Overview

Global and domestic forces shaping Australian infrastructure 

Australia’s infrastructure systems are being reshaped by powerful global and domestic trends that are changing how we plan, deliver and maintain essential networks. International forces include climate change, geopolitical tensions, shifting trade dynamics, and competition for materials and skilled labour. Domestically, there is a need to lift productivity, support a growing urban population, improve housing and energy affordability, and strengthen resilience to climate hazards.

The Australian Government’s 2023 Intergenerational Report considers five major forces expected to shape the Australian economy over the coming decades. These are: population ageing, technological and digital transformation, climate change and net zero transformation, rising demand for care and support services, and geopolitical risk and fragmentation. These dynamics are expected to fundamentally shape future infrastructure demand and the way national systems operate. The Government’s productivity agenda is focussed on five pillars, aimed at identifying reforms to continue to modernise and strengthen Australia’s economy:

• Creating a more dynamic and resilient economy
• Building a skilled and adaptable workforce
• Harnessing data and digital technology
• Delivering quality care more efficiently
• Investing in cheaper, cleaner energy and the net zero transformation.

These forces underscore the need for infrastructure systems that are resilient to demographic, economic and climate pressures – strengthening national productivity, supporting equitable growth and accelerating the clean energy transition. Consideration also needs to be given to future-proofing new infrastructure networks for new technologies and investigating how technological advancements can make existing infrastructure networks more productive, reducing the need for further build options.

While these shifts bring uncertainty, they also bring opportunities. For example, modelling by the Treasury found that Australia’s emission reduction plans support continued economic growth, higher living standards and employment. Declining global demand for fossil fuels is expected to be offset by new renewable energy export markets, with growth in manufacturing and construction as energy infrastructure is modernised and new industrial opportunities arise.¹

Australia’s nationally significant and critical infrastructure – public and privately funded – will need to respond to these forces, particularly where disruption, delay or under-investment would have economy-wide consequences. It also needs to support the delivery of national priorities such as the commitment to net zero emissions by 2050, the AUKUS partnership, and the National Housing Accord. The AUKUS partnership, for example, will require significant investment in specialised shipyard infrastructure, transport corridors, utilities, and workforce and training facilities, with specific focus on dedicated precincts to develop local manufacturing capability.