ALGA National General Assembly - Strengthening Economic Capital

Publication Date
22 June 2021


Good morning and thank you to Cr Linda Scott, Adrian and the Australian Local Government Association for inviting me to speak today at the 27th National General Assembly.

I would also like to acknowledge the Traditional Custodians of the land on which we meet, the Ngunnawal people. I pay my respect to their elders past, present and emerging.

I would also like to acknowledge the particular significance of this year’s Assembly, being Cr Scott’s first since being elected ALGA President and Adrian’s last as CEO.

Adrian - Infrastructure Australia has enjoyed a really collaborative relationship with ALGA under your leadership.

We thank you for your significant contribution to ALGA and local government, but also look forward to that strong relationship continuing.

Setting the scene

Infrastructure Australia is the nation’s infrastructure advisor.

We sit alongside government, with a mandate to provide evidence-based analysis and advice on reform and investment priorities - to help deliver better infrastructure for all Australians.

We take a national lens in identifying infrastructure challenges and opportunities, with our investment advice focused on major projects seeking more than $250 million in Australian Government funding.

However, we are highly attuned to the important role local government plays in providing many essential services, and in providing a vital connection to our communities at the ground level.

This means, that local governments, more often than not have a unique understanding of their community’s unique challenges and opportunities.

It is therefore vital that local government is meaningfully engaged in infrastructure planning and decision making – regardless of the scale of the project or reform opportunity.

This is key to ensuring our infrastructure networks and assets are productive, reliable and resilient, and support our communities for years to come.

Why is infrastructure important

Infrastructure is fundamental to our economic productivity and quality of life.

The infrastructure sector is a significant employer throughout Australia across both construction and operation.

We also need to remember that infrastructure is a job maker -it connects all of us to our employment on a daily basis.

Infrastructure also provides us with the essential services our economy relies on to be efficient and productive; including energy, water and telecommunications.

Importantly, it also provides us with and connects us to the education, recreation and healthcare services we need to maintain a fit, happy and healthy society.

Our 2019 Australian Infrastructure Audit found that our infrastructure mostly works well, in supporting continued economic growth and maintaining our quality of life.

It also found that Australia’s infrastructure was experiencing a range of challenges, including vast distances, service disruptions and maintenance backlogs.

Then throughout late 2019 and 2020 we faced a series of cascading and unprecedented shocks and stresses stemming from natural disasters, climate change and geopolitical shifts.

We started with drought, then horrific bushfires – which was followed by COVID-19 and geopolitical trade impacts.

This all culminated in Australia experiencing its first economic slowdown in almost 30 years.

While the recovery is underway, Australia still finds itself facing significant uncertainty, which has implications for our infrastructure.

We need to evolve and strengthen how we plan and deliver our infrastructure to ensure it continues to play a central part in our economy and supports our high standard of living.

To do this, we need to improve infrastructure planning approaches, make robust decisions and ensure that resilience is a central consideration of infrastructure networks and assets.

Understanding the infrastructure needs of a Place

To strengthen our infrastructure networks and assets in the face of uncertainty we need to recognize that we cannot approach infrastructure planning using a ‘one size fits all’ approach.

We need to adopt approaches that recognise and respond to the unique characteristics of our settlements.

Place-based planning provides an example of this. By taking a ‘place-based’ approach we are able to connect infrastructure planning and delivery with the needs of the community at a local level.

I am a strong believer in ‘place-based’ planning, having seen the positive impacts it can have over my time on the Board of Placemaking NSW.

That is why I am proud of the fact that the 2021 Australian Infrastructure Plan, due for release in August, considers ‘place-based’ approaches to infrastructure in significant detail.

The Plan takes a cross-sectoral view of the infrastructure needs of a Place and identifies how to address them.

Recognising that settlements of a similar size often provide a better guide to understand their characteristics than state and territory borders, we have divided Place into the following types:

  • Fast Growing Cities of Sydney, Melbourne, Brisbane and Perth
  • Smaller cities and Regional Centres
  • Small towns, rural communities and remote areas
  • Northern Australia and developing regions

Importantly, in adopting a ‘place-based’ approach, our recommendations aim to connect infrastructure decision-making to the local community.

We want local communities and local government to have more of a say about the kind of places they want to live in and their future infrastructure needs.

To be successful, a ‘place-based’ approach, should take the unique characteristics of a Place and turn them into a shared vision for a region. The vision should be:

  • Developed collaboratively and locally.
  • Based on a holistic picture of interrelated elements in that area.
  • Seek to address an area’s needs, build on its strengths and take advantage of opportunities.

By developing a shared-vision, the capacity to deliver infrastructure that improves productivity and quality of life, while meeting community needs is enhanced.

The Australian Infrastructure Plan will also emphasise that in taking a ‘place-based’ approach, you are able to embed integrated planning and coordination in infrastructure development.

Integration and coordination across governments and between agencies helps ensure that projects are planned and delivered to account for their impacts on nearby places.

Across all aspects of ‘place-based’ planning, we suggest well-structured governance frameworks to not only support collaboration, but also facilitate knowledge sharing and resource pooling.

A recent example of a ‘place-based’ approach in action is demonstrated by our Regional Strengths and Gaps Project, which is currently underway.

Regional Strengths and Gaps

This project is designed to bring a national perspective to the diverse infrastructure needs facing Australia’s regions.

To ensure we have the best possible understanding of each local context, we have collaborated with the RDA network - helping us consult with close to 800 local representatives across 48 sessions.

Importantly, this project also provided local representatives the opportunity to highlight their most pressing infrastructure needs and champion the unique strengths of their respective regions.

Our review of regional strengths and infrastructure gaps will enable us to identify priority areas for further planning and analysis and make the case for ‘place-based’ infrastructure investment or reform.

We are currently finalising our report, which we expect to release in in August this year

Better quality decision making

It is not just about strengthening our planning processes, but we also need to improve the robustness and transparency of decision making.

Getting our infrastructure decisions right is crucial to our future success.

Each decision to build or upgrade infrastructure can impact taxpayers and users for generations.

While there have been improvements to governance, decision making, transparency and collaboration, more can be done.

The early announcement of underdeveloped proposals still occurs, often leading to the adoption of less efficient solutions, cost blow-outs, stakeholder back-lash and ultimately negative community outcomes.

To avoid negative outcomes, infrastructure needs to be carefully assessed, designed and timed.

To improve the robustness of decision making, we need to work towards:

  • Ensuring rigorous analysis through the completion of business cases.
  • Improving the transparency of decisions, including through the public release of business cases.
  • Engaging with communities in project development and meaningfully incorporating any feedback.
  • Avoiding where possible from publicly committing funding to projects before relevant analysis is complete.

While these are all vital, I cannot stress enough the importance of inclusive decision-making.

It not only builds trust in institutions, but also harnesses a local community’s knowledge of their Place, and the services they need in order to live productive, healthy lives.

Infrastructure Priority List

Our Infrastructure Priority List provides a mechanism to support more robust and transparent infrastructure decisions.

The Priority List provides a national independently verified evidence-based list of investment opportunities for governments of all levels to consider.

It is informed by our own independent research, as well as extensive collaboration with government, industry and the community.

This collaborative approach enables us to better understand local challenges, and ensure our advice responds to changing community needs.

The 2021 edition of the Priority List, which we published in February identified a $59 billion project pipeline.

The opportunities identified cut across the broad spectrum of transport, energy, water, waste, telecommunications and social infrastructure.

The recently released Federal Budget included new funding for 13 investment opportunities that were included in the 2021 Priority List. Overall, 31 proposals on the Priority List received funding.

We are proud that the Priority List is an input that helps direct investment towards high-quality proposals with a proven need.

In July, we will be opening our call for submissions for the 2022 Priority List.

We welcome submissions from all entities and individuals. As such, I encourage the local governments here with us today to submit proposals for our consideration.

If you have any questions around eligibility or the submission process, please get in touch.

My team is willing and able to work with you on proposals and answer any questions you may have.

Resilient Infrastructure

Finally, any attempts to improve planning and decision making must acknowledge that resilience needs to be a central consideration in the development of infrastructure.

As we know, the resilience of our infrastructure has been tested on many fronts.

Our communities have experienced unprecedented extreme events.

The devastating bushfires of late 2019, damaged energy grids, which in turn disabled telecommunications infrastructure and water treatment facilities.

They also damaged transport and telecommunications infrastructure, which hindered emergency services coordination.

We must not forget, that these impacts were felt first and foremost locally.

It was local infrastructure networks and local government owned assets which felt the full brunt of these shocks and stresses.

An experience all too familiar for the councils surrounding Canberra – whether that be drought in Forbes or bushfires throughout the South-Coast.

By 2050, the annual economic cost of natural disasters in Australia is expected to more than double – from an average of $18 billion per year to more than $39 billion per year.

Moving forward, increasing frequency and severity of shocks and stresses will continue to test our infrastructure. 

To prepare for this, we need a shift in focus from the resilience of individual assets, to the contribution of assets to the resilience of the community.

This means shifting focus from risk to resilience planning.

Traditional risk planning focuses on avoiding threats, while resilience planning acknowledges that they are unavoidable, shifting the focus to managing and recovering from disruption.

This will help ensure that infrastructure is not only able to absorb, adapt and respond to future shocks and stresses but also contribute to the resilience of our communities.

Resilience in our work-program

Resilience is a key focus for Infrastructure Australia, and a critical consideration in the advice we provide on opportunities for investment and reform.

We have been working on a number of projects, which aim to support the delivery of resilient infrastructure networks and assets.

In addition to a chapter on Place, our 2021 Plan also focuses on the resilience of our infrastructure sector.

Specifically, it will include reforms focused on infrastructure planning for an uncertain future. As part of this, it will call for:

  • A consistent approach to the quantification of costs, benefits, performance of assets, systems and places during project planning and assessment.
  • The creation of a common set of data and scenarios to inform risk management, land-use and strategic planning.
  • The universal incorporation of place-based resilience planning.

Beyond planning for resilience, our refreshed Infrastructure Assessment Framework, due for release next week provides guidance around considering resilience in infrastructure decision making.

The Assessment Framework guides the development of business cases and outlines how we assess proposals for inclusion on the Priority List.

Our Assessment Framework now provides specific advice on accounting for resilience in major infrastructure decision making – including guidance on:

  • Physical climate risks
  • Community resilience to a broader range of shocks and stresses
  • Our expectations around accounting for resilience.

Taken together, we are developing evidence-based, but pragmatic ways to embed resilience in planning and decision making for benefit of local communities.

Concluding remarks

Thank you again to Cr Scott and ALGA for inviting me to speak here today.

We have a real opportunity to strengthen our infrastructure networks through adopting ‘place-based’ planning approaches and improving the robustness of decisions.

But fundamentally, we need to be working towards developing and delivering resilient infrastructure.

We remain committed to supporting government and industry with this task.

Thank you, I would be pleased to take any questions.