Alan Kohler has a nice wrap on the consequences of Australia’s people ponzi today:
Last year Australia’s population grew 1.8 per cent, or 407,000, compared with 0.7 per cent for the United States, 0.5 per cent for Europe and China, and minus 0.1 per cent for Japan.
…Not enough infrastructure is being built…to the point where a national emergency is approaching.
There is far too much focus on politically motivated big ticket infrastructure projects that soak up the available funding, and not enough on what you might call business as usual infrastructure.
Infrastructure Australia was set up in 2008 to organise and prioritise infrastructure spending but six years later the CEO, Michael Deegan has written a deeply frustrated submission to a Senate inquiry, declaring: “there is an air of unreality about our infrastructure planning.”
The inquiry, by the way, is into the “Infrastructure Australia Amendment Bill 2013”, which basically seems designed to scrap IA and start again. Deegan says the bill will make IA less independent; the Minister for Infrastructure and Regional Development, Warren Truss says it will make it more independent but it doesn’t look that way.
Says Deegan: “several provisions in the Bill considerably broaden the power of a Minister to give specific directions to Infrastructure Australia in areas that are at the core of the organisation’s responsibilities, so independence is not in fact conferred.”
..IA should be given the sort of independence that the RBA has.
This is not new but hopefully it will gather momentum. Gutting IA and giving the Abbott Government a free hand to doll out pork is not in anyone’s interest, not least because infrastructure should be a key mechanism for easing Australia’s post-mining boom adjustment. If the wrong projects are pursued then the money is spent with no improvement to productivity meaning the underlying adjustment to Australian competitiveness has to be achieved through the far more painful channels of falling real incomes and fewer jobs.
