Queensland Report - December 2009

Building Our Future report update.
In 2004 the Civil Engineering Construction Alliance (CECA) released the original Building Our Future report. It was a groundbreaking analysis of infrastructure funding in Queensland and documented a 20 year decline in infrastructure spending to 2004 and highlighted the immediate need to rapidly increase expenditure on key economic infrastructure in the state.
In 2009, five years after the release of the original report, many of the participants of CECA felt that it was time to get an independent measure of the changes that had taken place since 2004.
Clearly expenditure has increased, but it was not clear whether or not the levels were in line with the 2004 recommendations, not was it clear what a sustainable long-term expenditure level might be. These organisations formed the Queensland Civil Infrastructure Alliance (QCIA) to collectively fund this independent research.
Given the recent significant impacts of the global financial crisis on the industry in total, the group considered it important to closely examine the next 3 to 5 year time horizon, to ensure that the government was investing in a way that supported the industry over the long-term.
The Alliance is made up of the CCF, the Queensland Major Contractors Association, Infrastructure Association of Queensland, Engineers Australia and the Australian Asphalt Pavement Association.
Recent investment, reducing the backlog
Analysis undertaken for the 2009 update shows a dramatic increase in public infrastructure investment in Queensland from June 2004 in absolute terms and relative to other states. This suggests that the messages highlighted by the 2004 Building our Future report, were consistent with assessed backlogs, and anticipated subsequent policy decisions of the state government. In Queensland, gross fixed capital formation by the public sector increased from 4.2% of gross state product in June 2004 to 8.2% by June 2008. 
However, this recent upswing in infrastructure funding, has not eliminated the backlog in infrastructure resulting from some 20 years of inadequate investment. At least another five years of the current relatively high level of capital expenditure, is considered necessary to achieve more acceptable levels of service, in terms of key economic infrastructure.
 

Investment over next 3-5 years
With a construction industry geared up to deliver the current magnitude of work, reductions in the funding commitment for these types of infrastructure, would have significant impacts on employment. While ongoing expenditure on infrastructure is expected to be maintained at relatively high levels, expenditure is likely to peak in the next 12 to 18 months.
It is estimated that the reduced levels of public capital expenditure forecast beyond 2010, could result in the loss of up to 30,000 jobs in the construction sector, and 60,000 jobs state-wide when multiplier effects are considered. The return of major private sector investment in infrastructure to fill this gap is uncertain.
The need to maintain jobs and retain the skills and capacity developed by the construction industry in recent years, is also an important consideration, in seeking to maintain the current level of capital investment in Queensland.
 

Sustainable long-term investment
Analysis has show that capital outlays need to be maintained over the long-term at around 7% of gross state product. It is considered that a reasonable level of infrastructure service, capable of meeting the needs of the continuing economic and population growth, could be achieved with this level of investment.
The graph below illustrates the dramatic increase in the “gap” in the early 2000 period and shows that the infrastructure backlog has not been addressed even with recent high levels of investment. 
 

In summary it is important to emphasise that there is still a long way to go in bringing our economic infrastructure to a desirable standard, even though substantial new investment has taken place over the past five years. The job is still far from finished!
New planning policy will impact on erosion, sediment control
A new state planning policy under the Integrated Planning Act (IPA), will further regulate all sectors of the development industry, in an attempt to improve the condition of Queensland waterways. This is just one of many avenues the Queensland government is introducing, in an effort to halt the declining health of the creeks, rivers and estuaries, highlighted in the recently released report card on the health of SEQ waterways and catchments, where scores deteriorated in many catchments over the last year.
Best practice guidelines have also been prepared to underpin implementation at all stages from design and assessment to construction and long term operation. 
The State Planning Policy for Healthy Waters introduces a new development assessment code under the IPA, for activities covering >2500m2 or more than six dwellings. Greater emphasis will be placed on environmentally sensitive development, in order to achieve water quality objectives, by requiring “development to suit the landscape”.
DAs will require an accompanying urban stormwater management plan, along with in most instances, an erosion and sediment control plan for the construction phase. However, there is no clear path for amendment of these plans, leaving civil contractors in a compromised position over compliance, if EPA regulations and water quality objectives are not achieved by implementing the approved plan during construction.
Also of concern to the civil industry, is the substantial increase in design objectives, including temporary drainage systems to carry 1:10 year rainfall events. This has major implications in terms of cost and space to locate these structures and sediment basins which are required for any developments over 1ha or where > 150t of soil movement is likely to occur. This is even more difficult in linear construction projects. 
Issues related to transitioning between stages have not been addressed, nor has transparency in cost sharing, leaving many contractors concerned they will be the ones paying for the increased cost of these changes.
The CCF has held discussions with the Department of Environment and Resource Management, and made a submission regarding these proposed new regulations, in an attempt to bring these matters to the government’s attention.
We anticipate further discussions in February 2010, before the anticipated introduction of the policy in mid 2010. Amongst other recommendations, CCF has proposed that a risk assessment process, which mirrors the WH&S legislation, be incorporated into erosion and sediment control management.
Ombudsman investigates traffic control
In June 2009 a report was released following a 6 month investigation into Queensland’s contract traffic control industry.
The Workplace Rights Ombudsman started the investigation focusing on a number of key areas including compliance with industrial laws, measures to discourage inappropriate activities and provision of information to relevant persons to assist with informed decision making to achieve fairer workplaces. 
The report contained a number of wide ranging recommendations that had the potential to involve various government departments and external agencies.
To consider the number of issues that arose, the ombudsman recommended the formation of a reference group. The Attorney General and Minister for Industrial Relations established the reference group as a task force. It has been meeting.
One of the key industrial changes proposed, is that from 1 January 2010, the Building and Construction General On-site Award will cover the employment of road traffic controllers.
Other discussions the CCF continue to be involved with, include improving safety, reviewing training for traffic controllers and developing training for supervisors responsible for traffic controllers.