Infrastructure Victoria’s 30-year strategy: confusing and incomplete

Overview

INFRASTRUCTURE VICTORIA released its new draft 30-year infrastructure strategy for community comment in December 2020. Comments are invited before 26 February. A final strategy will then be presented to the State Government, who’ll have 12 months to respond and develop a 5-year infrastructure plan (based on the strategy, one hopes!).

There’s little to explain how its 95 recommendations were arrived at. There are very few stated targets or directions, nor is there a list of KPIs to monitor as time passes, and drive adjustments to the strategy.

IV’s ten stated objectives are very broad, motherhood statements, like ‘Foster healthy, safe and inclusive communities’, or ‘Protect and enhance natural environments’.

The problem with such vague objectives is that nearly all Government strategies (and many corporate ones) have them in one form or another: they’re not specific to an infrastructure strategy. Recent major project business cases and EESs have them too; in that case they’re used to overstate positive effects whilst downplaying negative ones. ‘Optimism bias’ is the polite term for this; I prefer to call it ‘deliberate distortion’.

Sadly, IV’s strategy has fallen victim to this problem as well.

Even against the nebulous objectives, there’s no indication that the strategy is well-balanced, that it’ll achieve its purpose, or that it’ll avoid undue and unacceptable trade-offs. These are vital attributes of a well-founded, evidence-based and responsible strategy these days.

If anything, the far-from-perfect scorecard indicates that the strategy puts economic objectives ahead of social and environmental ones. It’s time we stopped doing that, once and for all.

Overall, there’s little to demonstrate:

• where it’ll get us to in 30 years, on measurable trajectories (like emissions reduction/elimination, air quality improvement, energy efficiency/renewability, community safety/health, economic performance); or
• what’ll be required if sudden shocks (like a pandemic!) or new imperatives (like fast-tracking emissions elimination, or adaptation to rapid climate change) arise.

As I understand it, the State Government is free to accept or reject IV’s strategy. Maybe they’ll cherry-pick from it, and/or modify it to suit their purposes. They might just ignore it completely.

IV doesn’t state that the strategy is a cohesive whole and should be adopted in its entirety. I suppose that’s not surprising, because the strategy isn’t a cohesive whole anyway.

In this day and age, we need to plan thoroughly and carefully. Our strategies and plans must include initiatives that have been properly tested against all alternatives, and against strategic objectives that contain concrete targets or directions (avoiding imprecise words like ‘improve’ or ‘maximise’) and eliminate negative impacts and trade-offs.

All our planning now needs to fall in line with the overriding imperative of avoiding catastrophic climate change. If it doesn’t, then it will, by definition, only contribute more to the problem.

The draft IV strategy – bewildering structure

The draft strategy contains 95 recommendations, variously grouped under:

• Ten objectives (plus one principle)
• Four sections (and sixteen sub-sections)
• Ten sectors

The names of the objectives, sections and sub-sections all start with an action verb. Look at the table above – someone’s tried to ensure that every verb is different, although ‘align’, ‘build’ and ‘foster’ each crept in twice.

Although the verbs are action-oriented, they’re also largely non-specific. ‘Advance climate change mitigation and adaptation’, ‘Align social infrastructure with better service delivery’ – what do these actually mean?  How would one gauge when they’ve been fulfilled?

The ten stated objectives are generalised and motherhood in nature and there’s little to show that they’ve been developed or derived from a demonstrable evidence base. They cover all the usual, laudable principles, such as ‘Foster healthy, safe and inclusive communities’, ‘Reduce disadvantage’, or ‘Lift productivity’.

The four main sections: ‘Confront long-term challenges’, ‘Manage urban change’, ‘Harness infrastructure for productivity and growth’ and ‘Develop regional Victoria’, seem to have little meaning and a lot of overlap. It’s unclear why they were chosen, and how they relate to the objectives.

The structure of the document is endlessly confusing. Why not establish some definitive objectives (real outcomes, not motherhood principles) and why they exist, then discuss what actions are needed to achieve each? If any actions satisfy more than one objective, that can be explained. If any actions detract from any of the objectives, then say so, and/or omit or change them, so that they don’t; this is a major omission from the document as it stands (more on this later).

The recommendations – a grab bag

The 95 recommendations cover a wide range of things. Some are projects, some are policies, some are simply actions (like ‘Publish Victoria’s transport plan’).

Surprisingly few recommendations encapsulate tangible targets or directions. By tangible I mean a defined target in absolute or percentage terms, with a firm date. I’ve found seven of these:

• Zero net greenhouse gas emissions by 2050 – this is already legislated and is cited in many of the recommendations.
• Phase out internal combustion engine vehicles during the next 30 years (recommendation 1).
• All new homes to be 7-star energy rated by 2022, 8-star by 2025 (recommendation 4).
• Achieve legislated 2032 public transport accessibility targets (recommendation 44).
• Renew at least 50% of all older public housing (low rise apartments and 3-bed detached houses) by 2031 (recommendation 57).
• 30% tree canopy coverage in new growth areas (recommendation 71).
• Reach at least 4.5 social housing dwellings per 100 households by 2031 (recommendations 73 and 94).

Many recommendations stipulate timeframes (some very short) for implementing new policies and process reforms, but don’t attach physical targets or objectives to those changes.

The strategy frequently mentions the legislated target for Victoria to achieve net zero greenhouse gas emissions by 2050. However, there are no targets stated for the contributions of each infrastructure sector to that total, nor to any interim steps along the way. There’s no evidence that the strategy is designed to help achieve net zero emissions, nor do I have any confidence that it will.

How were the recommendations arrived at?

There’s little demonstrated rationale behind the choice of each recommendation.

Most of the evidence base used to support the recommendations relates to existing shortcomings (for example, public housing provisions, or public transport accessibility). Some projections are made, but they’re mostly looking at ‘business-as-usual’ situations.

A possible exception to this is contained in a supplementary report on transport and land use modelling, which I’ve just started reading. I’ll cover it shortly in a follow-up post. I’ll be looking for what the transport modelling tells us about the future, and evidence that the strategy’s recommendations have been informed by this in some way.

A few choice issues to get to grips with…

I have issues with just about every recommendation. However, I’ll concentrate on a few particular ones here.

Circular economy (recommendations 28-31)

IV states that: ‘Also known as a ‘closed loop’ system, a circular economy aims to reduce the environmental impacts of production and consumption by avoiding waste and reusing or recycling materials.’

This is incorrect. A circular economy is one that eliminates waste and the constant use of resources. The Ellen MacArthur Foundation has a lot of detail about the circular economy. Here are their definitions (bolding is mine):

THE CIRCULAR ECONOMY
An economy that is restorative and regenerative by design. In a circular economy economic activity builds and rebuilds overall system health. The concept recognises the importance of the economy needing to work effectively at all scales – for big and small businesses, for organisations and individuals, globally and locally. It is based on three principles:
1. DESIGN OUT WASTE AND POLLUTION: What if waste and pollution were never created in the first place? A circular economy reveals and designs out the negative impacts of economic activity that cause damage to human health and natural systems. This includes the release of greenhouse gases and hazardous substances, the pollution of air, land, and water, as well as structural waste such as traffic congestion.
2. KEEP PRODUCTS AND MATERIALS IN USE: What if we could build an economy that uses things rather than uses them up? A circular economy favours activities that preserve value in the form of energy, labour, and materials. This means designing for durability, reuse, remanufacturing, and recycling to keep products, components, and materials circulating in the economy. Circular systems make effective use of bio-based materials by encouraging many different uses for them as they cycle between the economy and natural systems.
3. REGENERATE NATURAL SYSTEMS: What if we could not only protect, but actively improve the environment? A circular economy avoids the use of non-renewable resources and preserves or enhances renewable ones, for instance by returning valuable nutrients to the soil to support regeneration, or using renewable energy as opposed to relying on fossil fuels.

Source: Ellen MacArthur Foundation

Of course, the Victorian Government can’t go it alone, nor can the Federal Government; it’ll take a global effort. Nonetheless, there are some vital principles that IV must take seriously if they want to use the ‘circular economy’ term.

IV’s definition refers only to reducing waste, and using it more effectively. Whilst this is laudable (and IV’s recommendations here are good, but incomplete), it all falls well short of a circular economy and shouldn’t be termed as such.

IV says ‘In early 2020, the Victorian Government publicly committed to transitioning to a circular economy in its new policy framework Recycling Victoria: A new economy.’ I haven’t read this, but if it only covers recycling then it can’t be said to cover all aspects of a circular economy.

Sorting out our broken recycling system is vital, but it’s nowhere near enough.

Throughout the strategy document, IV suggests questions it would like our responses to. For the circular economy, on page 95, they are:

• What other cost-effective actions can the Victorian Government take towards a circular economy?
• What more can the Victorian Government do to enable more private investment in recycling facilities?

These are loaded questions, driven by the severely limited definition of a circular economy that IV has used. Why should circular economy actions be limited to things that are ‘cost-effective’ (apparently it used to be cost-effective to export our waste to China, for them to recycle it!)? Why is more private investment needed in recycling facilities? Why not public investment, subsidy or legislation to achieve circular economy outcomes?

Governments must consider how to reorientate all their spending decisions (and revenue sources) to circular economy activities. A move towards a circular economy can only be made through this lens. Positive actions rather than negative ones, eliminating trade-offs, would be a good place to start.

I think this whole area of discussion is vital and deserving of much more than IV has put into it. IV (and the Victorian Government) mustn’t misuse or cheapen the circular economy term.

Transport pricing confusion (recommendations 45-55)

There are a lot of recommendations that address transport pricing:

• Adopt peak and off-peak public transport fares
• Price each public transport mode differently
• Abolish the free tram zone
• Remove annual charges while introducing distance-based pricing for electric vehicles
• Appoint an independent transport pricing adviser
• Increase and extend the Melbourne Congestion Levy on parking
• Incorporate congestion pricing for all new metropolitan freeways
• Trial full-scale congestion pricing in inner Melbourne
• Trial demand-responsive pricing on parking in inner Melbourne
• Price parking at major public transport hubs, all train stations and park-and-rides
• Phase out fixed road user charges and introduce user pays charging

This is trying to address several issues at once, and not very well, in my view. They affect:

Public transport revenue (positively) and use (negatively):

• Peak and off-peak fares are worthwhile, not to reduce peak crowding but to encourage more off-peak use. But IV proposes increasing peak fares, rather than reducing off-peak ones. 
• Pricing each transit mode differently will undo the benefits of integrated fares and separates the modes instead of seeing them as components of the same system. Perhaps instead of the oversimplified, politically-manipulated two-zone fare system for Melbourne, we should consider distance- or time-based fares for all public transport; that was one of the stated benefits for moving to integrated automated ticketing in the first place.
• Abolishing the free tram zone seems popular amongst the pundits, but many cities have free transit in their CBDs. In Melbourne, many users have already paid for their tram use through using transit to commute (and this percentage will increase in future, as car use declines for CBD commuting). Will abolition really affect CBD tram crowding all that much? The free City Loop service is a separate tourist attraction and can’t safely cater for increased demand without being modernised (losing its tourist appeal in the process).
• Pricing park-and-ride will push more users away from transit. A better solution might be to ‘gate’ access to secure station car parks using a valid myki, then charge for removing the vehicle if the myki hasn’t been used that day from that place (to deter parking freeloaders).

Compensating for revenue loss from non-fossil fuel vehicles:

• Replacing up-front charges with distance-based ones for EVs will increase perceived costs of their use, and could slow EV take-up. Has the effect of this been taken into account?
• The Government has already announced a distance-based charge from July 2021, of 2.5 cents per km for EVs (and 2 cents for plug-in hybrids); the rationale for this is to replace lost revenue from fuel excise and help make EVs ‘pay their way’; a debatable notion even for fossil fuelled vehicles.
• Why are EVs and hybrids singled out for special pricing treatment? EV charge revenues go into State coffers while fuel excise is Federal, and there’s no hypothecation of either of them.
• We need incentives, not barriers, to wider, faster EV adoption. Transition settings should allow for this as part of the move towards wider pricing reform for all transport (which is long overdue).

Managing traffic congestion:

• A key feature of using direct pricing to manage congestion is that the more successful it is, the less revenue it raises.
• Why use congestion pricing on new freeways (thus making them into tollways)? We need to price users onto them, not away from them (and onto other roads). Of course, we can’t do this properly while we still have toll roads as well. Rather than build more (toll) freeways, what would happen if existing toll roads were bought back, and their tolls removed? Has the effect of doing this been tested for its effects on congestion? Or on the subsequent ability to introduce a proper road pricing regime, one that prices traffic off the roads we don’t want it on?
• I have no problem with a Government levy on off-street parking in busy areas, but I haven’t seen any proof that it has directly reduced congestion. Too many other things have happened since its implementation, and I suspect ‘congestion levy’ is a serious misnomer. Sydney has similar levies and they apply in several places – the CBD, North Sydney, St Leonards and Chatswood, for example. Why not use them in some of the other activity centres around metro Melbourne, in conjunction with transit improvements like the Suburban Rail Loop?

We must consider pricing of public and private transport together, not separately. The overall objectives of urban transport pricing must be clear and unambiguous. There are inherent conflicts between pricing to increase revenue, to recover costs or to manage demand and mode choice.

IV’s recommendations don’t represent a clear and cohesive package; collectively their main effects will probably be to push people away from both public transport and future freeways, which doesn’t make any sense to me.

The single best recommendation of the lot is to appoint an independent transport pricing adviser, provided they have teeth to make their advice stick. Their first action should be to throw out all the other recommendations and start again!

East-West Link (recommendation 67) 

Oh no, not again…

What’s the rationale behind choosing to protect an inner-city east-west road link (i.e. East West Link, modified to join up with the dodgy West Gate Tunnel)? This route has never been protected before, and much of the land it would need is already used for other, more valuable purposes (like residential areas or Royal Park). Land acquired for it by the Napthine Government has been returned by the Andrews Government to its previous purpose and sold back to others.

Although it became a costly political dogfight, I always thought the real reason for cancelling the project was its large impacts (including negative economic impact as well as property destruction and community opposition).

What’s changed?

Reintroducing it without demonstrating that it’s needed, or justified, is just inviting more political chicanery and wasted public funds.

How balanced is the strategy?

The 95 recommendations are tabulated against 11 objectives (actually the 10 described objectives plus ‘Align with land use and infrastructure integration’).

Here’s a radar chart of the number of ticks that each objective gets across the 95 recommended actions. I’ve grouped the objectives under economic, social and environmental headings:

This is a very poor way of assessing the strategy’s efficacy, but it’s the only way possible from the information given, with its inherent optimism bias.

The strategy doesn’t look very well-balanced (if it was, the radar chart would be much more ‘circular’). Economic objectives (like ‘Lift productivity’) get more ticks than Environmental ones (all of which score 40 ticks or less). The two Social ones, which overlap somewhat anyway, score quite differently (‘Reduce disadvantage’ scores low).

Obviously, some recommendations will do more than others against each objective, but no information is given on this; they simply get a tick against the objectives they contribute to, rather than a rating. Worse than this, there’s no indication of which recommendations score negatively against any of the objectives, only if they score positively (thus getting a tick). Some recommendations are bound to have negative effects, but these are apparently ignored.

It would be much more honest and informative (and a rigorous test of the strategy as a whole) if there was some sort of rating of each recommendation against each objective, on a scale of (say) -5 to +5, instead of just a tick. These ratings would be based on a more detailed appraisal of each recommendation and its consequent effects, both ‘good’ and ‘bad’. The overall performance of the strategy against its own stated objectives would then be much easier to understand.

Before any of that can be done, the objectives must be revisited to make them much more specific, and to address future imperatives properly.

Summary

IV’s draft strategy makes little, if any, coherent sense. Its objectives are vague and meaningless. It proposes many worthwhile reforms, but there are too many loopholes, contradictions and inconsistencies between them. Together, they won’t help us get to net zero emissions by 2050.

We must urgently eliminate emissions, extinctions, inequities, health risks, waste and outdated technologies. We must rein in our collective footprint to match the planet’s capacity to sustain us, and we must do it quickly. The science is in, on all of this.

Every strategy we develop and implement must make meaningful and measurable contributions to these imperatives. A proper strategic approach is needed, not just a motley collection of initiatives born from years of inaction.

We deserve much better than Infrastructure Victoria has given us. I’d like to see a complete re-write.

We also need a firm commitment from the State Government to adopt and implement a properly done strategy (i.e. not this draft) in its cohesive entirety, as a centrepiece to the new direction. This means no more secrecy, left-field projects or pork-barrelling at election time, from anyone. Without this kind of change, there’s no point in going further.

Comments are welcome, as always. If you feel inclined, then write to IV as well, and feel free to use my thoughts! Submissions to IV close on 26 February 2021.