AusRAIL 2022

Publication Date
02 March 2022

I want to acknowledge Caroline Wilkie and the team at the Australasian Railway Association

We really appreciated and valued your input to a range of Infrastructure Australia’s work programs,  especially as we developed the 2021 Australian Infrastructure Plan – particularly your advocacy around critical issues such as sustainability, workforce wellbeing, and procurement reform.

Before I go any further, I want to acknowledge the traditional custodians of the land on which we all meet today, and pay my respect to the elders, past, present and emerging, of all Australia’s Aboriginal and Torres Strait Islander peoples, and particularly for us here in Sydney, the Gadigal People of the Eora Nation.

I’ve been asked today to talk about the infrastructure challenges we face as a nation,

I will do this through an overview of the 2021 Australian Infrastructure Plan – an incredibly comprehensive and wide-reaching reform document unlike anything that has ever been published in Australia, and we believe, the world.

The Plan is the reform response to the 180 infrastructure challenges and opportunities identified in our 2019 Australian Infrastructure Audit.

Back then we called out a number of key trends, including –

  • An increasing pace of technological change
  • Shifting consumer preferences
  • A changing climate – with natural disasters increasing in frequency and severity
  • Changing trade patterns and geopolitical shifts
  • Alongside, a re-shaping of global institutions, diminishing trust and shifting global norms.

We also found that as Australia’s population grows –

  • Community needs are evolving
  • Our population patterns are shifting and
  • Technology is enabling new industries and economic activity, effectively transforming every part of our lives.

COVID-19 impacts

Of course – way back in 2019 when we began working on the Australian Infrastructure Plan – few could have predicted the impacts the pandemic would have on our communities and our infrastructure – including:

  • The largest net internal migration to our regions on record – an approximately 200% increase in the number of people moving to regional areas. This has increased economic activity in some regions but also created new pressures in terms of access to and affordability of infrastructure services.
  • New patterns of work which have shifted demand for internet, transport, water. energy, waste and social infrastructure from city centres to suburbs.
  • A trend which we think will ‘stick’ as 1 in 10 workers have a desire to work from home 2-3 days a week permanently.  
  • Changed travel patterns, with car usage increasing significantly due to health concerns about public transport. Even in cities Perth, relatively untouched by the direct health impacts of the pandemic, public transport use is still 18% down on pre-COVID levels.

The resilience of infrastructure is also a focus, with our infrastructure being increasingly susceptible to the impacts of a warming climate, bushfires and extreme weather, noting Australia is facing a doubling of the annual cost of natural disasters – from $18 billion per year to more than $39 billion by 2050.

The case for reform

The impacts of COVID-19 have been devastating and we are now adapting to a new ‘Covid-normal’ – it’s great to be here today, in person!

The predicted two-year pause in net overseas migration – a major driver of infrastructure demand also provides a rare opportunity to catch-up –

To implement reforms to support a higher and more consistent quality of life – in all communities.

To ensure we continue to access the critical skills and supply chain capability we need to remain competitive.

It’s an opportunity to lay the foundation for a stronger, more productive, and secure country in anticipation of future population growth.

Alongside this opportunity, we face many challenges relating to the capacity and capability of the infrastructure sector to deliver the project pipeline.

Current investment will peak at $52 billion in 2023, and our market capacity research, published last year, shows that demand for plant, labour, equipment and materials will be 2/3 higher than the previous 5 years.

Of course, reform can also deliver substantial direct economic benefits:

  • 1 in every $5 in the economy touches infrastructure;
  • Every dollar of public infrastructure investment can generate a four times multiplier on GDP.

That is why the release of our Plan last year is so important.

It has come at a crucial point in our history, with guidance required on how we can collectively recover and deliver infrastructure for a stronger Australia.

The 2021 Australian Infrastructure Plan

The 2021 Plan provides Australia’s governments with a practical reform pathway focused on supporting the national COVID-19 recovery and delivering the infrastructure we need.  

The reforms identified prioritise community and user outcomes, while also considering costs and risks in implementation.

To ensure our advice is practical and actionable, each recommendation is accompanied with an owner, interim outcomes, and a series of enabling activities.

Importantly, the 2021 Plan represents an industry consensus.

It has been informed by an extensive engagement program that targeted more than 6,500 stakeholders across industry, government, and academia – including the ARA.

  • It includes three cross-cutting chapters covering:  
    • Place-based outcomes for communities
    • Driving a step-change in industry productivity, and innovation and
    • Improving resilience and sustainability for a stronger Australia.

These are the three themes I will focus on.

Place-based outcomes for communities

 Reforms are needed to unlock the potential of every place – where we have a strong focus on harnessing the identity and uniqueness of each place.

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

In fact, we need to adopt approaches that recognise and respond to the unique characteristics of our settlements.

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, and
  • embed integrated planning and coordination in infrastructure development.

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

Importantly, the Plan proposes a consistent national approach to assessing infrastructure needs across each community type that reflects their connected and mutually reinforcing nature.

This will create a balanced Australia, where participation, population and productivity are more evenly distributed, leading to a higher overall quality of life and greater economic and environmental resilience.

Unique geographies / a vision for the place

In Fast-Growing Cities, like Sydney, Melbourne, Brisbane and Perth, communities typically have access to high-quality infrastructure at an affordable cost – but the pace of growth and change has put many legacy issues under strain.

This is also a challenge in some satellite cities, such as the Geelong and the Gold Coast which have average population growth of over 2.3 per cent.

Concentrated population growth in our cities has attracted jobs and boosted economic growth, but it is also heightened existing pressures on housing, services and the environment.

For this reason - all levels of government should jointly develop a clear vision for each fast-growing city that underpins land use, infrastructure and planning strategies.

Meanwhile, the Plan recognises that many of our Smaller Cities and Regional Centres have unrealised growth potential.

With improved access to employment, education, services, housing and community facilities, many could accommodate further sustainable population and economic growth.

This should be achieved by

  • enhancing local identity,
  • leveraging social infrastructure and
  • improving digital and economic connectivity to Fast-growing Cities and neighbouring regions.

We also 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 -

Taking the unique characteristics of a Place and turning 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 and
  • Seek to address an area’s needs, build on its strengths and take advantage of opportunities.

Integrating land use and transport

In planning and building place-centric activity centres, the Plan also recommends a network approach that ties different transport hubs together.

This recognises that for our cities to function at their best, people need to be able to travel around and between their community – their homes, workplace, school, family doctor, or the local park – and freight needs to be able to get into the communities it serves.

We emphasise the important of a cross-sector, place-based approach to integrating land use and transport.

This kind of planning is informed by the relationship between

  • population flows,
  • spatial structure in towns and cities, and
  • emerging mobility patterns and behaviours.

We have a real opportunity to maximise the overall benefits of our transport investments by aligning transport programs with place-based objectives.

In practice, this means linking transport infrastructure funding decisions to published population and land use objectives.

In the short term, this means aligning transport investment with an

  • overarching vision for settlement and activity,
  • land use plans referencing national population forecasts and
  • tested against growth scenarios.

And in the longer term, to ensure the most cost-effective mobility and land use outcomes from transport expenditure, we need to tie transport budgets to movement targets – as well as targets for the performance of ‘places’.

Sustainability and resilience

Sustainability and resilience is another key focus area for Infrastructure Australia – and something which cuts across the entire 2021 Plan.

With increasing uncertainty and an evolving risk landscape, the way infrastructure is planned, built and operated will need to change.

This means shifting from risk to resilience planning.

The singular, siloed perspective that’s common today will need to change to a collaborative approach that strengthens the resilience of assets and networks, systems, places and communities.

Systemic thinking shifts the focus from the resilience of a physical asset to the contribution that asset makes to the resilience of the broader network or system.

As a sector, the first step in a systems approach to resilience is to develop a consistent, nationwide understanding of the risks Australia faces, including:

  • Community needs and preferences
  • The value of resilience
  • The ways infrastructure assets interact
  • The systems they influence, and
  • The roles and responsibilities for managing risks.

Taking this approach not only changes the emphasis from asset to system, it moves responsibility from individual to shared responsibility.

The infrastructure planning phase offers the most significant opportunity to plan for and achieve resilience.

The decisions made at this stage establish the trajectory for the rest of the infrastructure lifecycle.

It is the stage when important decisions like location, design and management of asset interdependencies are made, beyond the resilience of the infrastructure asset itself.

It is also when shared responsibility for outcomes can be built between government and the community.

Importantly, too – the planning phase is where whole-of-system and whole-of-place outcomes can be assessed, and where build and non-build options can be considered equally, to find the most beneficial solution.

Ensuring that resilience is considered at these early stages will improve project outcomes across the country.

This brings me to the next key cross-sector theme of the 2021 Plan, which focuses on industry productivity and innovation.

Driving a step-change in productivity

Driving a step-change in productivity is another critical focus area for our 2021 Plan.

Productivity in Australia’s infrastructure and construction sector has failed to keep pace with growth.

It is one of only a handful of sectors with declining productivity

  • It has amongst the lowest rates of technology and digital adoption
  • It has amongst the highest rates of suicide, and
  • It has the lowest rate of female participation of any sector in Australia.

Over the past 30 years, the sector has become 25% less productive compared to mining, manufacturing, retail and transport.

To fully realise the benefits of our public infrastructure investment – we need to drive a step-change in industry productivity and innovation.

This starts with a commitment to:

  • Greater transparency and coordination of the project pipeline
  • More collaborative models of infrastructure delivery and
  • Getting smarter about data and digital tools across the whole project life cycle.

And government investing in its own capability to be a more mature, model client.

This will deliver greater value for money and reduce risks for Australia’s governments as they deliver an ambitious investment pipeline.

However, we also need to get serious about granular reforms around:

  • Enterprise based delivery models – as are being advocated by the World Economic Forum
  • Contract standardisation – which is being embraced by the UK, Singapore and Hong Kong
  • Embracing digital adoption – lead by industry and jurisdictions like the UK
  • Supporting modern methods of construction – proven approaches from leading economies, and infrastructure industries, such as the UK, Canada, and the OECD
  • And, critically, supporting culture change.

Over the coming weeks we will release Delivering Outcomes, a roadmap to improve infrastructure industry productivity and innovation.

With this release, Infrastructure Australia is continuing to progress industry reform, with additional recommendations on seven key areas:

  • Outcomes for people and place
  • Infrastructure as a system
  • Digital transformation
  • Collaboration and integration
  • Commercial optimisation
  • Delivery innovation, and
  • People wellbeing and resilience

We will be accepting comments from policy makers, infrastructure owners, delivery agencies and the broader sector to strengthen the evidence base and support implementation of these reforms, so I encourage you to sign up for updates on our website, and contribute to Delivering Outcomes when it’s released.

Concluding remarks

Through the 2021 Australian Infrastructure Plan, our market capacity program and Delivering Outcomes, Infrastructure Australia has set an ambitious vision and pathway for reform:

However, the challenge of progressing the reforms outlined today is a shared one.

Successful reform is achieved through:

  • Working together to identify where there are opportunities or intractable challenges
  • Learning from others
  • Collaborating with across government jurisdictions, communities and industry
  • And adopting and leveraging best practice.

Infrastructure Australia, governments, industry, individuals and the community – all have a distinct role to play as we move from policy development to implementation.

The challenge now, is for all of us across industry and government to work together to champion, adopt and implement these important reforms.

Thank you again to the Australasian Railway Association for inviting me to speak today – and for your support on this journey to date.

Thank you