On the day of the ‘race that stops a nation’ it is worth taking time to consider the runners, riders, owners and bookies in the race that builds a nation.
Don’t know what race that is?
Infrastructure Race
Well you should……. because it is a very important race that is going on right now across Australia. It is the race to build the infrastructure required to meet the needs of Australia’s growing population and to maintain our impressive run of continued economic growth.
Runners and Riders
The main runners and riders will be very familiar to you.
New South Wales
Currently out in front is New South Wales. From near the back of the pack ten years ago this horse, heavily backed by private investors, has quickly moved to the front of the race by offloading ageing assets and constructing new ones required to adapt to the latest conditions. She has been given an inside line through her trainer’s collaboration with the ground staff and officials but is currently the subject to a stewards’ enquiry concerning deceptive conduct that could lead to the jockey being unseated next year in which case all bets will be off.
Victoria
In second place is Victoria. This horse is rapidly catching up with New South Wales. Despite her red colouring she has also had no hesitation in offloading assets to get to the front of the pack. There is a question mark where some of the money is coming from to support her plans but she has plenty of ambition and regardless of rider, looks like being near the front of the field for a while to come. Punters beware though, this horse is as unpredictable as the weather where it is stabled. Her nickname ‘sovereign risk’ is well deserved and her jockey will happily pull her up if the going is not to his liking – regardless of implications in the race.
Queensland
In third place is Queensland. For a long time, this horse was out in front but it is now quickly falling back through the field because of a shortage of oats and a heavy self-imposed ideological handicap. Her trainer’s credit card is near maxed out and investors are wary to step in to help because of her jockey’s long list of demands that must met, red and green forms that must be filled in and the time that the whole process takes.
Western Australia
Western Australia is the dark horse in the field. Largely un-noticed, this mare is slowly but surely picking up speed and gaining momentum. This is in part due to a proposed change in rules about how oats are distributed around the stables but a steady inflow of royalties from previous outings is also helping.
Operation Queensland
So, from a Queensland perspective, what can be done to get her back in the race?
The obvious answer is to remove her ideological handicap and look to selectively recycle Queensland’s assets but shareholders in this horse are yet to be convinced of the merit of this approach and alternative trainers are unwilling to make the case for it in fear of not getting the chance to replace the incumbent.
Whilst industry should continue to vocally make the case for recycling it is likely to be off the table for at least a few more laps. Attention should therefore be turned to the following strategies:
More distance for less oats
By collaborating with the ground staff and officials, Queensland could get up to 30% more return for oats consumed. This collaboration could also result in Queensland becoming the smartest horse in the field, attracting far more investment from local, interstate and even international punters.
The State racing association is engaging with Queensland’s current trainer and there are promising signs of change but more needs to be done on both sides and everyone in the local industry has a part to play
Oats Creation
New infrastructure creates value for may different stakeholders. If it didn’t there would be no point in building it.
Many investors would happily build and share infrastructure to create value for themselves. Examples of this could include building a new light rail line in return for being given the rights to develop properties along the rail corridor.
Oats Capture
When a new piece of infrastructure is built by the State many stakeholders experience a significant windfall increase in the value of their adjoining assets for doing nothing at all. Some of this increase in value could be captured by the State to fund, at least in part, the cost of the infrastructure. A recent example of such an approach is the Cross Rail project in London where businesses that have benefited from the new underground line pay a Business Rate Supplement.
These are just some ideas but be in no doubt, Queensland needs to get creative in order to remain competitive.
The race that builds a nation never ends. It is a marathon not a sprint, a steeplechase rather than a straight gallop but the stakes couldn’t be higher.
Happy punting!