Government to abolish Infrastructure Australia Council

THE Infrastructure Australia Council will be abolished to make way for a new chief executive officer and a board to advise the Commonwealth on Australia's most urgent national infrastructure needs.

Deputy Prime Minister Warren Truss today spoke on his bill to make major governance reforms to the national body.

The changes will mean the new body would work directly with state governments to identify the most important infrastructure needs, rather than simply relying on state governments to nominate the projects they want.

"Whilst it has delivered priority project lists, projects are derived from state and territory government project proposals and the prioritisation is based on the extent to which the project business case is advanced rather than the extent to which the project will contribute to improved national productivity," Mr Truss told parliament.

"Moreover, the current structure of Infrastructure Australia does not provide the degree of independence and transparency needed to provide the best advice to government about the infrastructure priorities that will reverse Australia's productivity slide."

It will also mean Mr Truss, as the infrastructure minister, will control appointments to the board.

While those already on the council may be offered a spot on the board, the government has not guaranteed all existing council members will be invited to sit on the new body.

But crucially, the new body will conduct five-yearly audits of all Australians infrastructure, and develop a 15-year plan for future projects, to begin next year.

Mr Truss said the 15-year plan will recommend projects "on the basis of a transparent and rigorous cost benefit assessment of their viability".

The new body, to be enshrined in new laws once they pass parliament, will also have to review every Commonwealth infrastructure project worth more than $100 million, except defence works, and publish the reasons behind its decisions.

Mr Truss said the new IA was part of the Abbott Government's regulation reduction agenda, with a renewed focus on "value for money" while ensuring the focus remained on "delivering critical infrastructure".