Record infrastructure spend the new normal, 2019 Australian Infrastructure Audit warns
19 August 2019
A
new wave of investment and reform is needed to ensure Australia’s
infrastructure continues to support our quality of life and economic
productivity over the next 15 years, according to the 2019
Australian Infrastructure Audit published today by
Infrastructure Australia, the nation’s independent infrastructure
advisor.
“Changing and growing demand, and a mounting maintenance
backlog is
putting unprecedented pressure on the infrastructure services each and
every Australian relies on. The current infrastructure program must do
more than plug the immediate funding gap, but instead deliver long-term
changes to the way we plan, fund and deliver infrastructure,” said
Infrastructure Australia Chair, Julieanne Alroe.
“Rather than a short-term boom, the historic level of activity we are
seeing in the sector must, and is likely, to continue for the next 15
years and potentially beyond. This must be the new normal if we are to
meet the challenges and opportunities ahead,” Ms Alroe said.
The 2019 Australian Infrastructure Audit presents a forward-looking view
of our infrastructure challenges and opportunities over the next 15
years and beyond. It is the second national Audit Infrastructure
Australia has undertaken, after the first was published in 2015, and
examines the infrastructure needs of the Australian community and
industry – covering the major infrastructure sectors of
energy,
transport,
telecommunications,
water – and for the first time,
social
infrastructure and
waste.
“Since the last Australian Infrastructure Audit we released in 2015,
Australia’s governments have made important progress to promote reform,
improve planning and address infrastructure gaps. More than $123 billion
of construction work has commenced since 2015, with a committed forward
pipeline of over $200 billion. However, there is much more to do to ease
the pressures of growth, catalyse development and enable our businesses
to compete on a global stage,” Ms Alroe said.
“The 2019 Audit finds that infrastructure in our four largest cities –
Sydney, Melbourne, Brisbane and Perth – is failing to keep pace with
rapid population growth, particularly on the urban fringe. With our
population projected to grow by 24% to reach 31.4 million by 2034, our
largest cities are expected to see pressure on access to infrastructure.
“The dominance of infill development in Sydney, Melbourne and Brisbane
will require investment in high capacity public transport, enhancements
to existing energy and water infrastructure, improved shared spaces and
a renewal of inner city health and education services.
“In contrast, the growing outer suburbs of the other major cities,
including Perth, where greenfield development will dominate, is are
expected to see pressure on their road networks, as well as expansion of
utility networks, new shared and recreation spaces as well as cultural
facilities.
“The costs of inaction are significant. If investment were to stop, the
cost of road congestion is projected to grow by $18.9 billion to $38.7
billion in 2031. This impacts quality of life, as well as our economic
productivity and competitiveness as a nation,” said Ms Alroe.
The 2019 Audit puts the community at the centre of infrastructure
planning, using user-focused measures of access, quality and cost, it
also highlights how service quality varies greatly for Australians
depending on where they live.
“Infrastructure quality is high in our urban centres, including our
smaller cities and regional centres. However unlike our larger cities,
there is often little choice of the types of services that people can
access. These centres are also growing as regional service hubs as
smaller towns shrink and people relocate to these larger centres. This
in turn places greater importance on high quality transport links,” said
Ms Alroe.
“Improvements in digital connectivity have helped, providing access to
new services like on demand transport and electric vehicles, while
improving access for people in regional areas through tele-health and
improved communications. However, we need to do more to ensure small
towns and regional communities also benefit from these advancements.
“Satellite cities – such as Wollongong, Newcastle, Geelong, the Sunshine
Coast and Gold Coast – benefit from high levels of infrastructure access
and quality as a result of their proximity to their larger neighbours.
While these cities have the capacity to support growth, additional
investment will be needed to ensure services are of an appropriate scale
to support increased population.
“Poorer access to infrastructure services in our remote communities is
reinforcing disadvantage. In many parts of the country, service
provision falls below what is acceptable for a highly developed nation,
including remote communities experiencing social housing overcrowding,
limited access to drinking water, inadequate transport and poor
telecommunications, which in turn translates to poorer health standards
and quality of life for their residents.
“For industry, well-targeted infrastructure investment is critical to
support international competitiveness. Our supply chains, and key inputs
like water and energy, are well understood products of infrastructure,
however the health and education of the workforce are highly dependent
on social infrastructure and subsequently so too is national
productivity,” Ms Alroe said.
New analysis of the Household Expenditure Survey conducted for the Audit
found the average household spent over $314 each week on infrastructure
in 2015/16 – or $16,000 annually.
“Australians earning the lowest 20% of incomes across the country spend
around a third of what they earn on infrastructure. This is above a
level that would be considered affordable.
“Australian’s perceptions of affordability are mixed, and often
perceptions do not align with actual service costs. While concerns about
rising energy prices are widely held, the proportion of household
incomes spent on energy is relatively low, 2-6%, in contrast to
transport which accounts for between 10-22%.
“Data on infrastructure affordability is poor and outdated, and more
needs to be done to provide transparency to the community on
infrastructure access and quality,” said Ms Alroe.
The 2019 Audit also finds that constant and rapid change is creating
challenges for the way we plan, design and deliver infrastructure.
“A clear challenge that emerges from the 2019 Audit is that our current
tools are not well placed to deal with many of the new infrastructure
problems we are facing in today’s rapidly changing environment. Our
population is growing and changing, the structure of the economy is
shifting, our communities and environment are experiencing weather
extremes, and rapid technology change is fundamentally reshaping our
day-to-day lives.
“Growing social, economic and environmental interdependencies have added
complexity to planning, delivering and operating our infrastructure.
“Projects across Australia are getting larger and increasingly complex,
and will require new approaches if they are to be effectively delivered.
So-called mega projects – projects larger than $1 billion in value – are
becoming the default, increasing the burden on the sector, and in some
cases exceeding industry capacity. If we are going to continue to be
productive and accommodate change, we need to grow industry skills and
capacity.
“The 2019 Audit finds that engagement with customers and the broader
community on project planning, needs to increase across most sectors and
jurisdictions. A failure to engage can carry substantial costs to
projects, and it is estimated that around $20 billion worth of
infrastructure projects was delayed, cancelled or mothballed due to
community opposition over the past decade.
“Better engagement with communities and businesses can help to establish
a social licence for projects as it provides an opportunity to
incorporate their feedback through project planning and delivery.
Establishing genuine community buy-in for need to reform must be a
priority for government and industry alike as we embark on a new era of
investment and reform to meet Australia’s changing and growing
infrastructure needs,” Ms Alroe said.
Consultation
Infrastructure Australia is calling for feedback and submissions in
response to 136 challenges and 44 opportunities identified in the 2019
Audit. Submissions will be open until 31 October 2019.
Submissions are accepted via the Infrastructure Australia website, and
will inform the approach and recommendations for reform identified in
the forthcoming Australian Infrastructure Plan. Submissions identifying
projects and initiatives for the 2020 Infrastructure Priority List are
also open until 31 August.
Australian Infrastructure Audit 2019, https://www.infrastructureaustralia.gov.au/publications/australian-infrastructure-audit-2019
--ENDS--
Source: Australian Government - www.infrastructureaustralia.gov.au
Contact: N/A
External Links: https://www.infrastructureaustralia.gov.au/publications/australian-infrastructure-audit-2019
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