ABSTRACT
This chapter provides an overview of the question of public spending on infrastructure. Related to the issue of spending on public infrastructure is the issue of the application of public planning laws. Local and state governments in Australia as well as spending money on infrastructure are responsible for regulating land use, which can have important implications for the way in which infrastructure spending is conducted. In undertaking infrastructure projects the government needs to go through a fairly straightforward process. First, the government needs to identify what the specific need is and what the source of demand for the government programme is. The second part of the process is to identify what market failure exists and ascertain whether what is at issue is a concern for the distribution of income or the provision of a merit good. Cost–benefit analysis provides systematic set of procedures by which a firm or government can assess whether to undertake a project or programme.
