Urban fringes of Sydney, Melbourne, Brisbane and Perth are particularly stretched due to the population boom

This article is more than 1 year old

This article is more than 1 year old

Australia’s cities are straining under the weight of the country’s rapid population growth, with a major audit finding that $600bn in new spending is needed to keep pace with demand over the next 15 years.

Joining calls from the Reserve Bank governor for the Coalition to prioritise spending on infrastructure, the head of Infrastructure Australia, Romilly Madew, says an audit undertaken by her agency has highlighted the need for significant government investment.

“On the infrastructure priority list there are already 103 initiatives sitting there that have been identified by the states and territories, and that means there is a pipeline of infrastructure that has been identified that could go,” Madew said.

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She also pointed to spending on maintenance, public transport rolling stock and enabling electric vehicles as possible ways to stimulate the economy through infrastructure spending.

The audit, to be released on Tuesday, has found that infrastructure is being particularly stretched on the urban fringes of Australia’s four largest cities – Sydney, Melbourne, Brisbane and Perth – where the majority of the country’s population boom is occurring.

The problem is being compounded by ageing assets, rising road congestion, public transport crowding and growing demands on so-called “social infrastructure”, such as schools, hospitals and parks, as more people move into cities.

The IA report warns that in order for Australia to cope with a forecast population of 31.4 million people in 15 years’ time – an increase of 23.7% – spending on infrastructure will need to remain at about $40bn a year.

About three-quarters of the forecast population growth over the coming 15 years is projected to occur in Australia’s four biggest cities, with most if this in Sydney and Melbourne. Without action to manage the growth, the cost of road congestion will grow $18.9bn to $38.8bn in 2031.

Public transport crowding is also on track to increase fivefold over the same period, costing more than $800m a year.

“Population growth offers enormous economic opportunities but the risk is that our infrastructure fails to keep pace with demand, and this impacts productivity, quality of life and the liveability of our cities and regional centres,” Madew said.

She said that the country also needed to look at a large and growing backlog of infrastructure maintenance across health, water and transport, but the cost was difficult to quantify.

“It is clear that changing and growing demand and a maintenance backlog is putting unprecedented pressure on infrastructure services.”

The audit also looked at the cost for households for infrastructure, with analysis of the household expenditure survey finding the average household spent over $314 each week on infrastructure in 2015-16 – or $16,000 annually.

While most people report concern about energy costs – which have risen 50% over the past decade – most of the expense is related to car purchase and running costs.

The audit found that the cost of infrastructure was not affordable for the lowest 20% of income earners, who are spending around a third of what they earn on energy, transport, water and telecommunications.

Remote and regional Australians were also feeling the pinch, with two-thirds of the continent not having mobile phone coverage, compared to 99.4% of premises. About 43% of farms have no or little mobile phone coverage, with 14% having no access at all.

Nineteen per cent of very remote Indigenous communities lacked water for the preparation of food or for clothes washing and 6% lacked water for personal hygiene.

Peter Colacino, Infrastructure Australia’s executive director of policy and research, said that while investment in infrastructure was occurring at record levels, with $123bn of construction work commenced since 2015, the challenge facing policymakers was to maintain this level of spending.

“We see access improving, quality is quite good compared to comparable nations and affordability has improved … but all of that said, as we are in a process of rapid population growth, of changing technology needs, changing user preferences, slowing economic growth and the expectation that infrastructure can boost productivity,” he said.

“The idea that you are ever finished building is just not right, infrastructure investment will be needed into the future with changing expectations of the economy.”

Madew said the infrastructure boom that Australia was experiencing was “the new normal”.

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Labor’s shadow minister for infrastructure, Catherine King, said the audit confirmed the need for the Coalition to produce a “real plan for infrastructure to protect jobs, curb rising congestion and stimulate the economy”.

“Labor welcomes the extensive piece of work by Infrastructure Australia that includes a broad review of economic and social infrastructure and confirms the need for infrastructure investment decisions to be based on clear evidence,” she said.

“After six years of cuts and inaction, the audit is another stark reminder of the real pressures in the system now.”

The infrastructure minister, Michael McCormack, said the report did not account for an additional $23bn in new infrastructure investment announced in the 2019-20 budget, including more than 160 urban congestion projects.

“Australia has always been a desirable place to live, work and raise a family both for people raised here and migrants and we are seeing that more than ever, which is why the Liberal and Nationals government is investing $100bn over 10 years in transport infrastructure across Australia to manage our growing population,” he said.

“With Infrastructure Australia calling for sustained investment in infrastructure, we are maintaining our historically high investment on transport infrastructure which now averages over $10bn a year over the forward estimates, and have established a 10-year rolling pipeline to enable planning and certainty of future investment.”