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Abbott gets pork on his fork

MacroBusiness, 10 February 2014

We know now what the Abbott Government does with “frank and fearless advice”: THE Abbott government has dumped its top infrastructure adviser in a brutal decision to clear the way for its new agenda on road and rail investment amid a political row over the scrutiny of billions of dollars in new spending.

Infrastructure Australia head Michael Deegan was told to go on paid leave ahead of the formal abolition of his position under changes to be fought over when federal parliament resumes on Tuesday.

The edict, confirmed in writing yesterday, followed Mr Deegan’s outspoken criticism of the Coalition plan to overhaul the way Infrastructure Australia advises ministers on major projects.

…Coalition sources said Mr Deegan had been too close to former infrastructure minister Anthony Albanese and had to go in the wake of his complaints about government policy last month.

And a quick reminder of why Mr Deegan was outspoken with the support of the BCA:

The Business Council of Australia has called on the Abbott government to scrap plans to potentially muzzle and water down the independence of Infrastructure Australia, the leading public advisor on nation-building projects.

The council, which is playing a major role in the government’s audit commission, insists planned changes to Infrastructure Australia must ensure it remains free of political interference.

The BCA push, in a submission released on Monday, supports the head of Infrastructure Australia, Michael Deegan, who blasted Deputy Prime Minister Warren Truss last month for proposed changes that would give him ministerial power to dictate entire classes of projects to be spared from the advisory body’s scrutiny.

This is not in anyone’s interests except the Government in the short term and not even in its longer term. Infrastructure in the next decade is one of the key mitigating factors in Australia’s post-boom economic adjustment to better competitiveness.

Thoroughly and independently analysed productivity based infrastructure will help close the the widening gap between our current living standards and productive capacity. Without it, other more painful factors will be forced to shift further instead, like real wages falling more than otherwise. Not to mention that infrastructure development will be vital to unclogging our cities as the great population ponzi marches on.

The Abbott Government’s roads agenda is not at the top of either Infrastructure Australia’s or the Productivity Commission’s productivity list and putting pork on the fork of a minority rural party driven by agrarian socialism is not in the national interest, period.

Ken Henry is out this morning bewailing similar:

AUSTRALIA does not have the infrastructure to seize the full potential of the Asian century, Ken Henry, a former Treasury secretary and current NAB and ASX director, has warned as he called for “more creative, innovative thinking” about the nation’s infrastructure needs.

…”We do not have the infrastructure requirements for an economy and a society that is well connected with Asia,” said Dr Henry, who also spearheaded the Gillard government’s Asian century white paper.

“There is enormous potential in the Asian century and we simply don’t have the infrastructure assets, the infrastructure services, to ensure that in the commercial space — but also the social space — we make the most of those connections,” he said.

…The SMART research group has produced a green paper, which criticises “wasteful” spending on projects as a recurring problem. Research from consultant McKinsey, for instance, says Australia is spending more than is required as a percentage of GDP but the spending is inefficient.