1. Construction Materials Industry Conference Delivering Australia’s Pipeline Jennifer Westacott 20 September 2012 1

2. Overview of presentation Key growth challenge – pipeline or pipe dream? Australia’s investment opportunity Australia’s project performance Challenges and solutions COAG and BCA reviews 2

3. Australia’s Investment Opportunity 3

4. The project pipeline 4 Source: Deloitte Access Economics. Australia’s $921b Investment pipeline – projects by status Under Committed, $66 Under consideration $192b Possible $279b Under construction $384b Committed $66b

5. Pipeline facts 5 Projects unprecedented in size Projects unprecedented in number Remoteness Narrow sector base

6. This matters 6 Source: Deloitte Access Economics using real investment and GDP data. Investment and exports as a percentage of GDP, Australia 10 15 20 25 30 35 10 15 20 25 30 35 1991-921996-972001-022006-072011-122016-172021-22 Investment (total) Exports Per cent of GDP Projections

7. Risks to delivery 7 Pipeline delivery risks Revenue risk Cost and time blowouts Missed opportunities due to project deferral or abandonment

8. Australia’s Project Performance 8

9. Critical question How well do we deliver projects? 9

10. Data on project performance 10 Note: cost premium is calculated in US dollars Source: Resources projects data by Independent Project Analysis; other data from Turner & Townsend, International Construction Costs Survey 2012. Note: Turner & Townsend sourced costs are US dollar relativities per m 2. 40% 26% 43% 62% 90% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Resources projects SchoolsLarge shopping centres HospitalsAirports Cost premium

11. How do we perform? Project performance Lack of robust data for infrastructure projects Need to understand cost drivers Better measurement can help lift performance Warnings in global project data 11

12. Challenges and Solutions 12

13. Barriers to project delivery 13 Community concerns Capacity constraints Efficiency problems Timely funding and delivery of public infrastructure Investor confidence

14. Solutions 14 1.Build higher levels of community understanding and acceptance for projects 2.Expand Australia’s capacity to deliver multiple capital projects

15. Solutions 15 3.Improve the efficiency of project delivery in Australia 4.Adequate provision of economic and social infrastructure

16. Solutions 16 5.Build the confidence of investors 6.Supportive government institutions, policies and programs

17. BCA and COAG reviews 17

18. BCA/COAG reviews 18 What’s next COAG review of construction costs BCA review of project costs

19. The four steps to recovery Commonwealth to amend EPBC Act – give states authority to assess/approve projects State governments to fast-track major development approvals Amend Fair Work Act – include employer-only agreements on greenfield projects so work can start sooner Cease tinkering with the tax system 19