PDF: 1917 KB - Infrastructure Australia

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PDF: 1917 KB - Infrastructure Australia

2.4 Better use of existing infrastructureNation-wide challengesthe infrastructure, either directly orindirectly. Congestion relief, quickerturnaround times at ports and fastercommunications lower costs, decreaseprices, increase competitiveness andgrowth, and boost employment.• Avoidance or deferral of major new capitalexpenditure. When asked to nominatethe infrastructure investment neededfor Australia, governments and industryusually assemble a list of projects worthhundreds of billions of dollars. However,even without the impact of the currenteconomic slowdown, such an agenda isbeyond the current financial resourcesof governments and industry. Findingways to achieve required efficiencies andincreases in productive capacity withoutdiverting scarce capital should be of thehighest priority – a higher priority thanbuilding new assets.• Environmental and amenity benefits.Often, new infrastructure comes at someenvironmental cost. Natural resourcesare used for construction and the naturallandscape is reduced; often the visuallandscape is damaged and there may beadditional noise and air pollution. Makingthe most from existing infrastructure canavoid many of these negative environmentaland amenity costs. It can also reducethe carbon intensity 38 of the economy byavoiding the carbon emissions generatedby the construction process and throughthe more efficient use of infrastructure.The following sections are key to improvingthe use of existing infrastructure:a) Open access to infrastructure;b) Efficient Pricing;c) Technology; andd) Reform of transport operating rules.a) Open access to infrastructureNational Competition Policy (NCP) formedthe basis of much micro-economic reformin Australia in the 1990s. At the heart of theNCP was the principle that where facilitiesof national significance existed, accessto that infrastructure should be open tocompeting operators.The relatively small size of the nationaleconomy has meant that Australia hashad to struggle with this notion more thanmost nations. Diseconomies of scale haveacted as barriers to investment that wouldduplicate essential facilities such as muchof Australia’s telecommunications network,energy transmission systems, somerailway lines and ports.Most Australians accept that duplicatingthese assets is a waste of scarce resources.However, key elements of Australia’stelecommunications, energy, rail and portinfrastructure remain either closed tocompeting operators or effectively closeddue to unviable conditions of access.These obstacles to competition can leadto essential infrastructure being underused.In most cases, the argument against moreopen access has been about pricing andincentives for private investment. Thereis often disagreement about the pricenew operators should pay to use suchinfrastructure. It is also argued that it isunfair for companies that have built orpurchased the essential infrastructureto effectively subsidise competitorsthrough low access prices.Access prices should be fair and providea reasonable return to incumbent ownersand operators. At the same time, accessrules should not discourage privateinvestment and competition.Infrastructure Australia – Advising Government on Australia’s Infrastructure | 29

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