Whitsunday Coast Chamber of Commerce

All regions of Queensland want to see more major infrastructure projects to kickstart their economies.

We’re talking about major, significant infrastructure projects with at least a nine-figure price tag that are essential to accommodate the growth of our cities and towns for the next few decades , projects which NSW and Victoria seem to have plenty of. As our southern State counterparts further ramp up investment in infrastructure over the remainder of this decade, construction will continue to lag in Queensland compounded by our ageing workforce.

The Queensland Major Projects Pipeline 2018 report shows that while there are 190 projects valued at $39.9 billion in the pipeline, 98 of them (51%) are still awaiting funding and 17 per cent of the overall pipeline is unlikely to proceed.

Unfortunately, infrastructure announcements have become a key metric for political popularity, and real effective growth planning takes a back seat to governments’ obsession with opinion polls. Too often, projects are committed to before a business case has been prepared, and even before comprehensive analysis of any alternatives has been undertaken.

As a result, funding presents itself the largest hurdle in getting projects up and running due to the business cases not stacking up. At the same time, funding can be given almost on a political whim, despite there being independent bodies at both the federal and state level signalling priority on other more important infrastructure projects.

The State Infrastructure Plan and Building Queensland’s Infrastructure Pipeline Report comprise an extensive list of major infrastructure proposals, yet the business cases - undertaken by the State Government - struggle to convince the Federal Government to hand over funding required to start the projects.

Few things are to blame.

Firstly, in an era of gold-plating our infrastructure, major projects become too expensive and the ROI is considered too low. The lack of long-term thinking when it comes to town planning means corridors are no longer reserved, instead we go underground for our transport infrastructure which is not only outrageously more expensive, but also more hazardous to construct and use, much longer to build, and much more difficult to operate and maintain.

Secondly, as the business case framework is being driven by the States – and not templated by the Federal Government – the assessment process drags on as the back and forth for more information plays out.

Thirdly, as the business cases are never released for public scrutiny, politicians are able to play political football and rely on public and media pressure to try and get projects over the line, or otherwise quashed.

The framework for business cases for major infrastructure projects must change. Early this year in July, Infrastructure Australia released a set of guidelines for future infrastructure projects designed to lift government works to the same level of accountability, planning and cost rigour as the private sector.

Outlined in the guidelines are 11 infrastructure decision-making principles:

1. Governments should quantify infrastructure problems and opportunities as part of long-term planning processes.
2. Proponents should identify potential infrastructure needs in response to quantified infrastructure problems.
3. Proponents should invest in development studies to scope potential responses.
4. Where an infrastructure need is identified, governments should take steps to ensure potential responses can be delivered efficiently and affordably.
5. Governments should undertake detailed analysis of a potential project through a full business case and should not announce a preferred option or cost profile before undertaking detailed analysis involving multiple options.
6. Proponents should assess the viability of alternative funding sources for each potential project.
7. Project proposals should be independently assessed by an appropriate third party organisation.
8. Governments and proponents should undertake meaningful stakeholder engagement at each stage, from problem identification and option development to project delivery.
9. Governments and proponents should publicly release all information supporting their infrastructure decisions.
10. Governments should commit to, develop and release post-completion reviews.
11. Where projects are funded as part of a broader program, the corresponding decision-making processes should be robust, transparent and prioritise value for money.

Successful initiatives such as City Deals is a model which needs to be rolled out across the State and the country a lot quicker than it currently is. The announcement of a South East Queensland City Deal, following the success of the Townsville City Deal, is a genuine bi-partisan approach and a step in the absolute right direction when it comes to long-term planning.

Infrastructure needs to separate itself further from politics. The undertaking and success of major projects has been proven to be directly tied to the economy, and our economy is more important to the small business community that political point-scoring.

Small businesses in regional Queensland are 100 per cent behind calls from the Palaszczuk Government for mining companies to pay small businesses for their services within 30 days.

Payment periods are currently at a staggering 90+ days, a relic from policy introduced at the height of the mining downturn, which the Chamber of Commerce and Industry Queensland (CCIQ) brands as far too long in this current climate and the straw that could break the camel’s back.

CCIQ’s latest Pulse Survey showed regional businesses are experiencing weaker levels of profitability, meaning cashflow is now more important than ever for survivability.

A sentiment backed by CCIQ, Small Business Minister Shannon Fentiman believes the improvements in demand and prices across the resources sector should be the catalyst for fairer payment terms, which should be voluntarily adopted by the sector.

In a submission lodged last year, CCIQ recognised that small business suppliers have long been placed at the bottom of the food chain for corporates and larger companies.

Long payment periods, as well as late payments, have become “normal” for small businesses, despite them often providing vital products or services to these larger companies.

Furthermore, a survey conducted by CCIQ found that alarmingly over half of the surveyed businesses (56 per cent) had invoices paid more than two weeks late, and that one in five businesses (21 per cent) spend more than six hours a week chasing up late payments.

Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell late last year launched the National Payment Transparency Register following the Payment Times and Practices Inquiry which looked at the growing trend in payment practices, particularly amongst large Australian and multinational businesses, to extend payment times.

CCIQ supports the roll-out of the Register and urge larger businesses to sign on to the initiative.

The Register promotes businesses who are committed to good payment time practices, and also allows for small businesses to contact the ASBFEO office should the terms on the register not be met.