Auslink strategic regional program

A third category is where there is a funding agreement. In this case, payments must accord with the terms of the agreement. Item 33 adds a new subsection 18 2 and relates to category three, that is, where there is a funding agreement.

Subsection 18 2 proposes a condition may be included in a funding agreement by providing that a funding agreement may specify a condition by including any matter in an instrument or other writing, which is in force or existing from time to time.

The Explanatory Memorandum contains an example of such an instrument, namely, the standard for best practice cost estimation for publicly funded road and rail construction projects. Item 38 amends section 24 which deals with public tenders for projects and when they must be called. In general, tenders must be called. However, Section 24 allows the Minister to forego this requirement in certain circumstances. Item 38 provides for another circumstance, namely, where the cost of the work is less than an amount prescribed by regulation.

Sections 17 and 27 of the Act deal with the determination of conditions when there is no funding agreement. Broadly, section 17 allows the Minister to approve funding while section 27 determines other conditions if there is no funding agreement, allowing the Minister to set other, different and changed conditions.

The instrument containing conditions is a legislative instrument. The Explanatory Memorandum notes:. Section 14 of the Legislative Instruments Act permits a legislative instrument to incorporate the terms of instruments or documents in existence at the time the legislative instrument was made, but, unless the contrary intention appears, a legislative instrument cannot incorporate the terms of instruments or documents as in force or existing from time to time.

Item 40 amends section 27 to allow the incorporation into the conditions any matter in an instrument or other writing, which is in force or existing from time to time. Subsection 14 2 of the Legislative Instruments Act prohibits the incorporation of other written instruments unless the enabling legislation allows the incorporation of this material. Item 40 states the intention that such references can be made from other written instruments.

Such written instruments may only be applied, adopted or incorporated in the form in which the instrument exists at the date when the legislative instrument takes effect. Item 64 changes both the title of section 52 and section 52 itself, accordingly. Section 55 of the Act deals with when it is appropriate to approve a Strategic Regional project.

In essence, section 55 contains criteria the Minister may consider when deciding whether to fund a project. In particular, the Minister may consider the regional consequences of projects. Items 67, 68 and 69 change section 55 and are among the more important provisions in the Bill. Item 67 removes the word regional from paragraph 55 a so that it reads industries and not regional industries.

Item 69 similarly removes the word regional from paragraph 55 e so that it reads communities and not regional communities. Item 68 deletes paragraph 55 b which allows the Minister to consider the extent to which the project is likely to improve a road, railway or inter-modal transfer facility that is regionally significant.

Items 85 and 86 need to be read together. Section 71 contains the criteria for determining whether a site is eligible for black spot funding. In particular, paragraph 71 d states that the site must not be on the National Land Transport Network. Items 85 and 86 remove this requirement. The effect is to allow funding of black spots on the Land Transport Network and not just Off-Network sites.

Item repeals subsection 87 1 of the Act, which requires the minister to determine an AusLink Roads to Recovery list for the funding period. The Explanatory Memorandum states that this subsection is redundant because the Minister has already determined the list to be used as the Nation Building Program Roads to Recovery List for the funding period, For example, when councils have amalgamated, the Minister can give the funds previously designated for those councils to the merged council.

Item adds subsection 88 2B which allows the Minister to increase the amount payable to a person or body named on Roads to Recovery List. Item contains two definitions. Item relates to items 34 to 38 which deal with public tenders. Item provides that items 34 to 38 apply only to projects approved on or after the commencement date of items 34 to 38 , that is, the day after this Bill receives the Royal Assent. Subitem 1 provides that an instrument determining a National Land Transport Network that was made under section 5 of the old law, is taken as if it applies to section 5 of the new law.

Subitem 2 provides that subitem 1 does not mean that the instrument cannot be changed. Item is a transitional provision dealing with National Projects. Further, instruments, funding agreements and funding conditions applying to an AusLink National Project are to be treated as if they were made for a Nation Building Program National Project. Items , and contain identical provisions to item except that they relate respectively to Transport Development and Innovation Projects, Strategic Regional Projects, and Black Spot Projects, and contain appropriate cross references to the sections of the old law.

Item contains transitional provisions related to the Roads to Recovery Program and distinguishes between two funding periods: 1 July to 30 June , and 1 July to 30 June Subitem 1 relates to the first funding period. Subitem 1 provides that the old law continues to apply with respect to payments made under the AusLink Roads to Recovery Program during the first funding period.

Subitem 2 relates to the second funding period and, in effect, transfers the amounts provided under the old law to the new law. Similarly, subitem 3 transfers payment conditions made under section 90 the old law to the new law and subitem 5 provides for notices made under the old law to continue to apply under the new law. However , s ubitem 4 provides that subitem 3 does not mean that payment conditions cannot subsequently be changed and subitem 6 similarly provides that subitem 5 does not prevent the variation or revocation of an exemption or condition after the commencement of subitem 6 with respect to notices.

Item Transitional regulations provides that the Governor-General may make regulations prescribing matters of a transitional nature including saving or application provisions relating to amendments made by the terms of the Bill.

As noted, items 67 , 68 and 68 remove the requirement for the Minister to consider the regional consequences of projects. The current provisions are, in essence, a form of protection for regional industries. The negative effects of protection on national income and welfare have been well documented.

Part 1 — Amendments. Note: This item amends the short title of the Act. Nation Building Program National Project has the meaning given by section 8. Nation Building Program Roads to Recovery funding period means the period starting on 1 July and ending on 30 June Nation Building Program Roads to Recovery List means the list in force, immediately before the commencement of this definition, under subsection 87 1 of this Act for the period starting on 1 July and ending on 30 June Part 5 — Nation Building Program funding for land transport research entities.

Part 2 — Application and transitional provisions. The amendments made by items 34 to 38 apply in relation to projects approved on or after the commencement of those items.

The Sustainable Transport Coalition was generally dismissive of the white paper, claiming that it ignored critical issues by spending more on roads when oil is in decline and environmental concerns demand a new approach.

Carl Scully, accused the Howard Government of seeking electoral advantage in the allocation of funding. For example, Mr Scully was critical of the lack of funding for the Princes Highway between Wollongong and the Victorian border:. Mr Ferguson advocated an independent advisory council to allocate federal transport funding.

The states have clearly been left out of the negotiations in developing the detail of the land transport network, with the AusLink white paper parachuted onto the desk of state ministers and told to take it or leave it. Senator Lyn Allison, for the Australian Democrats , gave the white paper a mixed reception. On the one hand, she welcomed the consolidated approach to transport planning and spending.

On the other hand, she criticised the more roads to solve more traffic approach. Senator Allison said that public transport improvements to reduce traffic congestion and a massive injection of funds into urban public transport in major cities are needed.

The Victorian branch of the Australian Greens commented:. The Federal Government's Auslink land transport scheme is creating a future of more and more roads, more single vehicle car trips, continuing poor public transport and no relief for a transport system embedded in increasingly expensive and scarce fossil fuels. Failure to pass the Bill would mean that existing arrangements for road and rail funding would continue.

Some but not all of what the Government proposes in the Bill can be attained under existing legislation. Auslink National Projects Part 3. Auslink Strategic Regional Projects Part 6. For example, clause 10 in Part 3 which deals with the eligibility of projects for approval has parallel clauses in Parts 4, 6 and 7, namely, clause 30 in Part 4, clause 54 in Part 6, and clause 71 in Part 7.

Part 5 also has some comparable wording to clauses in Parts 3, 4, 6 and 7 but the processes for approval of research are not as onerous as those for Parts 3, 4, 6 and 7. For example, there are no clauses in Part 5 dealing with situations where there is no funding agreement because all research projects are based on funding agreements.

For the purposes of this Bills Digest, Part 3 is taken as representative of the clauses in Parts 4, 6 and 7. However, the Digest identifies significant variations from this general pattern. Subclause 5 1 provides that the Minister must, in writing, determine a National Land Transport Network.

Subclause 5 2 defines necessary but not sufficient requirements for roads, railways and intermodal facilities to be eligible for inclusion in the Network. In addition to the above, to be included in the Network, the roads, railways and intermodal facilities must meet either or both of the criteria set out in subclause 5 3 :.

Comment : the criteria thus encompass the transport of both freight and passengers. The criteria are very broad and give the Minister considerable discretion as to what may be included. The white paper sets out what the Government intends to include in the Network. The components are set out in Appendix 1. Subclause 5 4 provides that an instrument that determines the Network is a legislative instrument for the purposes of the Legislative Instruments Act But neither section 42 which deals with the disallowance of legislative instruments nor Part 6 which deals with the sunsetting of legislative instruments of that Act applies to the instrument.

Similar but not identical subclauses appear throughout the Bill, for example, subclauses 6 3 , 27 4 , 44 4 and 68 4. By way of explanation of subclause 5 4 , the Explanatory Memorandum states:. Ministerial determination of the composition of the National Land Transport Network is an essential prerequisite for the administration of the AusLink programme. The composition of the Network to be covered by the initial determination has been the subject of inter-governmental consultation, and subsequent policy consideration and wide dissemination by the Government.

For these reasons, and to provide certainty and continuity, the Bill does not subject the determination of the Network to the disallowance provisions of the Legislative Instruments Act Application of the sunsetting provisions of the Legislative Instruments Act to the ministerial determination of the National Land Transport Network would run counter to the need for certainty in the development of long-term planning and investment strategies for the Network.

Clause 6 empowers the Minister to change the composition of the Network [ subclause 6 1 ]. But the revised Network must still comply with the requirements of clause 5 [ subclause 6 2 ].

Division 1 deals with the approval of projects. Division 2 with the provision of Commonwealth funding, and. Division 3 with the conditions that apply to Commonwealth funding. Division 3 has three subdivisions:. Clause 9 provides that the Minister can approve a project only if it is both eligible [ paragraph 9 1 a ] and appropriate [ paragraph 9 1 b ].

Subclause 9 2 states that an instrument approving a project is not a legislative instrument for the purposes of the Legislative Instruments Act Identical or similar subclauses appear elsewhere in the Bill, for example, subclause 15 4.

Comment : the purpose of subclause 9 2 seems to be to provide a measure of certainty that, once approved, the project can proceed as planned. But, as noted below, the Minister may vary or revoke a project, and the variation or revocation is also not a legislative instrument for the purposes of the Legislative Instruments Act This means that the Minister s determination is not required to be tabled in each House of Parliament, and is not subject to disallowance.

Clause 11 is a non-exhaustive list of the matters the Minister may consider when deciding whether a project is appropriate. The matters are:. Comment : these matters are very broad and give the Minister considerable discretion. The fourth matter is of particular interest. A criticism of the white paper was the absence of benefit-cost analysis of the Government s priority projects. This leaves open the possibility that the Government will fund a project even though its assessment may rank lowly.

In the white paper, the Government identified its priority projects. The projects are listed in Appendix 2. The sixth matter the Minister may consider when deciding whether to approve a project is the extent to which persons other than the Commonwealth propose to contribute funding to the project [ paragraph 11 f ].

In practice, this will refer mainly to the willingness of state governments to contribute funds to projects. The Minister made it clear in his second reading speech that the mere inclusion of a project in the Network does not mean that the Commonwealth will necessarily fund it, and that the Government expects some project costs to be shared:. The government has indicated its intention to invest in those projects that are of national priority and have substantial national benefits.

The government has a clear expectation that states and territories will invest in those projects on the national network which provide benefits at the state or territory level. This means that, in many cases, project costs will be shared with state and territory governments. This raises the question of whether the distinction between national benefits and those at the state or territory level is somewhat artificial.

Paragraph 11 f leaves open the possibility of private sector involvement in the funding of infrastructure. As it is, the private sector is already heavily involved in road provision. A study of this involvement found:. Private contractors already perform a fair amount of the design, construction and maintenance of Australia's publicly owned roads. The evidence reviewed in this paper indicates benefits from further contracting out of road work to the private sector.

In many cases, contracting out of road maintenance has reduced costs by 15 per cent or more. The evidence is less conclusive on the benefits of private investment in roads. Whether private toll roads are more efficient than other arrangements for road provision needs to be carefully examined case by case. Public ownership could be a better option than private ownership for some toll roads. An issue is how extensive private sector funding is likely to be. So far as roads are concerned, the traffic volumes on most sections of the National Network are too low to make them attractive to private sector funding without some form of guaranteed income such as shadow or other tolls.

Further, the states, not the Commonwealth, have been responsible for deciding whether to involve private funding. Clause 12 allows the Minister to ask persons or bodies, as the Minister considers appropriate, to submit projects for consideration and by any method the Minister considers appropriate.

Comment : this clause seems to be aimed primarily at state and territory governments, and local governments. Clause 13 sets out the matters that the Minister must include in an instrument approving a project. They include the maximum financial contribution the Commonwealth will make [ paragraph 13 1 b ], identification of the recipient [ paragraph 13 1 c ], and when approval is conditional on a funding agreement being reached, a statement to the effect that approval is conditional [ paragraph 13 1 d ].

But if the recipient is a state, a state or local government authority, or a body in which the Commonwealth, a state or a state authority have a controlling interest, the conditionality requirement is waived [ subclause 13 2 ]. Subclause 13 3 allows the Minister to limit the purposes for which funds may be spent. On the other hand, when approval is conditional on a funding agreement being reached, clause 14 adds that the project approval instrument must specify first, that the total amount of funding must not exceed the maximum funding specified in the approval instrument [ paragraph 14 a ] and second, that the agreement must comply with any other requirements specified in the approval instrument [ paragraph 14 b ].

Clause 15 deals with variations and revocations of project approval instruments. Subclause 15 1 allows the Minister to vary or revoke an approval instrument. But if a funding agreement exists, the variation or revocation must accord with the terms of that agreement [ subclause 15 3 ]. Subclause 15 4 states that an instrument that varies or revokes a project is not a legislative instrument for the purposes of the Legislative Instruments Act Clause 16 sets out two circumstances under which funding for projects can be provided.

The first [ paragraph 16 1 a ] relates to situations where there is no funding agreement with the approved recipient; these situations are covered by clause Subclause 17 1 empowers the Minister to approve the spending of funds, and vary or revoke the approval. Subclause 17 2 allows payments to be made in instalments, while s ubclause 17 3 restricts the total amount of funding provided to the maximum amount specified in the project approval instrument.

The second circumstance [ paragraph 16 1 b ] is where approval is granted conditional on a funding agreement being entered into, and where the agreement meets the conditions of clause Comment : as noted, the Government has a list of proposed projects and expects the states to contribute funds to some of the projects.

But funding arrangements are yet to be agreed for projects involving joint funding. Paragraph 16 1 b ] seems to allow the Minister to allocate funds to a project conditionally while a funding agreement is still being negotiated with the relevant state. Subdivision A deals with the sources of conditions. All payments are subject to the mandatory conditions in subdivision B [ clause 18 a ].

In addition to the mandatory conditions, other conditions must be met:. The latter includes situations where competitive tenders are unlikely to be received, or where exemption will contribute to employment in a region. Comment: there are no clauses in Parts 4, 6 and 7 that are parallel to clauses 23, 24 and The reasons for not having parallels to clauses 23 and 24 are not self-evident.

Not having a clause equivalent seems to limit the Minister s ability to obtain information about projects. The purpose of clause 24 seems to be to require the use of public tenders in major construction projects that the states or state authorities such as the Roads and Traffic Authority in NSW undertake. This is sensible given that competitive tenders are one way of ensuring best value for the spending of taxpayers money.

But it could be argued that the Bill potentially excludes situations where tenders may generate benefits. In particular, the exclusion of rail and road maintenance [ paragraph 24 1 a ] is debatable given that some state governments tender out some maintenance to private firms.

The provisions do not, however, prevent state governments from contracting out maintenance should they choose. It is not clear why competitive tenders should not apply to projects in regional areas. It could be argued that the same principle of seeking best value for money should apply to all spending, irrespective of location. An instrument that determines, varies or revokes conditions where there is no funding agreement, is to be tabled in Parliament, but is not subject to disallowance or sunsetting [ subclause 27 4 ].

Subdivision C deals with the determination of other conditions when there is no funding agreement. Clause 27 empowers the Minister to determine other conditions, determine different conditions according to different circumstances, and vary or revoke conditions. Clause 29 which is comparable to clause 9 provides that for a proposal to be approved as an AusLink Transport Development and Innovation Project, it must be both eligible and appropriate. Clause 30 defines eligibility, very broadly, as either or both of:.

Clause 31 defines circumstances when it is appropriate to approve a project. The matters to which the Minister may have regard include:. Comment : there are several organisations engaged in various aspects of land transport research in the public and private sectors. Part 5 empowers the Minister to fund land transport research entities. Of particular note is the definition of land transport operations in clause 45 which includes road, rail and inter-modal transfer facilities.

The main factor the Minister may consider when deciding whether to approve a research project is whether the research entity s activities are likely to improve land transport operations in Australia [ subclause 46 2 ]. Comment : a new feature of land transport funding is the AusLink regional strategic investment.

The purpose of this investment, as stated in the white paper, is as follows:. The AusLink regional strategic funding stream aims to enhance the ability of regional industry and communities to compete in the national and global marketplace. This is consistent with the Government's approach under AusLink to match investment to priority needs. The objective is to enable regional and outer metropolitan areas in particular to derive a greater benefit than under the existing Roads to Recovery programme from focussed investments in regional projects.

This funding will be available to any local council and its project partners on a competitive basis. The Government will not allocate set amounts of funds to States and Territories but the funds will be fairly distributed.

It will contribute to priority projects on transport links for which local government is responsible, but which councils would otherwise find difficult to fund - for example, in regions undergoing high growth; or conversely, facing a declining rate base.

The Government also recognises that due to their large size and remoteness some councils constitute a region in themselves. Such circumstances will be recognised by the Government during the consideration of submissions for these funds. Funding will be targeted to local transport links of regional significance that might:.

Projects will be assessed on merit and primarily against the AusLink objective of promoting sustainable national and regional economic growth and connectivity. However, the Government will give priority to proposals that demonstrate they:. Clause 54 contains the criteria for determining whether projects are eligible of approval.

They are:. Clause 55 sets out the circumstances when it is appropriate to approve a project. If the Minister is satisfied that a part of a road that is not a part of a national highway is a site the nature of which has contributed to serious motor vehicle crashes involving death or personal injury, the Minister may declare the location to be a black spot for the purposes of this Act.

Clause 71 redefines a black spot project slightly differently as one that improves road safety, one where the project site has contributed to, or is likely to contribute to, serious motor vehicle crashes involving death or personal injury, and the site is not included in the National Land Transport Network.

Clause 72 contains the factors the Minister may consider when deciding whether it is appropriate to approve a project for inclusion in the Black Spot program. They are the accident history, the results of any assessment of the safety costs and benefits of the project, the results of a safety audit conducted in relation to the site, and the extent to which a party other that the Commonwealth will contribute financially to the project.

Comment : the final requirement indicates the Commonwealth expects state or local governments to contribute to the cost of remediation of black spots. Clause 84 provides that funding recipients must maintain records relating to motor vehicle crashes at the site. The purpose of this clause seems to be to facilitate assessment of the worth of the Black Spot program.

The distribution of funds among jurisdictions will be based on the distribution proportions under the current program. Clause 87 requires the Minister to publish a list of the amounts the Commonwealth will pay under the AusLink Roads to Recovery program and of the recipients to whom the amounts will be paid. Comment : under section 5 of the current Roads to Recovery Act, the lists must be published in the Gazette.

Clause 87 does not indication where interested parties may find the published list. Clause 88 , amongst other things, allows the Minister to redirect funds to another recipient if a designated recipient ceases to exist. Comment : this clause seems to be intended to cover situations such as the amalgamation of local government areas in which case a designated recipient may cease to exist.

Clause 89 deals with payments to recipients specified in the list that clause 87 requires. Subclause 89 3 provides that payments under Part 8 can be made only after 30 June and before 1 July Comment : this gives effect to the Government s intention to extend the program for an additional four years, that is, after 30 June when the current program ceases.

Clause 90 specifies the conditions that apply to payments. Subclause 90 2 contains mandatory conditions. Comment : the third condition seems to be aimed at ensuring that local governments do not engage in cost shifting onto the Commonwealth, that is, reduce their own spending and allow the Commonwealth to fill the gap. AusLink is the most important change to Commonwealth funding of land transport for decades.

Whilst presented as a national land transport plan, AusLink might be more appropriately described as a federal land transport infrastructure financing plan. This recognises the need to incorporate both modes into land transport planning, and the relative past neglect of rail funding in favour of roads. Similarly, the inclusion in the plan of funding for intermodal projects recognises their importance for efficient freight transport.

On the other hand, AusLink has been criticised for, among other things, the lack of benefit-cost analysis of proposed projects and its neglect of urban areas. Further, how AusLink will develop is unclear. Perhaps the greatest uncertainty is the financial contribution that the states will make. The amounts allocated to projects are the Australian Government s funding commitments.

The amounts are conditional in that whether and when the projects proceed will depend on the willingness of the states to commit funds to the projects and this is a major unknown. AusLink should also seen in the broader context of moves to develop a more efficient national transport industry.