Australia Living Standards to Fall Without Infrastructure Boost

By Bloomberg 13 August 2019
A protester walks past an electronic board showing cancelled flights as they gather against the police brutality and the controversial extradition bill at Hong Kong's international airport on August 12, 2019. Photographer: Manan Vatsyayana/AFP/Getty Images

Australians face declining living standards and mounting costs from traffic congestion and energy bills unless the nation ramps up its infrastructure-spending pipeline, according to a government-commissioned report released Tuesday.


Infrastructure Australia highlights growing concerns that rapid population growth in cities such as Sydney and Melbourne have strained aging transport links. The body also underlines growing stresses from rising energy costs and inadequate water security.

“Changing and growing demand, and a mounting maintenance backlog, mean a new wave of reform and investment is necessary to ensure quality of life and economic productivity are enhanced over the next 15 years,” Infrastructure Australia said in its first major report since 2015.

The call for more investment echoes pleas from central bank Governor Philip Lowe, who has repeatedly called on the government to lift infrastructure spending to boost economic capacity and hiring, particularly when finance is cheap.

Prime Minister Scott Morrison’s conservative government has said the central banker’s comments vindicate its current policy settings. As part of a successful push for re-election in May, the government pledged to boost spending on roads, railways and airports to A$100 billion over a decade.

The report finds:

  • Energy affordability has deteriorated, with a steep rise in network costs driving energy bills 35% higher over the past decade, and up by 56% per unit of electricity consumed in real terms.
  • The much-maligned National Broadband Network continues to face challenges. In the 4.8 million households now switched on, services haven’t met the expectations of many users.
  • In the water sector, while many metropolitan utilities are increasing the sustainability and quality of their services through innovation, some regional areas are suffering from growing water security fears as large parts of the country are in drought.
  • Without increased spending, road and public transport congestion costs could double to nearly A$40 billion by 2031
  • Community opposition has contributed to the delay, cancellation or mothballing of more than A$20 billion of infrastructure projects in the last decade

To contact the reporter on this story:
Jason Scott in Canberra at [email protected]

To contact the editors responsible for this story:
Ruth Pollard at [email protected]


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