Infrastructure Australia Audit Framework:
Stage
1. Goal definition
2. Problem identification[1]
3. Problem assessment
4. Problem analysis
5. Option generation
6. Solution assessment
7. Solution prioritisation[2]
Description Components required Rationale
Definition of the fundamental economic, environmental and social goals • Formalised, comprehensive, and agreed
A performance benchmark is
that society seeks to achieve, for example: sustained economic growth goals/targets. needed against which the
and increased productivity, lower carbon emissions and lower local adequacy of infrastructure can
• Quantified, objective and specific goals/targets.
pollution, greater social amenity and improved quality of life. be assessed.
• A list of specific problems clearly identified,
Objective, specific, evidence-based, and data rich identification of including network or geographical location. Specificity re inadequacies is
deficiencies with the condition, operation and services provided by essential in order to take
infrastructure that may hinder the achievement of those economic, • Those problems accurately quantified and
targeted and therefore more
environmental and social goals. defined, including an assessment of future effective action.
trends.
• Accurate and objective assessment of the Understanding the
Objective and quantified appraisal of the economic, environmental and econ/envt/soc impacts of those problems. costs/impact of deficiencies
social costs of those deficiencies, so that the most damaging
• Priorities identified which reflect the scale of allows the worst problems to
deficiencies can be identified and prioritised.
impacts. be identified and prioritised.
Objective policy and economic analysis of why these deficiencies exist – • For each deficiency, analysis of why those Understanding the causes
i.e. what is the underlying cause (depending on the sector, reasons problems have developed allows effective and targeted
could include market failure, government failure, capital restrictions,
etc.). This should include an assessment of non-infrastructure reasons • Covers both immediate and underlying causes solutions to be created.
(e.g. not just ‘lack of investment’, but causes of Infrastructure not the only
for the problem – e.g. land use patterns, peaky demand; or
underinvestment, e.g. regulatory environment). cause of problems.
education/business hours.
• A full range of option types have been
identified for each deficiency/problem. Looking at a range of options
Development of a full range of interventions that might address the issue
rather than relying on early
- e.g. pricing, regulatory, better use, packages/systems, capacity • Those options have been objectively
judgements is more likely to
increases, informed by the Problem Analysis completed at Stage 4. assessed, without some options having been identify the best solutions.
ruled out early or favoured.
Use of cost-benefit analysis to assess those options/solutions. The • Accurate and justifiable Cost-Benefit Analysis
An understanding of the
appraisal should incorporate the full range of economic, environmental has been used to appraise options. impact of solutions on all goals
and social impacts (including agglomeration and trade impacts, carbon
• CBA is comprehensive and includes wider
is essential to understand how
impacts, noise, and social amenity) so that the impact on all society’s the portfolio will achieve those
goals is measured and understood as far as is possible. economic, environmental and social impacts. goals.
• Priority List clearly identified.
Identification of policy and project priorities from the list of solutions, on BCRs provide the best
• Priorities reflect primacy of BCR analysis
an objective basis. The objective basis should give primacy to the available objective evidence
alongside objective framework
Benefit-Cost Ratio (BCR) of policies, but could include broader as to how well solutions will
considerations set out in a transparent framework - such as • Relationship to State-funded policies/projects impact on goals – but not the
portfolio/package issues, deliverability, risk, and affordability. clear – i.e. prioritisation reflects all ideas, not just whole story.
July 2008
the unfunded. Slide 1