I had a white night last night, so ended up listening to a lot of radio. Somewhere around or maybe later than potential getting up time, I heard something that quite impressed me – on the subject of infrastructure.
The topic formed the body of an interview by ABC Melbourne’s Jon Faine of Jim Miller, the recently-appointed head of the brand-new statutory body Infrastructure Victoria. It took me some time to find the podcast, then over an hour to do a partial transcription. My incomplete transcription is below. The part I found most interesting is towards the end, bolded, which gives a definition of infrastructure vastly different from that of our former and totally unlamented alleged prime mannikin. As some of you will know, the question of infrastructure is dear to my heart, and I would welcome discussion about how to move infrastructure beyond short-term, expedient politicking and into the place it should have – at the very heart of our Commonwealth.
FAINE: For the very first time this morning you have a chance to hear from the person who’s been appointed to head up Infrastructure Victoria. Jim Miller used to be an actuary, then a merchant banker [Macquarie Bank]; now he’s been appointed to sort out Victoria’s 30-year infrastructure strategy. It’s a most ambitious plan, and not at all to do with the ABC’s satire Utopia. Jim, good morning to you.
MILLER: Good morning, Jon.
FAINE: It’s even a Jim and a Jim, isn’t it? – from Utopia to the reality, isn’t it?
MILLER: Yes, that’s right.
FAINE: We can tease you with that, if you like.
MILLER: Yeah, plenty have . . .
FAINE: But . . .
MILLER: Look, it’s a great show, but it gets people talking about infrastructure Jon, which is great, so obviously we need to move the needle a little bit more, so that’s our challenge.
FAINE: Well, let’s get down to it. First of all, what are Victoria’s infrastructure needs, or is it that you don’t yet know and you need to try and work them out?
MILLER: That’s a really important part of what we’re doing. We’re basically – the way Infrastructure Victoria is set up is that it’s independent of government and so we get to stand back and basically set up an organisation that can actually fully consider all of these issues right from the ground up. And that’s part of the introductory paper that we’re publishing today – the website’s going live today and it’s really setting the framework to say these are the challenges we’ve got. We don’t have all the answers. It’s actually very difficult to be all things to all people and in fact impossible to be all things to all people. But let’s have the discussion about what we should be doing and how we prioritise it, and take it from there.
FAINE: Okay, and I understand there are other things being announced later this week which are along similar paths. First of all, why is it that there has been such a mismatch between what the community requires and needs on the one hand and the planning to provide it on the other?
MILLER: It’s a good question, Jon, and I guess infrastructure takes a long time to develop. We’d have an analogy from when something is talked about to when shovels get in the ground. It can take ten years plus, and in some cases thirty, forty, fifty years. All of these things take a long time. It’s very difficult to have that conversation within an electoral cycle, obviously, because politicians have a job interview every four years, as it were. So what Infrastructure Victoria is set up to do is to have that conversation looking out on a thirty year time frame, recognising there are long lead times, lots of conflicting objectives, and we want to have the discussion with the community to say, “How can we bring this about?”
FAINE: So you want to disconnect infrastructure from the electoral cycle? And yet one of the major reasons why politicians get elected is because of voter dissatisfaction with those sorts of services being delayed.
MILLER: That captures the challenge that we have generally as a community. Community awareness of the need for infrastructure is incredibly high – I was in the Telstra shop the other day and overhearing people speaking and they’re saying, ”Infrastructure, we should do it, let’s get on with it.” And that’s a broad narrative that’s come through in the time I’ve been involved with infrastructure – it’s really come through very strongly in the last five years or so. But the challenges are how do we pay for it? and where do we build it? Because obviously a lot of people respond very strongly when the infrastructure that’s arguably needed is built next to them.
FAINE: And if we took ten calls there’d be ten different number one priorities.
FAINE: And paying for it, of course you can’t do everything, so you have to make some decisions. So how do you prioritise, and how do you pay?
MILLER: We are starting a process which is going to engage as broadly as we can on exactly those issues. We’re setting out an introductory paper which says, This is what Infrastructure Victoria is about; in the first quarter of next year we’re basically going to that next stage which is setting up the foundations paper, What are the needs that we are trying to address so that everything’s on the table? Then we have a next step which is saying options. So, in the second quarter, what are the options for dealing with those needs? And then we get to the draft strategy, and then the final strategy by the end of the year, which is actually making all those trade-offs. Of course there’re going to be trade-offs, so we want to engage with the community starting right now as to how that should come about.
FAINE: Okay, in a democracy a very fair, democratic process whereby the community asserts its views on infrastructure through the ballot box. What’s wrong letting it happen that way? Why should a bunch of unelected, unaccountable bureaucrats if I can put you in that category take over from the democratic process?
MILLER: We’re not taking over from the democratic process, Jon. What we’re doing is providing a thirty year strategy which we are giving to government and then government will implement that strategy. So it’s up to government – always up to government – what they will deliver. What we’re trying to do – what Infrastructure Victoria has been set up to do – is to allow it the flexibility to be as broad as it can, to have that long term view, to have a really open discussion about those trade-offs, and really understand what the best solution is in that context.
FAINE: And paying for it? Do you also have a blank sheet to look at innovative ways of funding infrastructure?
MILLER: From our perspective, everything’s on the table. Just so we can be clear about what Infrastructure Victoria is not going to do: we’re not a procuring authority or a delivery authority, so we’re very much at that front end about the strategy and looking at – there are three jobs we have: the thirty year strategy; independent advice when requested by government; and research. And one of those research functions is helping that debate about how you fund infrastructure, how you measure the benefits of infrastructure, how you look at all of those things. Because, as you said, ten different people will have ten different view or possibly more on how things should come together. So we’re trying to put a framework around that so that when we have a discussion – importantly, when politicians have to make a decision, hopefully they have a consolidated group of information in addition to the work they’ve already done and will continue to do – and that other parts of Victoria will continue to do – to make the best decisions possible.
FAINE: Do you rule anything out for funding?
FAINE: So if we wanted to have a lottery?
MILLER: From our perspective, everything’s on the table. To make things clear, we’re not going to be making the funding decisions, because we’re not that procurement authority, but in terms of looking at it and having that discussion it’s an important part of what we do.
FAINE: Given your merchant banking banking background, interest rates around the world are at historical lows – a great time for governments to borrow money.
MILLER: Governments have a number of things they have to look at as part of that scenario. Probably the key thing is governments can borrow money and they can borrow at any time of the cycle as they go through, but what should they be spending the money on? That’s really the kinds of things we’re looking at, because particularly over a thirty year plan and with the lead times that are involved we need to give people as much information as possible so that ultimately the best decisions can be made.
FAINE: When you say give people the best information available, that’s politicians . . .
MILLER: No no, it’s actually starting with the community.
FAINE: But then they’re also being advised by Treasury who call the shots – you’re not likely to set up a competing or conflicting source of advice compared to Treasury, are you?
MILLER: We’re an independent body, Jon. We publish our report at the same time as we give it to government. So we are going to be putting our report out there and we are going to be consulting very widely and we want the community to engage with us as often as they want. We’re opening the doors; everything’s on the table and we want to have the discussion. And we have the flexibility to have the discussion.
FAINE: One of the things we learned from, for instance, the East-West tunnel, which I think everyone would agree was a dreadful process from beginning to end – the idea that you sign off on contracts just before an election campaign was ridiculous; that you lock the community in with a letter of comfort – there was a community backlash about that. But I always thought that one of the most revealing episodes was doing the panel hearing on the East-West Tunnel when we learned that the cost-benefit analysis was completely elastic. That the traffic modelling was as much a work of science fiction as anything else. You could make up figures of the number of trucks, the number of cars. You could put a notional fee in, you could boost the fee, and massively inflate the revenue you could get in order to make it look as if it were worth doing, when in fact it was all completely rubbery. That was a political exercise. How do you get away from the politicisation of the cost-benefit analysis?
MILLER: To set up a framework that gives people confidence that there is always going to be a range of assumptions. Everyone’s always going to have a view about the veracity of those assumptions; some of those will be really strong, some of those will be subject to a wide range of outcomes.
FAINE: But if you do due diligence, and that’s what the planning process ended up doing, the figures collapse – they were illusory. What rigour does your body apply to make sure we don’t make those mistakes again?
MILLER: For the benefit-cost ratio analysis, one of the research functions we will be undertaking is to try to get a consistent framework. We’re not going to be providing individual traffic modelling outputs for a particular project. That’s not what we do. But in terms of how a benefit-cost ratio is constructed – the inputs into that, the broader inputs into that – we’re trying to look at world’s best practice and a consistent framework, talk to the other bodies within Victorian government as to how they do it to get consistency, talk to other bodies in Australia to ensure we get consistency in approach.
FAINE: Because we don’t. Clem Jones Tunnel in Brisbane – went broke. Sydney Inner West Distributor – went broke. So, some of the so-called smartest people in the room, applying the exact same rigour you’re taking about, got it dramatically and expensively wrong.
MILLER: What you’re talking about are the traffic forecasts and you’re right – there has been a range of outcomes in Victoria and in other states and overseas as well. So what we’re doing is trying to set up a consistent framework.
[At this point I was getting really bored, so decided to stop transcribing. Then . . .]
FAINE: I note that in the draft of the report that we’ve been given before interviewing you today, Jim, that there’s different sorts of infrastructure – you’re not just looking at roads and trains. What else are you including in your definition of infrastructure?
MILLER: As we’ve set out in the introductory paper, there’s basically nine broad groups. We have three groups in economic infrastructure – transport, water, energy. Then we have the more traditional social infrastructure – health, education, and police and the like. Then we have three other groups equally important – ICT [information and communication technology], the thread that brings a lot of infrastructure together; science, agriculture, and environment as another group and how do we bring that together; and then we’ve got sports, cultural, and artistic groups. Those are the nine broad groups, so it’s a very broad definition of infrastructure and I think it’s important to have a broad definition so that we capture as much as we can and try and shape the strategy to consider those things for the next thirty years.
[At that point I gave up for the evening. But Gravel twisted my arm, sort of, so here’s the rest of it.]
FAINE: How citicentric are you?
MILLER: Obviously today – going forward – Melbourne is expected to be about 80% of the state’s population. But it’s not 100% so there’s a very important regional focus that goes along with that as well. And you will see as part of our communication strategy and indeed as part of our strategy overall we’re looking at all of Victoria.
FAINE: Are you created by legislation?
MILLER: We are.
FAINE: Is it legislation that in any way secures your future? In other words, what prevents the next government coming in and legislating to abolish you?
MILLER: They could do that. Indeed, they could ignore our report. That’s probably the root of your question – we’ll do a 30 year strategy and it sits on a shelf and gathers dust. What we’re trying to do is to say how can we make sure that we are a meaningful input into the 30 year strategy. We really want to engage with the whole community on that because that’s where the answers lie. Which takes us back to the scenario we discussed at the start ultimately the politicians have to make the decisions on what they’re going to build. So the better the job we do then hopefully the better all of those issues will be aligned.
FAINE: Do you tie in with similar bodies interstate? Because a lot of the issues you talk about – Melbourne, Victoria – can’t work in isolation.
MILLER: Very much so. We’d like it to be a contest of ideas but a uniformity of views on thing where we should have a uniformity of view. So things like benefit-cost ratio analyses – we’d love to get consistency in approach across that, for example. How Infrastructure NSW works with the NSW government will be different from how Infrastructure Victoria works with the Victorian government because there are different challenges but we are engaging very closely with them to make sure we are learning the lessons from the past and trying to get the best outcome.
FAINE: Okay, one of the problems that’s emerging as we get towards the end of this introductory chat, Jim – and it’s been terrific to talk with you in such detail and off the back of talking to Evan Tattersall from the Melbourne Metro Project a few weeks ago – the audience love getting this behind-the-scenes glimpse of all the stuff that – you and your colleagues actually planning this stuff, you’ve got so much information that’s not often shared with the community, so it’s great to give some of it away – but Malcolm Turnbull’s announced what he calls the Better Cities project. Melbourne City Council has a vital role, and local government around the whole state, not just in central Melbourne, local government claim that they have a role and want to exercise their powers and flap their wings on this stuff. The state government clearly has a role as well and I’m just wondering where you all butt heads – where you all overlap, where you all bump into each other as you cover the same turf.
MILLER: I think it’s great that all of this work is being done, because people are taking a long term plan within their areas of focus on what the infrastructure needs are.
FAINE: But you’re overlapping, inevitably.
MILLER: So what we’re doing is a 30 year plan and all of that work is a really important input into what we’re doing. We don’t have all the answers, so to the extent that a really good body of work has been done on X, Y, and Z, fantastic. That can feed into our strategy. We may not butt heads – we may be in heated agreement as we go through, or we may have a different view, or be at the margin depending on what the scenario is. But great that we’ve got the discussion. Importantly – critically – great that we’ve got the information.
FAINE: Is there, just finally, an idea of what it all looks like? Is there a model? Is there a country where you think they do infrastructure really well? Sometimes for social experiments we look to the Scandinavian countries; we sometimes look to California and say they’re way ahead on IT. Sometimes we look to New Zealand for progressive ideas on – you know, the first country in the world where women voted and so on. Is there a comparable economy or society anywhere which Jim Miller looks at and says,”They do it very well”?
MILLER: I think all those examples are really good ones. But the answer for Victoria will be a Victoria-specific answer. There is no endgame from our perspective other than to look around the world and pick up the best ideas and approaches on all the factors that go into it. At the end of the day it will be a Victorian-driven process. We’re saying to people, we don’t have any fixed views on what the outcome is – that’s the important point. So let’s start that discussion – we have a year to get it done. So we don’t have a lot of time, but we’re starting actively now and we want to engage to make sure we get the best answer.
FAINE: Are there engineers, architects, designers and so on with input or is it all just merchant bankers?
MILLER: So many lions, so little time, Jon. It will be a broad church for sure.
FAINE: A broad church.
MILLER: Very much so. We’re inviting everyone to contribute to the discussion.