Launch of the 2021 Australian Infrastructure Plan

Publication Date
03 September 2021

Thank you Laura – and good morning everyone.

I want to start by acknowledging:

Our Chair Julieanne Alroe

Our event partners the Business Council of Australia

My colleagues and our partners who contributed to the Plan, as well as

the many thousands of stakeholders who have supported us in developing the 2021 Infrastructure Plan – some of whom you will hear from shortly.

Speaking on behalf of the team involved in drafting the Plan over 18-months – we are delighted to have more than 2,500 people registered to join us on the line for the launch of the Plan,

But also this morning to have seen so many people engaging with the Plan today and participating in the reform dialogue.

We hope the Plan can be a catalyst for positive reform across the full breadth of the 2021 Plan - including energy, telecommunications and digital, transport and water sectors:

Waste and social infrastructure have also been included in the Australian Infrastructure Plan for the first time.

The Plan also includes three strategic focus areas that will be a sustained focus for Infrastructure Australia.

  • Place outcomes for communities,
  • Sustainability and resilience and
  • Industry productivity and innovation.

This focus is the product of the extensive consultation with more than 6,000 stakeholders across government, industry and the community to develop these reform recommendations.

I also want to acknowledge the many international infrastructure leaders, that have shared best practice with us.

The development of the 2021 Plan has been significant task– I want to thank the team, led by Mark Merrick.

A period of uncertainty

Our 2019 Australian Infrastructure Audit found that Australia is in an unprecedented period of uncertainty.

The 2019 Audit identified 180 challenges and opportunities for the infrastructure sector.

We also called out seven 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, that are transforming every part of our lives.

Of course, the pandemic further exacerbated this moment of uncertainty.

So in developing the 2021 Plan, we sought to understand the impacts of the pandemic on our infrastructure.

Impacts such as the largest net internal migration to our regions on record.

This driven both by people staying longer in regions, but also by people relocating.

Whether FIFO workers bringing their families to the Pilbara, or people taking advantage of digital flexibility and taking a job with them as they settle in a region, as we have seen through northern Tasmania, or relocate to holiday houses or towns, as we have seen on NSW South Coast.

This has lead to the growth of the incomes and wealth of people in regions and new pressures on access to and affordability of infrastructure services.

New patterns of work have shifted demand for internet, transport, water. energy, waste and social infrastructure from city centres to suburbs.

A trend which we think will be sticky as 1 in 10 workers have a desire to work from home 2-3 days a week permanently.  

Car usage has increased significantly due to health concerns about public transport .

Even in Perth, relatively untouched by the direct health impacts of the pandemic, public transport use is still 18% down on pre-COVID levels.

This will require governments to win back the hearts of would-be commuters.

A new focus should be given to flexible and adaptable infrastructure services, and embedding resilience and sustainability so infrastructure can withstand shocks and stresses

Allowing the sector to avoid a doubling of the annual cost of natural disasters – from $18 billion per year to more than $39 billion by 2050

New community expectations are being cemented that infrastructure should meet the needs of all Australians –regardless of whether they live in a large Fast-growing City, a Smaller City, Regional Centre or a rural or remote community.

A staged response

What has been clear to us from the outset, is that when it comes to infrastructure and its role in the pandemic recovery – a staged response is critical.

The first stage included to protect and maintain the pipeline.

The second stage was phased stimulus and remobilisation – meaning a focus on maintenance spending, program delivery and bringing projects forward where it made sense to do so.

The next stage involved the acceleration of investment, streamlining planning and statutory approvals and responding to changed market conditions.

With vaccine roll-out now ramping up, we have entered the final stage, adjusting to the new normal, which involves lasting, hard fought reform.

Reform to take us beyond short term stimulus to support a long-term national recovery by:

  • Enhancing productivity
  • Improving sustainability
  • Building resilience and
  • Encouraging innovation – particularly to deliver services that are more customer-focused, make better use of existing infrastructure and harness the vast opportunities afforded by data and digitalisation.

This focus on reform is critical as the industry begins to reach constraints in its ability to support a growing major project pipeline.

Major public infrastructure investment will peak at $52 billion in 2023.

Infrastructure investment is at record levels as a result of the Australian Government’s historic $110 billion spend over 10 years –

While this investment is substantial it represents only 1 in 10 infrastructure dollars, with states and territories committing the lion's share alongside private sector investors and holding the levers of reform.

The benefits of reform can be wide reaching: 1 in every $5 in the economy touches infrastructure and every dollar of public infrastructure investment can generate a four times multiplier on GDP.

So, we know this investment can underpin Australia’s economic recovery.

The opportunity for reform

Within this context, we see an opportunity for reform across the breadth of infrastructure sectors.

  • Reform that can unlock economic growth,
  • Support quality of life,
  • Preserve and enhance our environment
  • And, strengthen governance.

The Plan proposes wide-reaching reform:

From, unlocking the diverse opportunities of Australia’s unique cities and regions, to better valuing the economic contribution of social infrastructure, and enabling a step change in the productivity of the infrastructure sector itself.

Driving a step-change in productivity

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
  • Government investment 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, such as Canada and the UK
  • And, most importantly, supporting culture change – in partnership with industry, following the leadership of the Construction Industry Leadership Forum and the Construction Industry Culture Taskforce.

Reform is not about going it alone.

Its about identifying where there are opportunities or intractable challenges.

Learning from others.

Collaborating with across governments, communities and industry.

And adopting and leveraging best practice.

A new normal

The second reason to focus on reform is simply to seize the opportunity in front of us.

While the Delta variant is challenging our communities – and we are certainly attuned to the complexity of the public health response, the tragic loss of life and the impact on people’s livelihoods –

It is also true that Australia has also fared comparatively well in the global context,

And has an advantage – a head start – when it comes to the economic recovery.

While COVID continues to affect many communities, the number of infections remain relatively low.

Our vaccine roll-out is accelerating.

And, a plan for a staged reopening has been laid-out.

Compared to other OECD countries:

  • our economy has performed well
  • our infrastructure networks have proven to be relatively resilient
  • our service providers have shown that they can adapt to changing community needs

So while the impacts of COVID-19 have been devastating – they have also provided an opportunity to do things differently as we move to a new normal.

And in fact, the predicted two-year pause in net overseas migration – a major driver of infrastructure demand – provides a rare opportunity to play catch-up.

To implement reforms to support a higher and more consistent quality of life

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.

That means –

  • Ensuring our infrastructure can adapt to change, uncertainty and risk – we need a nationally consistent, systemic approach to understanding and quantifying risk, to ensure our assets, networks, systems, communities and places are resilient.
  • It means delivering public value – thinking beyond lowest cost, to better understand value for money supporting economic, social, environmental and governance outcomes across the community.
  • Helping our cities bounce back and growing quality of life – so looking at new ways to improve and support service delivery, including shifting to new service models that support our suburbs and people working from home.
  • Unlocking economic growth in our regions and Northern Australia – this can be achieved by leveraging the strengths of each ‘place’ and embedding better practices around planning and delivery to enable industry development and build great places to live.
  • Investing in transformative technology – we have a substantial opportunity to harness technology, innovation and digitalisation to grow new industries and drive service improvements.
  • Supporting informed choices around infrastructure use –  empowering Australians to make sustainable choices, balancing service quality, access and cost - particularly when it comes to waste, water, transport and energy.
  • And providing minimum service services levels – it is vital that we define acceptable minimum infrastructure standards for the smallest communities in Australia., including supporting the participation of local businesses, as well as indigenous people and businesses.

Concluding remarks

Through the 2021 Australian Infrastructure Plan, Infrastructure Australia has set an ambitious vision for reform:

We have identified the pragmatic actions and intermediate goals to support our vision.

We have identified the change agents to sponsor, lead and support change.

The time period for adoption.

The expected impact.

As well as the progress measures to track performance.

This approach will ensure we can get the most value of our planned investment and deliver infrastructure for a stronger Australia.

The challenge of progressing the reforms outlined in the 2021 Plan is a shared one.

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

Today’s launch of the 2021 Australian Infrastructure Plan is just the beginning –

Infrastructure Australia recognise publishing the plan is not the end but the start of a journey

Infrastructure Australia now move to more active process of championing the reforms in the Plan.

We urge the infrastructure sector to embrace the next stage, the adoption and implementation of reform.

This Plan is not change in itself, change will require collaboration and concerted effort from us all.

Thank you.