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Infrastructure Australia’s Jekyll and Hyde 2019 Infrastructure Audit

Infrastructure Australia has released its second national audit and like its predecessor in 2015, the 2019 Audit is intended to guide the next wave of infrastructure reform in Australia.

The 2019 Audit covers transport, energy, water, telecommunications and – for the first time – social infrastructure.  It looks at both the major challenges and opportunities facing Australia’s infrastructure over the next 15 years and accordingly can be likened to Dr Jeckel and Mr Hyde.

Infrastructure is fundamental to our quality of life. It connects us to jobs and enables the economy to function. However, too often our infrastructure doesn’t meet these needs. Congestion, crowding, rising costs, outages and declining service standards can undermine these core roles. The Audit confirms more must be done if we are to maintain, let alone enhance, our quality of life and economic efficiency.

Australia’s infrastructure faces a range of challenges– vast distances, extreme weather, increasing maintenance backlogs, rapidly growing cities coupled with below OECD average for infrastructure investment. Key points from the Audit include:

  1. Since 2015 over $123 billion of work has commenced, with a committed forward pipeline of over $200 billion.
  2. However, changing and growing demand, and a mounting maintenance backlog, mean a new wave of reform and investment is necessary to ensure quality of life and economic productivity are enhanced over the next 15 years. By 2034, Australia’s population is projected to grow by 23.7% to reach 31.4 million, adding to infrastructure demand, while existing infrastructure struggles under maintenance backlogs and the condition of many assets is unknown.
  3. Constant and rapid change is creating challenges for the way we plan, deliver and operate infrastructure. For example, the sharing economy has rapidly grown across infrastructure sectors, particularly the transport sector where the use of ridesharing services have more than tripled between 2015 and 2018.
  4. Growing social, economic and environmental interdependencies have added both complexity and opportunity to the planning, delivery and operation of our infrastructure. For example, the increased uptake of electric vehicles will have implications for the energy sector. By 2040 40% of our vehicles are likely to be electric.
  5. Infrastructure is facilitating structural changes to the Australian economy, as we shift away from traditional industries, such as manufacturing, towards knowledge and service-based industries.
  6. Australia’s national productivity and global competitiveness rely on efficient infrastructure networks, however we are falling behind international competitors. Australia currently ranks 18th in the world for ease of doing business, having dropped over the past decade from 9th.
  7. Population growth impacts are being felt in fast- growing cities as infrastructure is placed under pressure, including congestion on our roads and crowding on public transport. 77% of population growth over the coming 15 years is projected to occur in our fast-growing cities (Sydney, Melbourne and Brisbane), leading to pressure including road congestion growing by $18.9 billion to $38.8 billion in 2031.
  8. People live in diverse areas across Australia (and Queensland), from fast-growing cities to remote areas, meaning infrastructure accessibility, quality and cost differ for users in different places. For example, the National Broadband Network (nbn) is able to deliver internet speeds via Fibre to the Premises of over 100 Mbps to some residents in urban areas,14 whereas some remote areas rely on satellite services that can only deliver speeds of up to 25 Mbps.
  9. Policy uncertainty and poor coordination has affected investment in the energy sector and delayed an effective response to rising energy prices, impacting energy reliability and increasing community anxiety regarding climate change. Over the past decade, the unit price of electricity has risen in real terms by 56%, while retail gas for households has risen by 45% over the same period.
  10. Some infrastructure services will continue to require government subsidies, however these are not transparent and often poorly targeted to those in need. There are 315 community service obligations for infrastructure, 39% of which are not transparent.
  11. New data is being generated in real-time on the performance and use of our infrastructure, enabling improved decision making by users and operators. Road agencies are providing live traffic data on smartphones, in car devices and roadside signage, while transport operators are using smartphone data and third-party apps to show train carriage capacity and to direct waiting customers to empty carriages.

Looking to the future, Australia faces an unprecedented period of uncertainty, 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. As a result, Infrastructure Australia indicates Australia must evolve the way we plan for infrastructure to embrace this uncertainty. Historically, infrastructure planning has sought to predict future conditions and then provide infrastructure to meet anticipated demand. Today, we require a more robust approach.

Rather than projecting forward the status quo, our infrastructure planning should set an ambitious vision for the country, anticipate and adapt to change, manage risk, and deliver infrastructure that works towards – rather than against – the current and future needs of Australians.

The Australian Infrastructure Audit is the starting point for this process and it confirms sustained reform and increasing investment are required.

The full audit can be accessed here.

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