The Economic Society of Australia recently polled a number of senior economists on its National Economic Panel, posing the following question:
“As interest rates are at low levels by historical standards, federal and state governments, despite their public debt levels, should be borrowing more than they currently are to invest in infrastructure”.
Just over 70% of respondents either agree or strongly agree, and on a confidence-weighted basis, 75% agree or strongly agree. This is a rare consensus.
It is worth reading the individual responses. This strong consensus is backed by a requirement for solid cost-benefit analysis, case-by-case consideration of projects and a recognition that any infrastructure spending is not automatically a ‘good thing’.
Do you think we should increase public debt now to invest in infrastructure?
Very pleased to see PNG and Australia have signed an Agency Support Arrangement for the PNG Department of Transport this month. I led an earlier Agency Capacity Diagnostic of the Department for the PNG Transport Sector Support Program.
“These diagnostics are undertaken by independent consultants and provide the agency management with objective assessments of capacity, including through the identification of existing strengths and skills gaps. The diagnostics also provide recommendations for addressing agency needs. TSSP then works closely with the Australian High Commission and agency heads to develop programs of structured capacity support to improve performance and address identified priority capacity gaps. This is formalised through Agency Support Arrangements (ASAs) which detail the multi-year frameworks for funded activities to bridge some of the gaps highlighted by the diagnostics.” (Source: TSSP website)
A great outcome which also included a lot of hard work from senior officers in the Department, the Transport Sector Support Program and at the Australian High Commission.
[Link to article]
A great collaboration with the Department of Transport and Main Roads and Aurecon.
Lytton Advisory prepared cost benefit analysis modelling of this active transport infrastructure program for TMR, drawing on great research and analysis undertaken by the project team.
Queenslanders will continue to benefit from TMR’s engagement in developing further active transport infrastructure.
Many thanks to all who contributed to this.
Quality versus cost, speed of measurement versus accuracy of measurement, planning time versus build time, lightness versus strength. It is impossible to maximise the response to every factor in an economic analysis. Good economics is neither maximisation of every consideration nor even compromise among them; it is optmisation among options.
Accuracy is the absence of error; precision is the level of detail. Effective economic problem solving requires being accurate; but only being as precise as is helpful at any given stage of problem solving. In the pre-feasibility phase of a project, accurate but imprecise methods, rather than very exact methods will all consideration of all reasonable economic approaches. It will also minimise the tracking of needlessly detailed economic data.
Economics is a field where there is a wide range of specialties, and economists are often called on to look at specific issues. Don’t get distracted by all the other possibilities to the extent that you forget to do the one thing that you must do. But don’t become so focused on the one thing that you don’t do as much as you can.
Very pleased to see that my colleagues at Queensland Department of Transport and Main Roads and Aurecon will be presenting our analysis on the economic benefits of cycling infrastructure at the National Traffic and Transport Conference of AITPM in mid-August. The abstract is available here:
Image: Southbank, Brisbane. Source: Brisbane Tourism.