Australia

$40 billion a year needed for infrastructure to catch up with our population growth

Traffic coming in and out of the central business district in Brisbane Source: AAP

Infrastructure Australia has warned a new wave of investment and planning reform is needed for the nation to keep pace with population and economic growth.

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.

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.

Commuters are seen in Town Hall station during peak hour in Sydney, Tuesday, August 7, 2018. Australia's population is expected to hit 25 million on Tuesday evening. (AAP Image/Erik Anderson) NO ARCHIVING
Infrastructure Australia is warning the cost of congestion will double if the government does not increase investment.
AAP

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.

The report notes that migration is a key driver of Australia's above average population growth. 

In a "congestion-busting" effort, the government reduced the cap on migration from 190,000 to 160,000 ahead of the May election.

Despite the cut in permanent migrants, population projections contained in the April budget show the government expects overseas arrivals to rise even faster than previously predicted due to a surge in temporary migrants. 

Cost to households

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.

The Melbourne city skyline and shipping docks are seen from Yarraville, Melbourne, Sunday June 2, 2019. The Australian Bureau of Statistics will release the quarterly balance of payments on Tuesday, June 4, 2019.  (AAP Image/Ellen Smith) NO ARCHIVING
Infrastructure Australia says the historic level of construction activity should be the "new normal".
AAP

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.

Population and Infrastructure Minister Alan Tudge said there was no doubt that congestion was an issue in capital cities. 

"This is why this Government has cut the migration rate, massively invested in congestion busting infrastructure and put in plan in place for Australia’s future population."

He said the modelling did not take into account the government's 10-year plan to invest $100 billion in infrastructure. 

Minister for Human Services Alan Tudge at a press conference at Parliament House in Canberra, Thursday, May 11, 2017. (AAP Image/Mick Tsikas) NO ARCHIVING
Alan Tudge says the government is addressing infrastructure needs.
AAP Image/Mick Tsikas

Population and Infrastructure Minister Alan Tudge said there was no doubt that congestion was an issue in capital cities. 

"This is why this Government has cut the migration rate, massively invested in congestion busting infrastructure and put in plan in place for Australia’s future population."

He said the modelling did not take into account the government's 10-year plan to invest $100 billion in infrastructure. 

Brake on urban sprawl

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 our 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.

"As you have the transition from baby boomers to millennials and subsequent generations, where people live and how they work is changing."

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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