Three Changes That Could Save Billions in Wasted Transport Spending

Key Takeaways

• Poor transport decision-making wastes billions in public funds, with the worst decisions often made during election periods when political expediency trumps proper analysis.
• The public and many political leaders lack an understanding of modern transport principles, such as induced demand, which leads to support for ineffective solutions.
• Three governance reforms could significantly improve outcomes:

1. Create Truly Independent Infrastructure Assessment Bodies. This independence would allow agencies to speak truth to power without fear of political consequences.
2. Mandate Transparent, Timely Scrutiny of All Major Proposals. This transparency would create powerful incentives for better proposals.
3. Build Transport Literacy Through Proactive Education of politicians and the public on evidence-based transport solutions.

• Similar governance models have proven effective in budget oversight and could yield substantial returns by preventing even one poorly conceived major transport project.

What Next?

Let me know what you think of these ideas. What are their strengths and weaknesses? What else should we be doing to get better transport decisions?

Introduction

Billions of taxpayer dollars are wasted each year on ineffective transport projects and policies that do little to improve our communities and often make them worse. Why does this happen? Consider these two contrasting scenarios from Australia's recent past:

Scenario 1 - A senior advisor to the transport minister contacts the department's head of transport planning three years before an election, seeking advice on potential future transport projects. The goal: to develop thoroughly analysed, costed proposals ready for election commitments based on expert input and thorough planning.

Scenario 2 - Political advisors to a state leader hastily design an expensive rail project, placing new stations in key marginal electorates. The project emerges with minimal analysis, insufficient costings, and no expert evaluation before being announced as a flagship election commitment.

The first scenario represents the origins of Sydney's Metro West project, now under construction and on track to serve communities in the early 2030s. I was that senior advisor.

The second scenario describes Victoria's Suburban Rail Loop (SRL), a project now facing severe challenges: budget blowouts, potential cancellation by the opposition, affordability concerns, and criticism from Infrastructure Australia.

As Australia approaches another election cycle, we're seeing far more "Scenario 2" thinking than "Scenario 1" in transport proposals. Politicians are announcing eye-catching but poorly conceived projects and policies that will likely waste tens, perhaps hundreds, of billions of dollars with minimal public benefit.

This pattern repeats across the world, with governments consistently making transport decisions that prioritise political appeal over effectiveness. The cost is staggering: just preventing one ill-conceived $100+ million project would represent an extraordinary return on investment. The question is: how can we systematically improve transport decision-making to avoid this waste?

The Perfect Storm: Five Factors Driving Poor Transport Decisions

Problem 1 - Public Misconceptions About Transport Solutions

Most of the public does not understand modern transport principles, creating pressure for ineffective solutions, such as road widening, despite the evidence that this induces additional traffic. This knowledge gap leads to public support for projects that worsen the problems they aim to solve, creating political pressure for counterproductive investments.

Problem 2 - Limited Transport Expertise Among Decision-Makers

Political leaders often operate with an outdated or incomplete understanding of transport principles. This knowledge deficit is particularly acute for opposition parties and backbenchers who lack access to departmental expertise.

Problem 3 - Declining Scrutiny and Transparency

Critical project assessments like business cases are frequently withheld or heavily redacted, preventing proper public examination. Meanwhile, the decline of specialised policy journalism means fewer reporters have the expertise or resources to critically examine transport proposals, allowing dubious claims to go unchallenged.

Problem 4 - Inaccessible Evidence on Effective Solutions

While abundant research exists on transport policy effectiveness, this knowledge remains largely trapped in academic journals and technical reports. Without practical toolkits that rank interventions by cost-effectiveness and evidence strength, decision-makers default to what sounds good rather than what works best.

Problem 5 - Strategic Misrepresentation by Transport Agencies

Even transport departments aren't immune to these problems. Academic research has consistently documented what Professor Bent Flyvbjerg calls "strategic misrepresentation", the systematic underestimation of costs and overestimation of benefits to secure project approval. This is a key reason why project costs blow out, utilisation falls short of predictions and timelines are hopelessly optimistic.

These five interrelated problems create a system almost perfectly designed to produce poor transport decisions. The good news? We can dramatically improve outcomes by addressing these challenges without removing democratic control of significant infrastructure investments.

Beyond Transport: Governance Models That Actually Work

Rather than reinventing the wheel, we can draw valuable lessons from policy areas that have successfully addressed similar transparency challenges, political pressure, and evidence-based decision-making.

Some might argue we should simply hand transport decisions to technocrats, removing political influence entirely. I disagree. Allocating billions in public funds is fundamentally a democratic responsibility, and besides, technocrats themselves are not immune to bias and strategic misrepresentation. The answer lies in better governance, not in abandoning democratic oversight.

Fiscal Accountability Models

The most promising parallels come from independent budget oversight bodies that have transformed fiscal policy discussions:

• The Congressional Budget Office (CBO) in the United States provides nonpartisan analysis of budgetary and economic issues, serving all lawmakers equally.
• The Office for Budget Responsibility (OBR) in the UK produces independent forecasts and scrutinises fiscal policy proposals. Its independence from Treasury has measurably improved forecast accuracy and reduced politically motivated fiscal projections.
• Australia's Parliamentary Budget Office (PBO) provides confidential policy costing to all parliamentarians and releases public analysis of budget measures.

These institutions all function differently. However, pulling out the most relevant part of each institution, the critical features worth emulating are:

1. Structural independence from the executive branch, providing insulation from political pressure to manipulate findings
2. Service to all elected officials, not just the governing party, ensuring opposition gets access to advice and scrutiny of their proposals.
3. Public education functions through accessible reports that build a broader understanding of complex policy issues
4. Election-period assessment of competing proposals, when scrutiny is most needed but often most lacking

Evidence Translation Models

Beyond fiscal accountability, we can learn from organisations that effectively bridge research and practice:

The UK's Education Endowment Foundation has revolutionised education policy through its Teaching and Learning Toolkit, a practical resource that ranks interventions by cost, evidence quality, and impact size. This approach makes complex research readily accessible to decision-makers:

Similarly, the What Works Centre for Local Economic Growth evaluates economic development interventions, allowing policymakers to quickly identify which approaches have the strongest empirical support.

These evidence translation bodies demonstrate that complex policy areas can benefit from systematic approaches to ranking interventions and communicating effectiveness in straightforward terms, exactly what transport policy currently lacks.

By adapting these proven governance models to transport planning, we can maintain democratic control while dramatically improving the quality of decisions and the effectiveness of public investment.

Breaking the Cycle: Three Reforms to Transform Transport Governance

Drawing from successful models in other policy domains, I propose three interconnected reforms that could fundamentally reshape transport decision-making while preserving democratic accountability.

Reform 1: Create Truly Independent Infrastructure Assessment Bodies

Independent infrastructure agencies must be established with:

• Direct reporting to parliament rather than to ministers
• Leadership appointed through cross-partisan processes with fixed terms
• Statutory independence similar to auditors-general
• Dedicated funding that cannot be reduced in retaliation for unfavourable findings
• Explicit mandate to serve all elected officials, not just the executive

This independence would allow agencies to speak truth to power without fear of political consequences.

Reform 2: Mandate Transparent, Timely Scrutiny of All Major Proposals

These independent agencies should be tasked with:

• Public assessment of all transport proposals exceeding $100 million
• Standardised evaluation frameworks for projects and policies.
• Publication of complete business cases with minimal redaction
• Rigorous pre-election analysis of all parties' transport platforms
• Ongoing monitoring and public reporting on project performance versus projections

This transparency would create powerful incentives for better proposals.

Reform 3: Build Transport Literacy Through Proactive Education

Independent infrastructure agencies should be mandated to:

• Develop accessible resources explaining transport principles (like induced demand)
• Create an evidence toolkit ranking interventions by cost-effectiveness
• Provide confidential technical briefings to all elected officials
• Deliver regular public reports on transport system performance
• Conduct ongoing public education campaigns on key transport concepts

When implemented together, these three reforms would create better public understanding, leading to better political proposals, which face rigorous assessment, driving improvement in transport decision-making.

Conclusion: The Path Forward

The cost of poor transport decisions isn't just measured in dollars wasted, but in higher congestion and emissions, and worse outcomes for communities.

The three reforms I've outlined, independent infrastructure agencies, mandatory transparent assessment, and proactive education, represent a practical path to dramatically improve outcomes. These changes would preserve democratic control while ensuring decisions are informed by evidence rather than political expediency.

Some will argue these reforms are too difficult or that politics will always dominate infrastructure decisions. However, the examples from budget oversight bodies show that institutional improvements are possible and effective.

The return on investment is compelling: if these reforms prevented just one misguided mega-project, they would pay for themselves many times over. More importantly, they would redirect billions toward solutions that actually work.

As countries contemplate massive transport investments in the coming decades, the stakes could not be higher. We face choices about decarbonisation, technology integration, and urban form that will shape our cities for generations. We simply cannot afford to continue to make so many poor decisions.

The question is not whether we can afford to reform transport governance, but whether we can afford not to. What do you think? I welcome your thoughts on these proposals, their strengths and weaknesses, and what other approaches might lead to better transport decisions.

Let the conversation begin—because billions of dollars and the future of our transport systems depend on getting this right.
​

Subscribe to the Transport Leader Blog and Newsletter