Record infrastructure spending has become the new normal, the annual 2019 Australian Infrastructure Audit warns.
Independent advisor Infrastructure Australia, which published the audit, said that a new wave of investment and reform is needed to ensure infrastructure continues to support the country’s quality of life and economic productivity over the next 15 years.
“Changing and growing demand, and a mounting maintenance backlog is putting unprecedented pressure on the infrastructure services each and every Australian relies on,” said Infrastructure Australia chair Julieanne Alroe. “The current infrastructure programme must do more than plug the immediate funding gap, but instead deliver long-term changes to the way we plan, fund and deliver infrastructure.”
She added: “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.”
The 2019 Australian Infrastructure Audit looks at challenges and opportunities over the next 15 years and beyond. It is the second national Audit Infrastructure Australia has undertaken - 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,” said Alroe. “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.”
The 2019 Audit finds that infrastructure in the 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,” she said.
“The costs of inaction are significant,” said Alroe. “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.”
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.
In response to the audit, Australia’s Civil Contractors Federation (CCF) has repeated its call for urgent action to stimulate the Australian economy by increasing the infrastructure spend. It is urging the federal government to adopt a three-point plan: to use debt funding to roll out an increased volume of infrastructure projects over the next 10-15 years to stimulate the economy; launch and fund a nationwide skills campaign and training agenda; and cut red tape on the ‘extractive sector’ to ensure a sufficient supply of raw materials.
Investment in transport infrastructure will help bridge the troubled waters of a declining housing market and softening commercial construction sector but there is zero doubt that more needs to be done to fast-track construction activity and ignite economic growth.
Master Builders Australia also responded to the report. “The latest industry forecast predicts that the government’s ramping up of investment in transport infrastructure will drive up the volume of civil construction work from $92.42 billion in 2019 to nearly $104 billion in 2022,” said CEO Denita Wawn. “This $92.6 billion increase will kick the volume of civil construction work up by 12.5 per cent over the next couple of years and this is obviously good news for our industry, the economy and the community,” she said. “We are hopeful that investment in urban infrastructure, including projects encompassed in the Government’s Cities Deals, will help to unlock new housing supply and moderate falls in the residential building sector which is forecast to be down 28 per cent from its peak by 2020/21. “So while we commend and support the Government’s infrastructure agenda there is no doubt more needs to be done.”