the US 'military industrial complex' or the Japanese 'construction state'); and
• Queensland's corporatisation model appears unlikely to allow its infrastructure enterprises to be financially viable.

A more detailed discussion of such considerations is available.  

In another respect SIQG publicly states the rationale for activist provision of infrastructure to try force the pace of economic change (including changing to a Smart State) which appears likely to get Queensland into the same sort of financial trouble as Victoria experienced in the 1980s under the Cain Government, because poorly executed 'activism' can not lead to economically or financially productive outcomes.

Significant Innovations through SIQG

SIQG has tried to suggest two significant innovations. Firstly it reflects an 'active' approach to the provision of infrastructure (p16), and attempts to deal in an integrated way with all types of infrastructure in all regions. Government's desire to provide leadership is a key underpinning of the methods used for preparing SIQG. Secondly it gives a new emphasis to 'soft' infrastructure, especially technology / innovation infrastructure - an emphasis which is compatible with government's 'Smart State' aspirations.

Also of significance is the (correct) view that infrastructure can (at times) have a catalytic role in regional development - when it generates benefits beyond those which may be predicted from currently identifiable demands (p17). Also consistent with this is (a) a stated desire to invest in recognition of all potential long term benefits, not with respect only to direct commercial returns and (b) recognition of the special difficulties of sparsely settled regions (p18) and thus support for special programs designed to reduce those difficulties.

Overview of Comments

Despite its ambitious goals, practical concerns about SIQG are that: :

• SIQG is still not based on a realistic assessment of the strategic situation;
• governments like those in Australia can not take the lead in high-productivity economic functions (especially in a 'knowledge' economy) - but SIQG assumes they can;
• administrative foul-ups and other problems are likely to result from SIQG's proposed process so that the probable outcome is that nothing much will happen at all;
• SIQG can not identify sound regional infrastructure options, or to make the important contributions to transforming the prospects of regions as it seems intended to do;
• the implications of 'soft' infrastructure (ie where correct organisational arrangements are more important than building 'things') has not been properly accommodated, eg
  • there are deficiencies in the expectation that innovation and technology infrastructure can be provided by government like conventional infrastructure;
  • competitive service provision (which has been widely introduced without considering the implications) requires that even publicly provided infrastructure services must be treated as enterprises responding to markets (especially where users pay) - rather than as 'things' that government can plan;
• Queensland appears to be experiencing financial difficulties which are probably partly due to assumptions about government's role in providing strategic infrastructure - yet the financial implications of SIQG were not mentioned;
• there is a critical requirement for raising the productivity of the Queensland economy - yet the proposed SIQG process would not ensure that this is achieved.

A more detailed account of the above concerns is available. .

What might be better?

For conventional 'hard' infrastructure, achieving the apparently desirable objectives identified for the State Infrastructure Plan probably requires management of Queensland's infrastructure system so that the enterprises involved can realistically plan - rather than a governmental process to pre-empt the results of such planning. 

This might include attention to:

• ensuring that private and public infrastructure service providers are supported by institutions which provide them with relevant apolitical intelligence about the demands and requirements for their services;
• enabling leadership in the development and implementation of proposals for new infrastructure services (eg by public or private service providers; or by government agencies under political direction where initiatives may be taken involving CSOs, or where government is the purchaser of the infrastructure service). This might involve:
  • reconciling the Integrated Planning Act with the need for such leadership;
  • providing for forums at which overall requirements for particular infrastructure systems may be discussed, and through which differences of opinion about systemic questions can be professionally assessed;
• developing a viable process whereby government can pursue strategic infrastructure initiatives in the public interest including attention to: defining what public benefit currently means; ensuring an effective process for managing CSOs; and considering the interface between infrastructure services and the state budget;
• indicative business planning for a commercial brokerage function to assemble and disseminate information concerning infrastructure plans for the benefit of: potential infrastructure and other business investors; and governments;
• removing current constraints on the commercial viability of publicly provided infrastructure services by making such entities either privately accountable on a competitive commercial basis, OR publicly accountable on a non-competitive political basis;

For  'smart' / 'soft' infrastructure, which Strategic Directions emphasizes, a quite different procedure and set of skills seems likely to be required.

The overall goal in either case would be to enable the organizations (public and private) which need to plan various elements of infrastructure to do so more effectively - without government having to direct the outcomes.

9 October, 2000