27 Oct 2014

Clayton Utz welcomes CEDA report A Federation for the 21st Century

Melbourne, 27 October 2014: Clayton Utz supports calls for a review of the Australian Federation to ensure it delivers the best policy outcomes for future generations, with new research released today by the Committee for Economic Development of Australia (CEDA) identifying a number of key areas for reform.

The CEDA research report, A Federation for the 21st Century, examines key issues for our Federation and what can be done to improve the current structure and policy outcomes. It examines a range of different approaches, and areas where changes could improve outcomes.

Clayton Utz partner Brad Vann and senior lawyer Bree O'Connell are among the report's contributing authors, which include Professor Anne Twomey, Terry Moran AC, Lucy Hughes Turnbull AO, The Hon. John Brumby, and Professor Kenneth Wiltshire.

In their chapter, Providing public infrastructure in Australia, Brad and Bree examine Australia's current public infrastructure challenges, the benefits of infrastructure investment, and possible solutions to drive infrastructure investment as a key engine of Australia's future growth.

"The response to the public infrastructure problem should be driven at the federal level of government," said Brad, who has advised on some of Australia's largest social and economic infrastructure projects. "Both the Productivity Commission and the National Commission of Audit acknowledge the paramount role of the states in identifying and delivering infrastructure. This recognises that most infrastructure will benefit users and residents within a particular state, so the state governments are in the best position to assess the merits of an infrastructure project to meet local needs.

"However, the responsibility vested in the states ignores the vertical fiscal imbalance and the fact that the Commonwealth Government holds the purse strings. Given the benefits of investing in infrastructure for the nation as a whole, the Commonwealth Government's relative financial strengths and ability to analyse national networks for more efficient provision of infrastructure mean it has considerable power and scope to set the policy for investment in Australia's infrastructure.

"Arguably the Commonwealth Government's two main roles are co-ordinating the development of nationally significant infrastructure and linking federal funding with requirements for efficient infrastructure delivery by the states. The former is well in hand with recent amendments to the constitution of Infrastructure Australia. The latter is still a work in progress."

Launching the report in Sydney today, CEDA chief executive Professor the Hon. Stephen Martin echoed calls for responsibility for the funding and delivery of transport infrastructure to be linked. "We need to move away from State Governments being held to ransom by the Federal Government and match service delivery responsibility with funding," he said in a media release.

Among the report's recommendations are for an increase in State Government control of revenue targeted specifically for schools, health, public transport and roads.

Brad will join contributing report authors Professor Percy Allan AM (Principal, Percy Allan & Associates) and Tanya Smith (Principal, Nous Group), and Dr Ian Watt AO (Secretary, Department of the Prime Minister and Cabinet), for a CEDA panel discussion on the report in Melbourne this Wednesday.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.