6 February 2007

Mr Clinton Porteous,
Courier Mail

Federal Pork for Queensland?

You recently suggested that the federal government should promise significant new funding to fix Queensland's infrastructure 'mess', on the grounds that this would (in effect) to 'buy votes' in the coming federal election.

In response I would like to submit that any federal support for Queensland should be conditional upon a public examination of how that 'mess' has arisen because (for example):

• simply increasing infrastructure spending in the face of over-extended construction industries would seem irresponsible; and
• Queensland's machinery for planning and development of infrastructure (and for public administration generally) requires extensive overhaul.

These points and others are considered in more detail below.

Regards

John Craig

Detailed Comments

In two articles, you recently suggested that significant funding commitments to fix Queensland's infrastructure 'mess' should be made to improve the Government's prospects in the coming federal election.

My interpretation of your recent articles: Queensland powerbrokers are seeking federal government infrastructure funding in the context of the coming federal election. Spending on roads / rail / water would unlock the state's potential and give a large economic boost. The premier argues that Queensland needs more because of its rapid population growth. Liberal MP (Cameron Thompson) argues that Queensland needs $4bn for roads - though criticizing the state for slow spending when money is allocated. The federal Opposition leader has promised funding for various projects, and also emphasized the importance of fighting climate change for the sake of Queensland's coastline and the Barrier Reef. The PM stated that the federal government had sensible climate change policies and would protect Queensland's coal industry. (Porteous C., 'State desperate for infrastructure funding from Canberra', Courier Mail, 5/2/07).

Queensland has been the electoral backbone of Howard Government, and now deserves payback. Queensland has problems with its road network and water supplies - despite which it is the fastest growing state, and its economy is increasingly nationally important. Poor planning by successive state governments is part of the problem, but the mess in Queensland is now a national priority. ALP leader has promised funding and to try to protect the Barrier Reef from climate change. State Liberal and National MLAs and federal ministers (Ian Macfarlane, Warren Truss and Mal Brough) need to make certain that the PM responds (Porteous C., 'Payback time after years of support', Courier Mail, 5/2/07).

While 'pork barrelling' is a widely practiced political technique, I should firstly like to submit for your consideration that there is a limit to which funds can be constructively expended on infrastructure. As you will be aware there has already been a huge increase in Queensland's infrastructure spending over the past decade and (when combined with the effect of a resource investment and building boom) this has resulted in large cost blow-outs and these are both wasting public money and also seriously eroding the margins available from resource investment (Molina L., 'Cost blowouts hit resources giants', Courier Mail, 19/9/06). Adding further pressure to overstretched construction industries would probably not be a responsible step.

Furthermore I submit that institutional obstacles need to be overcome before infrastructure problems can genuinely be reduced. Your articles highlighted poor state planning as part of the cause of Queensland's infrastructure 'mess', but did not suggest why this occurred.

In fact the capacity to competently plan and deliver infrastructure seems virtually nonexistent, for reasons that are suggested in Defects in Infrastructure Planning and Delivery in Queensland (May 2002). The latter document highlighted:

• the effect that federal fiscal imbalances have had (especially since the 1970s) on reducing states' ability to take responsibility for, or be held accountable for, their nominal functions;
• the politicization / de-skilling of the Queensland public sector (especially from the early 1990s); and
• the subsequent fragmentation of machinery that had traditionally been used for infrastructure planning and development without putting anything else in its place that could be effective.

Unless the defects that have rendered Queensland's Government dysfunctional and crisis prone in so many areas are overcome, increased state or federal taxpayers' money may not necessarily be reliably spent. Suggestions about the type of changes needed to restore a reasonably effective system of government were outlined in Improving Public Sector Performance in Queensland (November 2005).

Finally, I submit that the national implications of Queensland's economy are more complex than suggested in your articles, because:

• low taxes (especially the elimination of death duties) seemed to be a significant factor in initiating Queensland's rapid population growth which became self-reinforcing when the jobs created in providing homes, services and infrastructure for immigrants attracted further interstate migration. However ultimately low taxes and large commitments for infrastructure funding to support rapid population growth were always going to prove incompatible (eg see Queensland's Budgets) - as naive pro-development local authorities have frequently discovered to their cost;
• Queensland economic strategies have traditionally been unsophisticated, and thus resulted in the rapid growth of low productivity industries (see Queensland's Economic Strategy, October 2002). As a result Queensland provides a very weak base for federal government taxes, and Queensland has long relied on large interstate transfers under the Grants Commission's horizontal equalization principles; transfers that other states are increasingly unwilling to support (see Review of Grants Commission Arrangements, December 2001);
• attempts to diversify Queensland's economy, and thus overcome its productivity deficiencies (ie the present state government's Smart State program) have been amateurish (see Commentary on 'Smart State'), because of the same breakdown of public institutions that led to the infrastructure 'mess'.

In conclusion, it seems to me that any federal government support for Queensland should be conditional upon a competent public examination of the sources of its many difficulties (eg by a politically-independent Commission of Inquiry), so that the state electorate has a sound basis for demanding better practices of their representatives in future.