There is a hole in the bucket of your reasoning dear Henry. The biggest waste of recent time has been the dramatic expansion of the financial manipulation services provided by banking institutions and hedge funds etc.
We have accepted that government borrowing or deficit funding is wasteful and inflationary whereas debt creation by the financial institutions, running at 12-15% compound per annum for 15 years, is not. I have been writing occasionally to newspapers and governments and television stations for ten or so years pointing the dangers of that stupid policy. In that ridiculous process we have priced our children and grandchildren out of owning their own home in a reasonable time frame (at the age of 27 in 1957 I was able to start paying off a newly built full brick home with a loan for 25 years at 5%pa interest with Which bank).
Please read Keynes, Chapter 6, section V1 (General Thoery).
I agree major projects need long term planning so we always need a couple of worthwhile major projects in the pipeline ready to be accelerated when the economy shows signs of slowing. What we don't need is stupid manipulative or "taking in one another's washing" employment anytime.
A comment in a letter I wrote to Channel 9 Sunday program in 2001 follows and illustrates my view seven years ago.
"The recent inflation of asset values due to virtually uncontrolled credit expansion and the excessive savings of overpaid executives and professionals will eventually lead to severe upheavals in both the market and our social structure. George Soros’s concept of reflexivity is hard at work in the Sydney property market".

All too true, Henry, but you must surely be joking when you call for cost benefit analyses. Do you really think there are people in this country who know how to do them? Have a look at what happened to cost benefit analysis in the Murraylink major network addition between Victoria and South Australia in the National Electricity Market: for 6 years NEMMCO hawked around some numerical mumbo jumbo paraded as an ACCC regulatory test which could only require a cost benefit analysis and no-one, but no-one, including numerous economists, academic and other, and the ACCC itself, noticed that it was nonsense until it was finally referred to the National Electricity Tribunal. Thereby also hangs a tale of the strange relations between economics and the law. None of all the water projects trumpeted around have had a CBA, and nothing else either so far as I can tell. The engineers would have a fit having to pass the economic ruler over their prizes. A most effective and also a cheap way to improve public infrastructure administration and policy would be to require that all projects over some minimum have to have a prescribed CBA, and to set up educational programs for engineers and others to learn about it. But don't hold your breath!

Xenophon

Pro tem I'll repeat my recent reply to Fred Argy:

Another reason, Fred, is that state governments have an appalling record in backing wealth-destroying infrastructure projects - those that have returns (if any) less than their opportunity cost. You might recall that about ten years ago you correctly advised the Queensland government that most viable infrastructure opportunities were in SEQ, and that promoting growth in SEQ would boost regional economies more than the non-viable regional infrastructure projects which got about two-thirds of state infrastructure funding (because of the regions' economic linkages with SEQ). Your paper was, of course, buried, I was the only one to support it, and the state continues to back non-viable and poorly assessed projects.

There is very little understanding of or support for sound economic principles at state level, and the chance of counter-cyclical infrastructure spending being productive is very low. In addition, lead-time from the green light to starting work is very long. You suggest countering this by having a "stand-by" list of projects; but if they were worthwhile, how long could they be held on stand-by?

Any projects proposed by states for federal funding would have to be subject to rigorous independent scrutiny, perhaps by the Productivity Commission or by non-government analysts such as CIE.

Tranparency, accountability, honest commentary and a socially/publicly participatory democracy can and does allow for successful government infrastructure investment. PPP's also do so but without genuine FoI, our democracy isn't effective. The Tulla freeway is great but not if you want efficient transport to the airport or outer suburbs. A large scale solar project anyone? Not going to be done by business whilst carbon cost is an unresolved issue, yet what impact does carbon cost have on a govt? None. As for opining that money must be spent by govt to make money, I feel you are missing a vital point, namely that happier people produce more with less, or in immaterial terms, wealth ain't just about money. If we have constant, long term govt projects (refering to my first sentence), that are defined in policy (so we can vote on it), Australia could perhaps not be so reliant on the rest of the world to realise our wealth.
Oh yeah, Henry, mate, make a point that stands on it's own merits without demeriting yourself and others by being kind of blue? What a wonderful world it would be...

Building infrastructure is a good idea. It is the way we go about spending the money that is the problem. Instead of governments spending our money give it back to us and let us decide where to spend it. This can be done by giving us zero interest money that can only be spent in the market place of infrastructure.

The simplest one to start with is renewable energy. Give us some of the taxes we have paid on fuel and electricity but require us to spend it in the market place of infrastructure that will reduce greenhouse emissions.