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National audit identifies infrastructure shortfalls

The Infrastructure Australia Audit Report that was released last month warned that population and economic growth would cause increasing congestion and bottlenecks, which could potentially affect the nation’s living standards and economic competitiveness. The audit identified the factors driving infrastructure demand and their impact, while also outlining Australia’s policy, funding and delivery challenges.

The report made a total of 81 findings. It predicted that Australia’s population would grow from 22.3 million in 2011 to 30.5 million in 2031, that road travel times in some capital cities would increase by at least 20 per cent in the most congested corridors by 2031, and that demand for public transport in capital cities would almost double over the next 20 years.

The audit concluded that maintaining and maximising the efficiency of existing infrastructure would be critical and just as important as developing new infrastructure projects. It also noted that Australia required integrated infrastructure and land-use planning across all levels of government, and that the most significant opportunity for public policy reform in Australia’s infrastructure sectors lay in the current arrangements for land transport funding.

As a result of these findings, a number of major changes were proposed to the way Australia plans and delivers new infrastructure, including improvement of governance and modern regulatory settings, increased transparency and project assessment processes, and greater information sharing about infrastructure performance.

Industry responds

The audit’s release elicited a number of responses from government and peak industry bodies.

Consult Australia chief executive Megan Motto, who recently criticised the Federal Budget’s minimal funding for new infrastructure, said the report highlighted the urgency for “more substantive investment”.

“The [Federal] Government’s much promoted infrastructure spend of $50 billion [from last year’s budget] will be outstripped by congestion costs of $53 billion as soon as 2031,” she said. “The [2015–16] Federal Budget was one of the first in memory with no new funds for major projects. This report highlights that now is not the time to take a year off from new infrastructure investment.”

Queensland Deputy Premier Jackie Trad – who also acts as the state’s minister for transport and infrastructure – called on the Federal Government to work more closely with state governments to ensure priority infrastructure projects received the necessary funding, and emphasised that public transport infrastructure could be key to easing congestion in road networks.

Australian Trucking Association (ATA) CEO Christopher Melham also pointed out that the audit had identified a need for a broader transport pricing system. “The existing system for charging heavy vehicles for their road use – a combination of fuel and registration charges – will overcharge the truck and bus industries by $117 million in 2015–16,” he stated.

“Keeping red tape and compliance costs down needs to be a priority in any new road pricing system,” Melham added.

Construction material policy priorities

The audit came after Cement Concrete and Aggregates Australia (CCAA) released a list of policy priorities to help protect construction material reserves.

The CCAA’s four-point policy plan called for:

• Clearer and more timely decision-making by local governments at the planning and development stage for new quarries and the expansion of existing ones.
• Long-term protection of extractive resources from incompatible development.
• A more sensible and consistent approach to environmental regulation and compliance.
• A more strategic and holistic approach by governments, particularly at the state level, to infrastructure planning.

“State governments, in particular, have overarching responsibility for the planning and development frameworks that impact on our industry,” CCAA CEO Ken Slattery stated. “It’s contingent on governments to ensure that when planning our future infrastructure needs, they also develop strategies and policies that ensure long-term access to the materials from which these projects will be constructed.”

Infrastructure Australia is now consulting with the public, governments, business and peak bodies to prepare an Australian Infrastructure Plan that will make recommendations on project investment priorities and specific areas for policy reform.

The 15-year plan is expected to be submitted to government in late 2015.

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