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Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014

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2013-2014

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

INFRASTRUCTURE AUSTRALIA AMENDMENT (COST BENEFIT ANALYSIS AND OTHER MEASURES) BILL 2014

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

(Circulated by Authority of the Minister for Infrastructure and Regional Development,

the Hon Warren Truss MP)

 



 

INFRASTRUCTURE AUSTRALIA AMENDMENT (COST BENEFIT ANALYSIS AND OTHER MEASURES) BILL 2014

 

OUTLINE

 

The purpose of the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014 is to amend the Infrastructure Australia Act 2008 (IA Act) to clarify the legislative and administrative arrangements for Infrastructure Australia as soon as possible after commencement of the Infrastructure Australia Amendment Act 2014.

The Bill will provide clarity for the role of Infrastructure Australia, and will rectify the currently incorrect placement of provisions pertaining to cost benefit analyses of infrastructure proposals in the Infrastructure Australia Act 2008. This will ensure that cost benefit analyses inform the evaluation of proposals under the IA Act.

The Bill will amend the Act to include in the functions provision the requirement that Infrastructure Australia undertake evaluations of proposals that involve Commonwealth funding of at least $100 million. This figure is to be established as a benchmark based on 2014 dollars and indexed at least every five years to ensure relativity is maintained in future years.

FINANCIAL IMPACT STATEMENT

 

There is no net impact on the Australian Government Budget flowing from this amendment.

 





 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014

 

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

The Bill will amend the Infrastructure Australia Act 2008 (the Act) to clarify the legislative and administrative arrangements for Infrastructure Australia as soon as possible after commencement of the Infrastructure Australia Amendment Act 2014.

Key elements of the Bill include:

a)              Amending the provisions in the Act relating to the function to evaluate proposals for investment in, or enhancements to, nationally significant infrastructure, to include the requirement that Infrastructure Australia undertake evaluations of proposals that i nvolve Commonwealth funding of at least $100 million.

b)              Moving provisions currently under 5B of the Act relating to cost benefit analysis to a new section 5AA. 

c)              Providing that a proposal must not be included in an Infrastructure Priority List unless a cost benefit analysis of the proposal has been prepared in accordance with the approved method.

d)             Inserting a definition for ‘proposal’.

 

Human rights implications

This Bill does not engage any of the applicable rights or freedoms.

 

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Minister for Infrastructure and Regional Development, the Hon Warren Truss MP

 

 

INFRASTRUCTURE AUSTRALIA AMENDMENT (COST BENEFIT ANALYSIS AND OTHER MEASURES) BILL 2014

 

NOTES ON CLAUSES

 

Clause 1: Short Title

Clause 1 provides for the Act to be called the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Act 2014.

Clause 2: Commencement

Clause 2 provides that each provision of the Bill commences, or is taken to have commenced on the day after this Act receives the Royal assent.

Clause 3 : Schedules

Clause 3 is intended to outline the effect of the Schedules to the Bill.  Each Schedule would amend or repeal the Act specified in that Schedule as provided by the items of the Schedule.  Any other item in a Schedule has effect according to its terms.

 

Schedule 1 - Amendments

Infrastructure Australia Act 2008

Item 1

Item 1 inserts a new definition under Section 3 for proposal.

Item 2

Item 2 inserts a new subsection to provide that the function to evaluate infrastructure proposals under section 5A(1) includes the power to evaluate proposals for investment in, or enhancements to, nationally significant infrastructure that involve Commonwealth funding of at least $100 million.

Item 3

Item 3 inserts a new Section 5AA and moves relevant provisions that were in Section 5B.

Section 5AA - Method for preparing cost benefit analyses

New Section 5AA describes the provisions of the method Infrastructure Australia may approve for proposals it will evaluate. 

New subsection 5AA(1)  provides that Infrastructure Australia must not include a proposal in an Infrastructure Priority List unless a cost benefit analysis of the proposal has been prepared in accordance with a method approved under subsection 5AA(2).

Subsection 5AA(2) requires that, should Infrastructure Australia approve a method for preparing cost benefit analyses of proposals.  

Subsection 5AA(3) provides for review of the approved method no later than six months after the commencement date of Section 5AA, and every 24 months. 

Subsection 5AA(4)  provides that a review of a method for preparing cost benefit analyses must consider whether cost benefit analyses are adequately taking account of considerations of social, environmental and economic costs and benefits.  

Subsection 5AA(5) requires that the  report of the review be published on Infrastructure Australia’s website within 14 days of that report being approved by the Board of Infrastructure Australia. 

Item 4

Item 4 repeals subsection 1(ba) under Section 5B “Functions - developing Infrastructure Plans”, which is the previous location in the Act of the provision for cost benefit analyses of proposals to be undertaken by Infrastructure Australia. 

Item 5

Item 5 repeals subsections 3, 6, 7 and 8 under Section 5B “Functions - developing Infrastructure Plans” as these are now provided for under Section 5AA.

Item 6

Item 6 omits the reference to previous subsection 5B(3) and inserts reference to subsection 5AA(2).  This is a consequential amendment of the insertion of the provisions of new Section 5AA. 

Item 7

Item 7 inserts new Section 39E.

New Section 39E - Indexation of amounts

New Section 39E(1) provides for a methodology to be applied to the amount referred to in Section 5A(2) to ensure this amount maintains relativity into future years.  It directs that the amount referred to in Section 5A (2) (a) is to be subject to indexation in accordance with the method to be determined by the Minister by legislative instrument, and specifies that the legislative instrument must provide for this amount to be indexed for the first time on a day in 2019, and at least once every five years thereafter. 

New Section 39E(2) provides that, the amount in section 5A(2) will be changed to reflect the indexed amount on and from a day of indexation.