You can’t love mass immigration and hate costly infrastructure

By Leith van Onselen

Yesterday, Fairfax published an alarming report warning that Melbournians will have an extra five hours of peak our traffic congestion by 2030 as rapid population growth continues to overrun the city’s infrastructure:

Drivers could spend 20 per cent more time sitting in traffic as congestion significantly worsens over the next 12 years, modeling released by Infrastructure Victoria has revealed.

The evening peak period will start as early as 2.30pm and end as late as 8.30pm in Melbourne’s outer suburbs, as the daily distances that people travel grows by 25 per cent.

And while the roads will be clogged, so too will the trains on key suburban lines, despite the government spending $11 billion on the Melbourne Metro Tunnel…

Roberto Evangelio, the director of the data analysis underpinning the report, said the system was under enormous pressure…

This report basically confirms Infrastructure Australia’s recent study, which found that both Melbourne’s and Sydney’s living standards will be crushed as their populations surge to 7.3 million and 7.4 million by 2046, with worsening congestion and reduced access to jobs, hospitals, schools and green space:

On the same day, vocal mass immigration booster, Peter Martin, penned a contradictory article decrying the costly infrastructure projects being built across Melbourne and Sydney, and arguing that we should simply stop building infrastructure:

I am going to say it. We are spending too much on infrastructure – on roads, railways, bridges and the like…

You probably disagree, especially if you are waiting for a train, or in a car with a driver who is stuck in traffic…

…it is not enough to say that roads are congested, or that things could be better. If roads were never congested, we would have spent too much. Without commercial discipline, governments need to conduct cost-benefit studies to determine what’s value for money. They are imperfect, but they are no good if they are ignored.

During the 2016 federal election the Coalition committed to 21 transport infrastructure projects, each costing more than $100 million; only five had been approved by Infrastructure Australia. Labor committed to 28; only one had been approved by Infrastructure Australia.

Often it’s better to do nothing, or little…

It’s fair enough to question the validity of infrastructure projects – MB has done so continually. But it is highly hypocritical of Peter Martin to strongly endorse crush-loading Sydney and Melbourne via mass immigration while at the same time whinging over the expensive infrastructure investment required to accommodate this growth.

What Peter Martin continually fails to mention is that the cost of infrastructure projects in Sydney and Melbourne will continue to spiral as long as these cities grow by 90,000 to 100,000-plus people a year, primarily via mass immigration, and these cities grow to more than 8 million people:

The reason is simple: in already built-out cities like Sydney and Melbourne, the cost of retrofitting new infrastructure to accommodate greater population densities is prohibitively expensive because of the need for land buy-backs, tunnelling, as well as disruptions to existing infrastructure. These are basic dis-economies of scale.

But don’t just take my word for it.

In November 2013, the Productivity Commission (PC) released its final report on An Ageing Australia: Preparing for the Future, which projected that Australia’s population would swell to 38 million people by 2060 (let alone 40 million as projected currently) and warned that total private and public investment requirements over the 50 year period are estimated to be more than 5 times the cumulative investment made over the last half century:

ScreenHunter_15679 Oct. 25 14.39

The Productivity Commission’s (PC) 2016 Migrant Intake into Australia report explicitly noted that infrastructure will have to increase to accommodate a bigger population, and that this infrastructure will necessarily be expensive:

A larger population inevitably requires more investment in infrastructure, and who pays for this will depend on how this investment is funded (by users or by taxpayers). Physical constraints in major cities make the costs of expanding infrastructure more expensive, so even if a user-pays model is adopted, a higher population is very likely to impose a higher cost of living for people already residing in these major cities.

…governments have not demonstrated a high degree of competence in infrastructure planning and investment. Funding will inevitably be borne by the Australian community either through user-pays fees or general taxation…

Whereas, the PC’s recent Shifting the Dial: 5 year productivity review explicitly noted that infrastructure costs will inevitably balloon due to our cities’ rapidly growing populations:

Growing populations will place pressure on already strained transport systems… Yet available choices for new investments are constrained by the increasingly limited availability of unutilised land. Costs of new transport structures have risen accordingly, with new developments (for example WestConnex) requiring land reclamation, costly compensation arrangements, or otherwise more expensive alternatives (such as tunnels).

Clearly, the most obvious and least cost policy solution to mitigate Sydney’s and Melbourne’s infrastructure woes is to significantly dial back Australia’s immigration program and forestall the need for costly new infrastructure projects in the first place.

You can’t love mass immigration and then whine about expensive infrastructure projects. They are one and the same.

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Unconventional Economist
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  1. Here’s the solution.

    If you’re not already, become a union member.

    Make resolutions, second, and vote to condemn population growth.

    Labor will have to follow.

  2. The answer to this is quite obvious. We have been instructed by the “rest of the world” to massively increase our population. The “rest of the world” haven’t yet given us any instructions about infrastructure. Peter Martin sees this, and is pointing out that we should do nothing until we get our orders.

    • Martin (“The rest of the world has granted us a licence to use this continent on the implicit understanding that we populate it”) apparently hates incumbent Australians and wants us all to endure lower and lower living standards. Maybe he was the kid at school nobody liked and this is his attempt at revenge.

  3. This Martin fella is clearly conflicted and utterly demented. Zero self awareness or just having a bob each way to keep his future employment options open. Probably the latter. I wonder the looks if he and Mr Gittins cross paths.

  4. Someone should monitor Martin’s meds. He’s been pushing some very strange ideas and arguments recently.