Home' Future Building Australian Infrastructure Review : December 2010 Contents futurebuilding 65
Every Australian can see that a case for
• traffc jams during peak periods;
• more than 10,000 power outages in
New South Wales last year;
• the backlogs at our transport
gateways, which have been well
• shortfalls in services across our
social infrastructure networks like
health, education and social housing.
These are all clear examples of where
infrastructure is falling short across the
Over the coming 25 years, demand for
passenger transport will double.
Already, urban congestion costs
Australia $9.4 billion every year.
Without action, congestion costs will
more than double to $20.4 billion by
By 2050, Australia will require capacity
to deal with a tripling in the national freight
These growth pressures will be
underpinned by population growth that
will see between 36 and 42 million people
living in Australia by the middle of the
Our forecasts fnd that this population
growth will require a doubling in recurrent
transport infrastructure investment between
now and 2030.
By 2050, Australia will need to fund
a fourfold increase in annual transport
investment, representing an annual spend
of more than $63 billion every year on
A 2008 report by the Royal Bank of
Scotland quantifed Australia’s economic
infrastructure investment task at a
conservative $455 billion over the next
In June 2008, Citigroup estimated that
Australia would need to fund an investment
of $770 billion over the next decade to
return the quality of infrastructure to a
point that will sustain ongoing national
These fgures represent a signifcant
challenge, particularly in light of recent
analysis by BIS Shrapnel and the Royal Bank
of Scotland, which forecasts a decrease
in forward infrastructure investment by
state governments as they approach their
AAA trigger points -- or in the case of
Queensland, try to recover their rating,
which was recently lost.
Even at current, historically high levels
of government investment, the nation's
infrastructure backlog grew by around
$32.1 billion in the last year alone.
If we assume that the $770 billion
investment task estimated by Citigroup is
correct, all of this points to a simple truth;
Australia needs to change the game for
Transport taxation reform
These challenges lead me to my frst
theme -- Australia needs new policies and
reforms that will deal with urban congestion
and help fund the infrastructure backlog.
The scale and complexity of Australia's
urban congestion challenge is no secret.
Every working day, motorists and
businesses experience the challenges
posed by excessive demand for capital city
In Sydney, Melbourne and South East
Queensland, congestion is now chronic.
Sydney is facing congestion costs of
about $5 billion a year. In Melbourne,
congestion strips the national economy
of around $4 billion, while in South East
Queensland, congestion will cost $3
billion by 2020.
In recent decades, regulatory reforms
in areas like electricity and gas have seen
Australia adopt pricing structures that
provide rational signals to manage both
supply and demand.
Transport has been notable because of
the reluctance of governments thus far to
consider hands-on demand management.
This reluctance is easy to understand.
Transforming Australia: An address to the National Press Club
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