Victoria’s Labour Government Moves to Scrap Infrastructure Victoria
Synopsis
Victoria’s government moves to scrap its independent infrastructure advisory body, sparking concerns over transparency and facing pushback from opposition parties.
Key Highlights
- The Victorian Labor Government intends to disband Infrastructure Victoria and Economic Growth Victoria.
- The move is expected to eliminate up to 50 positions and generate as much as $12 million in savings.
- Coalition and the Greens are firmly against such legislation.
- The move, critics say, could undermine transparency in decisions about infrastructure.
Independent body is on track for closure by Government
Victoria’s Finance Minister Enver Erdogan confirmed on Friday that the state government would abolish Infrastructure Victoria, alongside Economic Growth Victoria, as independent bodies. They will be reabsorbed into the Department of Treasury and Finance where they came from. Staff at both organisations learned of the decision Friday morning. It could mean up to 50 jobs cut, and a total saving of about $12 million for the government.
Background on Infrastructure Victoria
This comes despite the fact thatInfrastructure Victoriawas established in 2015 by the incumbent Labor Government, with Coalition support. It has operated to provide arm’s-length structural advice to the Victorian Government. The authority released a 30-year infrastructure strategy for the state in December 2016 and updated it in 2021 and last November. It also offered suggestions on how to deliver infrastructure more cheaply.
Last year, the future of the agency was put into doubt by a report by Helen Silver AO who recommended Infrastructure Victoria, Economic Growth Victoria and Better Regulation Victoria all be absorbed back into the Department. It was part of a wider plan to scrap up to 78 public sector bodies to cut duplication and costs.
The announcement forms part of $70 million in planned savings the government plans to make, partly by cutting the amount it spends externally on consultants. Erdogan stated the Silver Review had suggested government departments convey strategic policy advice instead of separate agencies, and that the recommendations would not threaten any “infrastructure or economic growth” but would aim to cut unnecessary duplication and improve performance.
Backdrop of Infrastructure Controversy
This announcement follows continued controversy over Victoria’s Big Build infrastructure program. The Suburban Rail Loop East project could have massive cost blowouts, the Victorian Auditor General’s Office warned last week. The government’s 2021 business case predicted the project would cost between $30 billion and $34.5 billion, but the Auditor General said it was likely to be at least $ 36.1 billion.
The report also uncovered about $3 billion in extra costs not included or only partly captured in the project’s budget, including links to stations, land acquisitions and a multi-level car park at Glen Waverley station, whose delivery plans were ditched last week. The Auditor-General also discovered that a secret tax had been imposed by the government on public transport fares to help pay for it.
There has also been criticism of bribery between the government, trade unions and major public works contracts. Corruption investigator Geoffrey Watson put that number at $15 billion in a heavily redacted report given to the CFMEU Commission of Inquiry in Queensland, which he said was lost to Victorian businesses because of illegal activity on Victoria’s Big Build sites.
Concerns Over Transparency
Some industry and union groups have complained that abolishing Infrastructure Victoria could dilute government decision-making transparency. Channel 9 reported that Infrastructure Partnerships Australia chief executive Adrian Dwyer labelled the move as cents smart but dollar dumb.
The Community and Public Sector Union’s Victorian branch said the decision may “ erode public trust in government even further”, claiming Victorians already feel governments are not held to account, which can’t be remedied by removing independent scrutiny.
Legislation Still Required
However, the promise to abolish Infrastructure Victoria has not been formally committed to, as with a number of major policies announced today including tax cuts for small business, the body can be shut only through legislation. The opposition Liberal/National Coalition has pledged to maintain the agency if it were to have power after the next election, while the Greens have also opposed the move. That means the government will require at least six of the eight minor party and independent crossbenchers.
Erdogan said it will take a few months to abolish the organisation. Opposition Leader Matthew Guy slammed the move, walking through Infrastructure Victoria’s original bona fides as an independent provider of unbiased advice about infrastructure projects free from politics and asked what its abolishment said about the government.
Source: Sourceable Net
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