Inland Rail axed, but Labor's pet railway projects are set to squander billions more

Car and bus are the dominant modes of transport between Canberra and Sydney, and spending $100 million reducing the rail journey to four hours probably won't make much difference to patronage. There are no readily available data on the rail line's financial performance, but it almost certainly incurs large losses.

Deciding what to do with Australia's railway network has always been a dilemma. Australia's inheritance was of an extensive network of slow railways of several different gauges in need of modernisation. Many little-used lines have been closed over past decades, though on the other hand bulk rail freight has been vital to our mining and grains industries. Lines like the Trans-Australian Railway , completed in 1917, also still carry a lot of freight between major centres.

While I am opposed to waste, it is also obvious that rail has an important role to play both in alleviating urban congestion and taking large trucks off key interstate roads. There is merit in creating a viable Sydney to Melbourne freight rail service that would reduce the number of heavy trucks using the Hume Highway. Following the Inland Rail debacle this won't happen anytime soon.

Lessons from the past include the need to conduct rigorous independent cost-benefit assessments before undertaking major infrastructure projects, and (more importantly) to act on the findings. To this end, Infrastructure Australia should be given a more powerful role and be further removed from political influence.

A second priority should be to bring an end to "off budget" accounting by governments. Accounting standards prevent such practices in the corporate sector, but these standards do not apply to government. University of Wollongong professor Brendan Lyon said that governments should not be allowed to hide bad policy behind dodgy accounting.

The government has special accounting standards that allow public money to be spent 'off-budget', with assets then reported at an estimated 'fair value', not their cost". "The accounting standards for government require attention because they've removed political accountability for risky public expenditures and obscured the costs of policy and project failure.

Ultimate responsibility for the horrendous multi-billion-dollar waste in infrastructure projects lies with politicians and the voters that elect them. There is, for example, a widespread lack of appreciation of what a large amount of money a billion dollars (for example) is, but most of all there is general ambivalence to the waste of public money. There should be widespread outrage when a huge amount of money is wasted but in practice this never eventuates. Once their money is taken in taxes or via increased public debt, the public generally ceases to care.

It is widely appreciated by the experts that both the Suburban Rail Loop and the Very Fast Train are uneconomic and absolutely should not be built. Despite this, vast amounts of public money look like being wasted on these projects.