Overview

Implications for infrastructure investment

Targeted investment in new and upgraded nationally significant infrastructure is crucial to advancing Australian Government policies aimed at boosting national productivity. As the world’s 14th largest economy and 16th largest exporter,² Australia relies on connected, efficient, and resilient infrastructure networks to support domestic and international trade. 

Government investments in our national infrastructure networks are significant. As outlined in Infrastructure Australia’s 2025 Infrastructure Market Capacity Report, Australia’s Major Public Infrastructure Pipelineⁱⁱ has increased 14% from 2024 reporting, growing to $242 billion across 2024-25 to 2028-29. This increased investment underscores infrastructure’s role in supporting economic growth and transition.

The Government’s infrastructure investments are informed by and aligned to a range of Government policies and strategies relating to infrastructure, including the Infrastructure Policy Statement, National Urban Policy, National Freight and Supply Chain Strategy and National Road Safety Strategy.

Targeted investment in the right projects at the right time is important as Australia’s nationally significant infrastructure systems become increasingly interdependent – across sectors, locations and operations. Technological advances continue to transform how these systems are designed, built and managed, which in turn, requires greater coordination of technology investment across different infrastructure sectors. This growing interconnectedness underscores the need for coordinated whole-of-government planning across sectors, including collaboration with private sector infrastructure owners.

Coordination also provides the opportunity to maximise the benefits gained through our infrastructure investments by improving strategic planning, coordinating materials and human resources and streamlining approvals and delivery. Importantly, public sector investment should stimulate and supplement private sector investment, not displace it, ensuring a balanced and sustainable approach to infrastructure development. 

Technological change is a transformational opportunity for shaping Australia’s infrastructure systems 

To respond effectively to powerful global and domestic trends, technological change and innovation should play a central role in infrastructure decision making. Infrastructure technology is no longer being viewed as a ‘nice-to-have’ but an opportunity to deliver greater economic, social or environmental outcomes. With the potential to reduce project risks and costs by improving decision making, technology can reduce pressure on government budgets, while also enabling cost effective upgrades that extend asset life and defer major renewals. By using data and automation to optimise operations, it can also strengthen infrastructure resilience to improve asset operation in extreme weather events.³

For example, analysis commissioned by Infrastructure Victoria found that utilising robotics for inspection and maintenance across the water sector could reduce water leaks and save over $140 million in maintenance and repair costs every year.⁴ Modern technologies such as drones and digital twins can enable efficient data collection and utilisation, provide actionable insights and automate construction processes, which can accelerate project timelines.⁵

Technological change is also fundamentally reshaping the infrastructure systems we need to develop, integrate and maintain. For existing infrastructure networks, ongoing technological advancement may necessitate upgrades to fully realise the benefits of autonomous and connected vehicles, drones, and smart infrastructure.

The rapid development of data centres illustrates the growing interdependence between physical and digital infrastructure systems, requiring coordinated planning across water, electricity, communications, and transport networks.⁶ As data centres are typically delivered through a mix of public and private investment, effective planning, funding and delivery depend on close coordination between governments, regulators and the private sector. Targeting the opportunities created by technological change will be essential to delivering and maintaining sustainable, efficient infrastructure systems.

The Centre for Population projects Australia’s population will reach over 31 million in 2035-36, up almost 4 million from 27.6 million in 2024-2025.⁷ Over the longer term, the population could climb to 41 million in 2065-66.⁸ Population growth is expected to be uneven, with capital cities projected to grow the most, on average almost twice as fast as rest-of-state areas. It is expected that 72% of Australians will live in capital cities by 2065-66, with both Sydney and Melbourne expected to be over 8 million by the end of the 2050s.⁷ 

Analysis by the Centre for Population projects Western Australia, Victoria and Queensland will be the fastest growing states over the next decade, with slower growth expected in Tasmania and South Australia. New South Wales is projected to remain the most populous state over the same period.⁷ Sustained growth will drive significant demand for housing, transport and utilities infrastructure, particularly in fast-growing metropolitan areas.

As shown in Table 1, Centre for Population 2025 projections suggest that the fastest growth will be in the eastern state capitals, with substantial growth also occurring in Perth. Coordinated planning will be increasingly important for managing growth across cities and regions.

Source: Centre for Population 2026 

Regional Australia will continue to play an important role in sustaining national productivity and supply chains. Regional centres are increasingly important for the provision of services to surrounding areas, including nearby smaller towns.

The prosperity of Australia’s regions is fundamental to Australia’s economic growth. Infrastructure connects regional communities, supports the movement of goods to and from regions and enables accessibility to essential services. Regional infrastructure supports resource exports, food production, tourism and freight connectivity, all critical to national economic resilience. 

Inner and outer regional areas are also home to 44% of First Nations peoples, with a further 15% living in remote or very remote Australia.⁹ Remote and very remote areas face increased challenges accessing infrastructure and services, coupled with higher costs of living. First Nations people in regional and remote areas are also on the frontline of climate change, with many already disproportionally exposed to extreme heat, rising sea water levels and climate impacts on food sources.¹⁰ Ensuring equitable access to infrastructure and services in these areas will be critical to Closing the Gap and climate resilience.

Just as Australia’s freight task is increasing, so is the role regions play, with freight transported on regional roads growing over the decade to 2022-23 to 187.7 billion tonne-kilometres, an increase of 33.5 billion tonne-kilometres on 2012-13 levels.⁹ With great diversity among regions, targeted, focussed infrastructure investment on strategic freight routes and intermodal terminals requires consideration of unique needs and opportunities, both within and across regions.

Australia’s cities and regions will also need to cater for an ageing population, with the population share of people aged 65 years and older doubling over the past 40 years.¹¹ By 2035-36, approximately 25% of the population living outside capital cities is expected to be aged 65 and over, compared to about 17% within capital cities.⁷ This demographic shift will increase demand for accessible transport, health and social infrastructure.

The forces shaping the Australian economy will impact Australian communities in cities, regions and remote areas in different ways. Coordinated national planning across governments and sectors will be critical to manage growth, strengthen resilience and unlock new economic opportunities. When all three levels of government work together – local, state and Commonwealth – communities benefit from infrastructure that is better planned, better funded and better delivered.

Collaboration helps align national priorities with state networks and local place-based needs, reducing duplication and gaps while making the most of limited public resources. Coordinated planning also provides clearer accountability and smoother delivery across jurisdictions, which is essential for complex infrastructure systems that people rely on every day to access jobs, services and opportunities.

Collaboration between the public and private sectors will also be crucial to delivering the infrastructure needed to support population growth outside capital cities. As an enabler of housing, industry and regional development, well-planned infrastructure, delivered at the right time, can help communities adapt to change, enhance productivity and create opportunities for sustained growth.

Increasing climate hazards – from extreme rainfall and flooding to prolonged drought – are already disrupting freight, water and energy systems. Future investment will increasingly need to embed climate resilience into these nationally significant systems to safeguard productivity, reliability and long-term economic outcomes.
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ii    Publicly funded infrastructure projects valued over $100 million in New South Wales, Victoria, Queensland and Western Australia, and over $50 million in South Australia, the Australian Capital Territory, the Northern Territory and Tasmania.