FARMERS should be free to sell their water rights to the cities, congestion charges are needed on city roads, and the Federal Government should demand performance targets as its price for investing in urban public transport, a report to the Business Council urges.
The report, by Rod Sims of Port Jackson Partners, says Australia is being held back by poor infrastructure - but our problem now is not so much too little spending as bad policies and rules that prevent old infrastructure being put to best use and new infrastructure from going where it is most needed.
Mr Sims, once a top bureaucrat and economic adviser to former Prime Minister Bob Hawke, says most of the potential gains will come from policy reforms rather than more spending.
Only areas such as water buybacks and public transport need more money, he says.
His report, Groundwork for Growth: Building the Infrastructure that Australia Needs, argues that sensible policies are being blocked by sacred cows.
On water, he says farmers should be able to sell their water rights to anyone, anywhere, any time, with all barriers to trade removed.
"We aren't necessarily short of water - we just don't make the best use of it," Mr Sims says. "The problem is that water has been over-allocated to irrigators. I don't see any alternative to allowing them to trade the water to people who can make better use of it, including the cities."
In big cities like Melbourne and Sydney, he says, "you have to have congestion pricing, and you have to have good public transport".
More money needs to be spent on improving public transport, inter-modal hubs and road and rail links to the ports - but if the Commonwealth is paying, it should demand "target service levels and regular reporting of performance against them".
"Examples should include targets for road congestion levels, and targets for public transport reliability and crowding," the report says. "If we do not plan for such outcomes, they will never happen."
The council, an influential body representing Australia's 100 biggest companies, wants a new reform agenda in which Infrastructure Australia will publish cost-benefit analyses for each project, and publicly monitor progress in meeting its goals.
"What we're focusing on is the way forward," says council policy director Maria Tarrant.
"What is the infrastructure we will need for a population of 35 million people in 2049?
"Infrastructure is the way we reconcile population growth and environmental constraints. People won't have confidence in population growth unless they feel their standard of living is going to be better as a result."
The council wants better incentives for private investment in infrastructure, sharper planning priorities, and reporting of "transparent and measured progress" towards better outcomes.
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