Ongoing Major Investment in Infrastructure Spending Needed

Tuesday, August 13th, 2019

Australia needs to commit to spending $200 billion every five years on a range of infrastructure projects if it wants to keep pace with population growth.

Infrastructure Australia has warned a new wave of investment is needed to ensure roads and public transport, schools, water, electricity and health services support people’s quality of life and economic productivity.

But Trade Minister Simon Birmingham has stressed the government is already spending record amounts on infrastructure and doesn’t have a “limitless bucket” of cash to draw upon.

The most visible example of the impact of poor infrastructure is the increasingly congested roads and crowded public transport in our biggest cities, the 2019 Australian Infrastructure Audit published on Tuesday says.

At the moment, this congestion costs the economy $19 billion a year, but if no more is spent on upgrades, that will double to nearly $40 billion by 2031.

Less visible, but just as frustrating to people, are hospitals and schools that are ageing or reaching capacity, overcrowded parks and city green spaces, ageing water pipes, and the quality of services like the NBN.

Infrastructure costs households $314 a week on average.

While people think power bills are the most expensive cost of living – since they were the fastest growing over recent years – in fact, car running costs take up $205 of this.

Phones and internet cost households $45 a week, power $41 and water $23.

Senator Birmingham says the government considers how it can invest in infrastructure every time it prepares the federal budget, but already has $100 billion in spending in the works.

“This is about being as responsive as we can, but also being responsible with taxpayers’ money,” he told ABC TV on Tuesday.

“We don’t have a limitless bucket for investment, but we have surged the amount of investment that’s occurring.

“We will keep looking for those sensible investment opportunities to deal with congestion and to deliver the infrastructure needs of the future.”

As well as the new investment needed, Infrastructure Australia warns of a mounting maintenance backlog, much of which is unquantified.

“The infrastructure program must do more than plug the immediate funding gap,” Infrastructure Australia chief executive Romily Madew told reporters.

“It needs to deliver long-term changes to the way we plan, fund and deliver infrastructure. This must be the new normal if we are to meet the challenges and opportunities ahead.”

Planning problems have occurred because population projections have traditionally been based on past growth areas, whereas actual growth has been faster and in different areas than anticipated.

Ms Madew said the dominance of the urban fringe has ended.

She cited Canberra’s experience where the long-time balance of 60 per cent of the population living in outer suburbs and 40 per cent in the inner areas is now changing.

That said, infrastructure in the outer suburbs of Australia’s cities still needs major investment.

One example is the uneven access to public transport, with 56 per cent of people living in outer suburban areas unable to walk to public transport, compared to four per cent of those in the inner city.

Infrastructure Australia’s policy and research director Peter Colacino put much of the change down to the effect of the large “millennial” generation, which will make up three-quarters of the workforce by 2025.

“Millennials have different expectations in terms of … work-life balance, flexible work hours, owning a vehicle, the opportunity to work from home,” he said.

But on the whole, he said public transport access was improving, the quality was quite good, and affordability has improved for most Australians.

The key challenge was getting the proper investment required.

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