17 March 2006

Mr Anthony Marx
Courier Mail

The Perils of 'Capital Works Catch-up'

I should like to submit for your consideration that Queensland's capital works catch-up is likely to be more perilous than your article suggested.

My interpretation of your article: There is an infrastructure boom in Queensland driven by rapid population growth. Rail, busway and water projects are included. Greatest impact will be in SEQ. However Opposition points out that none of water projects announced have been committed - they are merely being investigated. Also many of the projects were said to be forced by power system failure, failure in Queensland Health and failure to provide water infrastructure. Other problems in infrastructure package are occurring - namely blow-out in costs of labour and materials. There are also proposals for a shift to PPPs - a shift that some see as due to greater cost of projects. However IAQ is happy about the shift. Sources suggest that government is wary of PPPs and some academics (eg Scott Prasser) are concerned that PPPs are stacked to benefit private sector. Prasser said Australia was only now coming to grips with decades of under-funding of infrastructure - a problem that is worse in Queensland (Marx A 'Capital works catch-up', Courier Mail, 11-12/3/06).

The problem is that the the public sector that is expected to manage this investment boom seems to be verging on meltdown, noting for example:

Outline of another recent article: Beattie government's drive to better manage SE Queensland's growth has hit a hurdle - lack of leadership in one of the departments responsible (according to an internal survey of staff opinion - which showed limited perception of Natural Resources, Mines and Water Department's future). Queensland Public Sector Union said situation was typical of public service struggling to contain exodus of professionals fed up with poor working environment and pay. Public service has serious skills shortages, problems in recruitment and retention and unhappy employees. (Gregory J., 'Planning gurus out of touch', Courier Mail, 9/3/06).

That this is not an isolated view is illustrated by indicators cited in Improving Public Sector Performance in Queensland

The consequences of a weak institutional basis for an ambitious and costly capital works program seem likely to be exciting to say the least.

One only needs to consider what happened in Victoria in the 1980s (ie massive public sector losses) when the state government adopted an extremely ambitious economic program after demolishing the skill base of its public service (see Review of The Fall of the House of Cain). A virtually identical process of de-skilling the public sector was implemented in Queensland in the early 1990s - leading to weaknesses that have never been rectified. To date, as indicated in the reference cited above, this has resulted in only isolated dysfunctions and crises - because governments have not until now expected their debilitated machinery to do anything ambitious.

Regards

John Craig