2019 AFR National Infrastructure Summit
12 June 2019
Good morning everyone. Thank you for that kind introduction, and to our hosts, the AFR and Deloitte, for inviting me to speak here today.
I want to acknowledge the Minister for Minister for Population, Cities and Urban Infrastructure the Hon. Alan Tudge MP and all our distinguished guests from across government, industry and the community.
And importantly too, I want to acknowledge the traditional custodians of the land in which we meet here today, and pay respect to the elders, past and present, of all Australia’s Aboriginal and Torres Strait Islander peoples.
It is an honour to speak at this year’s Infrastructure Summit, particularly as this is my first major speaking engagement since commencing as Chief Executive of Infrastructure Australia.
For those who aren’t familiar with us, Infrastructure Australia was established to provide advice on the investments and reforms needed to deliver better infrastructure for all Australians.
It’s an organisation that I am incredibly passionate about, and proud to be leading.
I’ve joined Infrastructure Australia after 13 years leading the Green Building Council.
As you would expect, I am excited to build on the work Infrastructure Australia has already done around resilience and sustainability in the infrastructure sector, but what really drives me is the broader opportunity to improve quality of life for each and every Australian.
We all know that infrastructure is central to our quality of life and the economic productivity of the country.
And when it comes to the infrastructure people rely on, and how these services are delivered, Australians have told us what matters most.
It comes down to three things—access, quality and cost.
But unfortunately too often, our infrastructure doesn’t meet these expectations.
Congestion, overcrowding, rising bills, outages and declining service standards are undermining confidence in our infrastructure.
These are also clear signals that our infrastructure needs to work harder to support Australia into the future.
These signals also come at a time of significant change for Australia.
We are facing climatic and weather extremes, a re-ordering of the world economy, and a reshaping of global institutions and norms.
Closer to home, the structure of Australia’s economy is shifting, our population is growing and changing and rapid technological advancements are fundamentally reshaping our day-to-day lives.
We are at a unique point in our history, and this has significant implications for how we plan for Australia’s infrastructure.
Today, I will outline some of the future trends that will play a decisive role in how Australia grows and changes over the next 15 years and beyond.
I will also talk about how the needs of the community are evolving, and why we need to re-think how we deliver infrastructure, and adapt existing networks to our changing needs.
Finally, I will provide an insight into our next major release, the 2019 Australian Infrastructure Audit.
Due to be published later this year, the 2019 Audit will present a forward-looking view of Australia’s infrastructure challenges and opportunities. We will deliver the reform solutions to those challenges and opportunities in the Australian Infrastructure Plan, due to be delivered in the next 12-18 months.
It’s the second Audit Infrastructure Australia has undertaken, after the first was published in 2015, and outlines a community-centred approach to infrastructure planning and delivery—focusing on the three key measures of access, quality and cost.
With the needs of the community at its heart, the Audit will provide a clear picture of the problems we need to solve, and strengthen the evidence base for infrastructure decision-making across Australia.
I will talk more about what you can expect from the Audit shortly, but first I want to speak briefly about the role of Infrastructure Australia.
Australia as a leader in infrastructure
We were established to shine a light on the most pressing opportunities for investment and reform.
The decision to create an independent body, charged with driving best practice across the infrastructure sector, was a visionary one.
It is important to acknowledge the contribution of our former leaders: Sir Rod Eddington, Michael Deegan, Mark Birrell and Philip Davies, as well as our Chair Julieanne Alroe and Anna Chau, who was acting Chief Executive for the better part of the last 12 months.
It’s easy to forget that Infrastructure Australia was the first of its kind globally.
There was no precedent, and no model, for how an organisation like ours could build a national consensus on where to focus infrastructure investment and reform.
Certainly, Infrastructure Australia has evolved considerably over time, and at times been caught in the political crossfire.
But we have also shown how an independent body, elevated above federal-state funding battles, can act as an advisor and advocate on the pathway to reform.
Today, there are independent infrastructure bodies in almost every Australian state and territory.
The establishment of these bodies around the country has supported stronger state-based collaboration, and driven better performance across infrastructure planning, project development and service delivery.
This is something Australia should be proud of, and something we need to remain focused on.
Delivering the infrastructure our communities need requires true collaboration—across sectors, across different levels of government, and across party lines.
It’s my aim that Infrastructure Australia continues to drive this, and be seen as a valued collaborator with our stakeholders across government, industry and the community.
This is particularly important in light of the period of significant change we find ourselves in.
I want to turn my attention now to the broader context of change that will affect how Australia grows over the next 15 years and beyond—beginning with the economy.
Australia has enjoyed a record-breaking 28 years of uninterrupted economic growth.
By building on our industry strengths and capitalising on our proximity to emerging markets in Asia, we have been fortunate enough to avoid the economic crises that have affected other countries.
However, our national productivity and global competitiveness relies on the quality of our infrastructure networks, and there are signs that we are falling behind.
While government revenue has largely recovered from the Global Financial Crisis, a growing and ageing population is constraining government budgets.
Changing and growing demand, and a mounting maintenance backlog is putting significant pressure on existing infrastructure.
At the same time, Australia’s economy is undergoing structural shifts, as we move away from manufacturing and resources towards knowledge and service-based industries.
These structural changes to the economy are also having spatial implications, and Australia’s economy is becoming increasingly urbanised with most jobs now located in our larger cities.
Australia now effectively has a multi-tier economy, characterised by:
Rapid economic growth in our fast-growing cities and their surrounding regions
Moderate economic growth, consolidation and specialisation in smaller cities and regional centres, and
Stabilising or declining economic growth in rural and remote areas.
In 2017-18, Sydney and Melbourne alone accounted for half of our national economic growth.
Infrastructure investment is playing a huge role in facilitating this, with the NSW and Victorian governments together spending upwards of $78 billion on transport infrastructure.
Of course, this also reflects the scale of population growth projected for our largest cities, which will play a decisive role in shaping our country in coming years.
By 2034, Australia’s population will grow by 24% to reach 31 million, with more than three quarters of this growth projected to occur in Sydney, Melbourne, Brisbane and Perth.
This offers enormous economic opportunities, but the risk is that our infrastructure fails to keep pace with demand—impacting productivity, quality of life and the world-renowned liveability of our cities.
I look forward to talking further about how congestion impacts the liveability of our cities in this morning’s panel session on population growth.
However, before I move on, I want to note that the 2019 Audit presents congestion in our fast growing cities as a major barrier to quality of life and the economic prosperity of our communities.
Another factor that will play a decisive role in coming years is rapid technological change.
While technology has underpinned substantial progress over the past century, the speed of change today and its impact on the way we live and work, is unprecedented.
Technology is now deeply embedded in modern Australian life.
And whether it be 5G mobile technology, on-demand transport, automated and connected vehicles, drones, artificial intelligence, virtual and augmented reality, genomics, telehealth or digital education, to name just a few, there is no sector untouched by its continuing advancements.
The benefits are immense—from improving quality of life and providing better access to services, to enhancing the efficiency of our infrastructure and developing brand new industries.
For example, ride-sharing services and on-demand public transport in our cities offer users greater flexibility, choice and convenience than ever before, while extending the reach of legacy networks to poorly serviced areas—particularly on the urban fringe.
However, the pace of change also creates challenges for the way we plan, design and deliver infrastructure, and Australia has not always been on the front foot in this regard.
For instance, Australian governments have been slow to establish planning controls or network standards to support widespread public charging networks for electric vehicles.
New technologies often push boundaries before controlling legislation is developed or even the need for it is recognised, however there is also often a need for policy or investment to ensure that we gain maximum benefit from new and emerging technologies.
We also need to be wary of the fact that rapidly changing technology risks leaving some sections of the community behind.
Many advances in services are being driven in areas with the highest levels of concentrated demand and commercial viability—fast-growing cities and—to a lesser extent—smaller cities and regional centres.
Given the scale of growth in inner urban areas of fast-growing cities, and the rollout of technologies that are likely to be heavily reliant on private markets, there is a risk of a growing gap between outcomes received by users based on their location.
Future trends—Changing community expectations
One of the key impacts of technology is that Australians increasingly want more choice and flexibility in the services they receive—which brings me to the last major shift I will be discussing today, which is changing community expectations.
Australians are living increasingly connected and digital lives.
We are engaging more with the world around us, and we are also expecting more as well.
The expectations we place on governments, institutions, services and products are changing, and this has significant impacts when it comes to meeting future infrastructure needs.
While the digital economy has brought greater choice and flexibility in services, sustainability, ethical production and wellbeing are also becoming higher priorities for many Australians.
Data is a really illustrative example of the way community expectations are changing, and in fact driving innovation in service delivery.
Demand for greater information transparency has encouraged businesses and governments to give people more choice over how their information is gathered, stored and used.
Businesses, including those in the retail and banking sectors, are increasingly capturing and using data to create more tailored experiences for customers.
At the same time, open source data is allowing the community to create new solutions to address user preferences and improve quality of life for all, such as mapping the most convenient route through a city by wheelchair or with a pram.
Australia’s unique geography brings an added layer of complexity to this shifting of community expectations.
While Australia has evolved as a federated country of eight states and territories, these boundaries bear little relevance for the different needs of people in each jurisdiction.
However, it is the scale of each city, town and community that provides a better starting point in understanding the needs of infrastructure users.
As I mentioned earlier, we know that all Australians share common needs for infrastructure to be accessible, affordable and high-quality.
Research we have undertaken as part of our Australian Infrastructure 2019 Audit shows Australians are living incredibly diverse experiences when it comes to the accessibility, quality and cost of infrastructure.
In other words, our infrastructure needs differ greatly between people, places and industries.
Overall, our Audit has found that communities care most about access to affordable, quality health care and essential services.
For people living outside our capital cities, employment opportunities and regional development are seen as higher priorities.
Across all parts of Australia, users feel infrastructure is adding to cost of living pressures.
Many users identified energy affordability as a particular concern, but other sectors also place a significant impost on users.
I ask the audience today how much they spend on infrastructure each week or year?
The average household spends over $300 each week on infrastructure—or $16,000 annually.
That may not be much to some, but these costs comprise almost a third of total disposable income for lower income earners.
It is also important to recognise that not everyone is empowered by the trends I’ve just described.
Communities with less access to new technologies, either due to physical or financial constraints, struggle to engage with new ways of delivering products and services.
For example, there is evidence that older generations or culturally and linguistically diverse Australians are finding it more difficult to engage with new technologies and risk missing out on the benefits these developments offer.
Given the major shifts I have just outlined, our infrastructure planning must do more to put the needs of the community first.
Importance of community-centred focus
Infrastructure Australia has been a strong advocate for reforms that put the community first, and our 2019 Audit continues this focus.
Importantly, the Audit seeks to provide a detailed overview of our infrastructure that is relevant and easily accessible to all Australians.
We have adopted this approach to enable everyone—from industry experts to members of the community—to access a common set of evidence and analysis.
And whether you are reading it from the perspective of government, industry or the community—this Audit is intended to provoke robust discussion about the future of Australia’s infrastructure.
For example, one of the challenges we highlight is that reporting on infrastructure does not adequately reflect community experiences, and does not consistently measure performance against outcomes that matter to users—that is access, quality and cost.
Across many parts of the country, and most sectors, there is a lack of reliable and user-focused information.
This makes tracking progress against these user-focused outcomes difficult.
It also means that decisions may fail to focus on the long-term interests of users, or may not accurately project changes in demand.
This makes assessing the performance of assets, networks and services difficult, and limits our ability to make informed choices about the infrastructure we use.
Without this information, how can we track the impacts of infrastructure on the wellbeing of communities over time?
This is an issue across all sectors, and impacts our ability to deliver long-term benefits for our communities—which is all the more important given the significant period of change I have just outlined.
Thank you once again to the AFR and Deloitte, for inviting me to speak here today, on the key challenges emerging in infrastructure over the next 15 years and beyond, and our forthcoming release, the 2019 Australian Infrastructure Audit.
Today, I have merely scratched the surface on some of the decisive trends that will shape Australia’s future, and the need to adopt a community-centred approach to guide decision-making on infrastructure planning and delivery.
Infrastructure Australia has a mandate to drive better infrastructure outcomes for all Australians.
We want to see support by government for infrastructure to respond to what matters most to communities—access, quality and cost.
Sustained reform and additional investment is critical to help meet these needs.
The 2019 Audit will help guide this, and we are excited to share it with you in coming months.
We hope it sharpens decision-making on the impacts of infrastructure on the community, and the role it can play in bringing about real improvements in quality of life across the nation.
It is critical that our governing bodies and decision-makers are always planning for the future and evolving to meet the challenges ahead.
Great infrastructure can improve the lives of all Australians, including driving economic outcomes, but this will only be achieved if community outcomes are front and centre.