Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2022-2023-2024-2025
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL LAND TRANSPORT ACT AMENDMENT (BETTER VALUE FOR
TAXPAYERS) BILL 2025
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Circulated by authority of
Allegra Spender
NATIONAL LAND TRANSPORT AMENDMENT (BETTER VALUE FOR TAXPAYERS)
2025
OUTLINE
The purpose of this bill is to deliver better value for taxpayer dollars by strengthening
accountability and transparency measures in the approval process for large-scale,
federally funded infrastructure projects under the National Land Transport Act.
The Federal Government has committed to an Infrastructure Investment Pipeline of $120
billion to deliver National land Transport Infrastructure over the next 10 years. This
spending on infrastructure equates to over $10 billion per year and does not include other
discretionary infrastructure announcements made by the Government, such as in the lead
up to an election campaign.
Analysis from the Grattan Institute shows that transport infrastructure spending as a share
of GDP has increased overtime and that Australia is spending more than ever on so-called
'megaprojects' that are particularly risky and more susceptible to cost blowouts.1
While infrastructure projects are important for expanding the capacity of our cities and
regions, there is finite funding chasing unlimited project requests across the States and
Territories. Taxpayers deserve to know that such large quantum of funds are being used
appropriately and that decisions about the prioritisation of expenditure are soundly based
and transparently reported.
The bill is in response to recent reviews of federally funded land transport projects, namely
the Independent Strategic Review of the Infrastructure Investment Pipeline (ISRIIP) and
the Independent Review of the National Partnership Agreement on Land Transport
Infrastructure Projects (RNPA), and associated recommendations.2,3 These reviews
demonstrate that Australians are receiving poor returns on their investment in national land
transport infrastructure projects and highlighted significant issues concerning the
processes for selecting land transport projects..
The Review of the IIP found that there was $32 billion in known cost pressures on an $120
billion investment pipeline, representing 25% of the original cost. These known cost
pressures, attributed to 'market capacity' in the sector, are likely to increase substantially
between now and the end date of the IIP in 2033.
The RNPA found significant shortcomings in investment decision-making. Among other
things, the RNPA outlined concerns around a lack of clear investment principles and
priorities as well as evidence that infrastructure projects had been marked as 'approved'
before proper assessment of the costs, scope of work and completion requirements.
Ultimately the RNPA determined that these issues "undermined the Commonwealth's
capacity to be an informed investor in land transport infrastructure".4
1
Terrill, M. Emslie, O. and Moran, G (2020), The Rise of Megaprojects: Counting the costs, Grattan Institute
2
Gardiner-Barnes, C. Mrdak, M. and Waldock, R. (2023), Independent Strategic Review of the Infrastructure
Investment Program - Executive Summary, Department of Infrastructure.
3
Halton, J. (2023), Independent Review of the National Partnership Agreement on Land Transport Infrastructure
Projects, Department of Infrastructure.
4
Halton, J. (2023)
At the time this bill is presented, the Federal Government is yet to release the full report of
the ISRIIP and is yet to formally respond to the RNPA, despite having signed a new
agreement taking effect in July 2024. Although some of the recommendations in these
reports have been addressed in a new Federation Funding Agreement Schedule, the
Schedule can reasonably be characterised as 'more of the same'. In particular, there is
nothing to suggest any genuine desire to improve transparency or to introduce effective
mechanisms aimed at learning lessons - both good and bad - from past projects.
These reports are in addition to national media outlining issues with individual projects,
including the Melbourne Suburban Rail Loop.5
To address these concerns and restore confidence in Land Transport Investment
Decisions, the bill adds three additional measures that will increase the transparency and
accountability in infrastructure spending decisions. Under the amendments, the Federal
Government will need to:
• Prepare and publish a periodic, long-term national land transport plan - something
more detailed the Government's 2023 Infrastructure Policy Statement - outlining the
Government's stated priorities and assumptions underpinning investment; and
decisions that determine Australia's long-term infrastructure pipeline.
• Publish all business cases for federally funded projects above a threshold;
• Conduct and publish post completion reviews for all projects over a certain
threshold, focussing on cost and time.
FINANCIAL IMPACT
The bill will have no financial impact.
NOTES ON CLAUSES
Clause 1: Short title
Clause 1 is a formal provision specifying the short title of the Act.
Clause 2: Commencement
The act commences on the day after the Act receives Royal Assent.
Clause 3: Schedules
This clause gives effect to the provisions in Schedule 1 of the Bill.
Schedule 1 - Amendments
Item 1 inserts new words into Section 3.
5
Mizen, R. (2024), "Labor was warned Suburban Rail Loop 'not a reasonable investment'", Australian Financial
Review.
This section relates to overall objectives of the act with the existing objective being to
assist national and regional economic and social development by provision of
Commonwealth funding.
The amendment will insert a new objective of the act to provide transparency in
Commonwealth funding decisions for land transport infrastructure to ensure efficient and
accountable use of Commonwealth funds.
Item 2 inserts new definitions into Section 4.
These definitions allow for the transparency and accountability measures introduced in the
remaining Items in this Bill. This includes the definition of:
• Investment Project relevant threshold amount;
• Major Commonwealth Funded Projects;
• Material change;
• National Land Transport Infrastructure Plan;
• National Land Transport Project; and
• Transport Development and Innovation Project relevant threshold amount.
Item 3 Inserts a new Section 15 into a new Part 2A.
This introduces a requirement a National Land Transport Infrastructure Plan, outlining the
strategic priorities for national land transport projects of the Government of the day. The
Plan must cover a period of at least 10 years and outline the current and proposed pipeline
of projects, the funding requirements, and key challenges and opportunities over that
period.
In addition, the Plan must outline how it has been influenced by other relevant documents,
including Federal Government economic, social and environmental strategy documents
and State/Territory Infrastructure plans.
The Minister has the ability to make changes to the National Land Transport Infrastructure
Plan, for example, with a change of Government, leader or minister. However, the Minister
must table a replacement National Land Transport Infrastructure Plan within 15 sitting
days, including an Annexure explaining any changes in the amended plan.
The purpose of the National Land Transport Infrastructure Plan is to hold the
Government's investment decisions to a longer-term strategy and reassure the public that
investment decisions are made within that context. This will minimise the opportunity for
National Land Transport Infrastructure Projects to be used for purposes other than
strategic national interest, since deviations from the strategy will be more identifiable.
Item 4 inserts a new Section 15A to Part 3, Division 2
This section requires the Department to publish business cases for all projects where the
Commonwealth funding contribution meets the Investment Project relevant threshold
amount. The Investment Project relevant threshold amount is determined by disallowable
instrument. Business cases must be published within 30 calendar days of approval or
funding commitment.
Unless the Minister can justify reasons for redaction under the one or more of the reasons
in this Section, the Business Case must be published in full.
The publication of business cases serves two purposes. Firstly, publication will facilitate
greater transparency and scrutiny of Federal Government investment decisions. Secondly,
an expectation of publication will increase the incentive for the business case to be
conducted rigorously and to a high standard. If a business case reveals potential
weaknesses in the Investment Project, such as a low or negative benefit to cost ratio,
publication of that business case will, in effect, require the Government to explain its
justification for pursuing the investment.
This new Section also requires that if, throughout the course of the project's development
and delivery, the minister is advised by the Department of a material change (10% or
more) in the costs outlined in the published business case the minister must table in
parliament a paper outlining an explanation of the change as well as mitigation strategies
to prevent future changes.
The purpose of this is to reduce instances where the Government announces projects with
only preliminary or incomplete costings to understate the true investment cost. By requiring
material changes to be tabled, the Government will be incentivised to more accurately
predict the true cost of Infrastructure projects.
Item 5 Inserts a new Division 2 Section 35A into Part 4
This Section includes the same provisions as above regarding publication of business
cases for Transport Development and Innovation Projects.
Item 6 inserts new Section 94A and 94B into Part 9
Section 94A provides stricter rules around post-completion reviews. Currently, post-
completion reviews are produced on some projects but their completion, quality and
content are often inconsistent. The result is that Government fails to learn from past
projects and update assumptions, costings or inputs as appropriate.
This Section includes a requirement for an independent reviewer to undertake the review
and for the government to publish the review within 12 months of the project's completion.
If there are substantial differences over the course of the project relating to the duration or
cost of a project, the post-completion review will need to outline the reasons for these
differences and the implications for future projects.
The purpose of these provisions is to ensure that the Federal Government is appropriately
analysing major infrastructure projects and incorporating learnings into the design and
delivery of future projects.
Section 94B requires consolidation of key post-completion review information every three
years into a single report to be published on the Department's website.
The purpose of these provisions is to provide an additional opportunity for the Government
and Department to better understand the reasons behind delays and cost blowouts on
projects as well as learn lessons from any costs savings or efficiently run projects.
This provision will also give the public another tool to scrutinise and evaluate infrastructure
announcements, relative to the historic cost of similar projects. If project announcements
are historically higher or lower than the actual cost, the public will be able to make more
informed assessments of the value for money on a project.
Item 7 Inserts a new Section 95A into Part 9.
This Section allows the Minister to prescribe transitional provisions by disallowable
instrument.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
NATIONAL LAND TRANSPORT AMENDMENT (BETTER VALUE FOR TAXPAYERS)
2025
This bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the bill
Insert a brief overview of the bill and state its general purpose.
Human rights implications
This bill does not engage any of the applicable rights or freedoms.
Conclusion
This bill is compatible with human rights because it does not raise any human rights
issues.
Allegra Spender MP