4 November 2005

Associate Professor John Minnery,
Director of Planning Program,
University of Queensland.

'A Little Caution for Big Smoke'

I should like to congratulate you on a recent article which highlighted the need to look beyond 'mega-projects' in managing SE Queensland's growth, and also to put forward some suggestions about the background to this situation for your consideration.

My interpretation of your article: 1000 people a week move to SE Queensland - so there is seen to be a need for huge spending on infrastructure projects. But other places have even larger challenges and survive. There is a need to recognise that megaprojects usually cost far more than expected and produce less benefits. Such initiatives may reflect political grandstanding or a search for company profits. SEQ's problems are not all that serious by comparison with other places. There is a need for a lot of small and medium fixes, rather than a few big fixes (Minnery J., 'A little caution for big smoke', Courier Mail, 2/11/05).

I am certain that your diagnosis of both the motivation and likely outcomes of mega-projects is correct. However you might also like to consider some background to the fixation on mega-project 'solutions' to SE Queensland's growth challenges, namely:

• a 'major projects' fixation often drove Queensland's economic strategy (especially in the 1980s and to some extent in the 1990s). Such projects:
  • were almost always driven by (frequently external) investors interested in Queensland's natural assets;
  • gave political players the opportunity to announce 'things', while making the political establishment dependent on the investors;
  • gained political priority which disrupted the effectiveness of routine government machinery - and contributed in no small measure to the problems identified by the Fitzgerald inquiry in the late 1980s;
  • resulted in a relatively low productivity economy - because the 'major projects' often had less benefits to the community (eg given limited employment; low wages in tourism; and transfer payments) than might have been obtained by competent leadership in the development of local economic capabilities;
  • benefited state revenues because the state's tax base tended to reflect 'volume of business' (eg rail freights, payroll tax, stamp duties, royalties), but provided limited federal tax revenues as the latter tend to be 'value of business' taxes.
• the 'major projects' fixation in an economic sense both caused and resulted from the policy weaknesses and provincialism of Queensland's political establishment (see Queensland's Weak Parliament). The whole situation provides a perfect example of the 'resource curse' hypothesis - which suggests that resource-rich regions face serious developmental obstacles;
• the fixation now on major infrastructure projects reflects highly centralised public sector management (which can only cope with a few projects) because the state's public administration machinery is seriously dysfunctional (see Middle Management from the Top, and Defects in Infrastructure Planning and Delivery in Queensland). The small and medium initiatives which you suggested would require a competent system of public administration in which large numbers of capable organizational units worked together in an integrated way. In Queensland this simply does not exist (eg see Realistic Public Administration is the Key).

I would be interested in your reactions to my speculations.

Regards

John Craig