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More spending needed for infrastructure

BIS Shrapnel’s sixth review of the maintenance industry shows that $35 billion was spent in the sector during 2011-12.

The report, Maintenance in Australia 2012 to 2027, said maintenance spending had risen during the past two years but it was not keeping pace with the investment surge in public infrastructure and mining over the past decade.

?For every $100 of net assets in Australia, we are only spending $1.44 on maintenance today compared to nearly $1.70 last decade,? said Adrian Hart, the senior manager of BIS Shrapnel?s Infrastructure and Mining Unit.

?These assets aren?t built to last 70 to 80 years without upkeep. Unless we start rethinking our attitudes and the funding of maintenance, we will face a wall of reconstruction costs within the next decade ? and with no added output or productivity gains to show for it.?

While some industry sectors are increasing their focus on maintenance ? particularly in mining and mining-related segments such as ports and rail ? other sectors are stagnating or falling behind.

According to the report, the weakest outlooks for maintenance are for roads, defence, utilities (including telecommunications) and light manufacturing, hence a maintenance review was called for.

?The drivers for the weakness in maintenance vary considerably,? said Hart. ?For most public assets, pressure is now being brought to bear by State and Federal Governments looking to tighten spending following sustained investment programs that shielded the economy during the worst of the GFC.

“Governments should be prepared to keep investing in infrastructure to boost productivity,” Hart said.

“But these investments should be accompanied with a commitment to maintain assets sensibly for maximum benefit over the long term.”

Sources: AAP, BIS Schrapnel

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