Tuesday, November 25, 2014

The secret report Napthine won't let you see

Within months of becoming treasurer, Kim Wells commissioned a report. He asked the Victorian Competition and Efficiency Commission to deliver "a state-based reform agenda" – a user manual for boosting Victoria's economic growth.

It had been abysmal for two years. High population growth was masking "dwindling growth in productivity and in per capita GDP – the main determinants of growth in living standards". And the Australian dollar was set to remain high, "threatening the competitiveness of Victorian exports".

Wells knew the problems. He wanted Victoria's strengths benchmarked against those of other states and he wanted a list of options that would "yield the greatest potential benefit in light of Victoria's relative competitive strengths and weaknesses".

He wanted it within in nine months.

The commission issued a discussion paper, received 81 submissions, convened conferences, commissioned outside studies and published a draft report two months ahead of the deadline in November 2011.

Then it convened another conference, received another 37 submissions, and presented its final report to the government by the deadline in January 2012. Then nothing. Absolutely nothing.

Not only did Victoria's government not respond to the >commission's report, it did not publish it. Not at all. It was as if it had never happened.

Like the Productivity Commission at the national level, the Victorian Competition and Efficiency Commission is unable to publish its final reports off its own bat.Its reports are considered to be reports to the government. But the government is expected to publish them after considering what is in them. To keep them secret would deny the public a return for the money it spent preparing them.

The Order of the Governor in Council establishing the commission even sets out a timeframe: "The treasurer should publicly release the final report within six months of receiving it from the commission," it says.

As well, "the government should publicly release a response to the final report within six months of the treasurer receiving that final report from the commission, regardless of the date of release of the final report". Neither of these things happened.

Apparently, the loophole is the word "should". Other parts of the order use the word "must". Although clearly against the intention of the commission's founders, it would be legal to make sure one of its reports never saw the light of day, which is what the government is trying to do.

By keeping it secret for 32 months, right through to the end of its time in office, it has probably buried it for good. If, as is likely, a new government is elected on Saturday, it might be unable to release it. That is because of a convention that unpublished reports delivered to one government are unavailable to its successor. The convention exists to stop an incoming government trawling through its predecessor's files.

A look at the website listing the 19 reports the commission has completed since it was established by Steve Bracks in 2004 reveals only one has never been published. It is as if the Baillieu and then Napthine governments were embarrassed by what the commission told them.

It is possible to make some guesses. An ACIL Tasman report prepared for the review found against large road projects, saying some had a benefit-cost ratio of as little as 1, "with little public information about what alternatives were considered".

In contrast, small road projects typically had a benefit cost ratios of 3. It suggested "less focus on large projects" and "more on modest projects that have a higher rate of return".

The rate of return for the East West Link is said to be 0.8. Even bulked up to include nebulous "wider benefits", it is to just 1.4.

ACIL Tasman suggested congestion charges as alternative. "The introduction of time-varying one-way tolls in the Sydney Harbour Bridge and tunnel have increased off-peak traffic and reduced rush-hour traffic," it said. "The economic case for congestion charging is strong, and the political challenge becomes easier if some or all of the revenue is channelled into road and public transport improvements."

The commission agreed. Responding to congestion by building new roads did "not tackle the underlying causes". It generally only succeeded in improving travel conditions "by small amounts or for a limited period".

"Future transport policy and planning should identify ways to work existing assets harder and provide services more efficiently as opposed to resorting to new investment as the first recourse," it wrote in its draft report.

Denis Napthine plumped for the East West Link only after Tony Abbott made it clear he was prepared to grant Commonwealth funds for big road projects, but would withhold them from (more important) big rail projects such as the Melbourne Metro. Napthine scaled back the Metro and pushed the timeline out into the next decade.

Perhaps embarrassed by the avalanche of expert voices saying it was a poor use of money, he might have felt he did not need yet one more voice, a report commissioned by the Coalition itself when his predecessor was premier.

It is an appalling way to run a government and an appalling way to treat voters who you are trying to persuade you have the best plan.

If Napthine loses on Saturday, it will be in part because he did not stand up to Abbott and in part because he did not level with the public about what his own experts were telling him about his platform.

In The Age and Sydney Morning Herald