Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 2 Contents Everyone is in unanimous agreement about
the need for nation building and the need for big
developments, but how do we take that next step?
There are three key points. Firstly, our infrastructure
gap is growing, and I think it's particularly
pronounced because of the concerns in the resources
sector, which really has been a signi cant contributor
to Australia's overall growth. Clearly, as that moves
through its cycle, there is a challenge to the impetus
that it can give our economic situation.
The second point is that investor demand
has never been stronger. Everyone's got a sense
of that, and hopefully we can make sure that
message is clear.
The third point is looking at how we can reframe
the debate with government. The key point -- it's been
mentioned before and I'll emphasise it again -- is that
there is not a lack of capital; there's a lack of projects.
So how do we address that project issue? If we
look at the delay in addressing the infrastructure
backlog, the unfortunate situation is that the
government sees spending on infrastructure as a cost.
It's not seen as an investment, even though it creates
its own revenue stream for government and therefore
should be looked at through those eyes.
Looking at the backlog, in 2011 it was estimated
at $750 billion, but now, according to Deloitte, it is
$920 billion. Irrespective of how it's calculated, it is
growing, and we're not getting on top of this issue as
an industry, and as a country.
The productivity issue gets talked about a lot,
but what does it mean? What is the cost of that
lost productivity? McKinsey have done some work,
saying that it will cost the government $90 billion per
annum in revenue by 2017.
And each year, the shortfall between our current
level of productivity and our long-term historical
average keeps compounding. The gap that we are
Investor demand remains strong, and yet Australia's
infrastructure gap continues to grow. The problem is
not a lack of capital; it's a lack of projects, according to
Macquarie Capital's Jim Miller.
22 futurebuilding Volume 3 Number 2
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