Infrastructure Australia: Population pressures impossible to fix

By Leith van Onselen

Yesterday, Infrastructure Australia released a new report, entitled Planning Liveable Cities, which lambasted our governments’ intractable failure to cope with the last 15 years of extreme population growth.

The report identifies six holistic planning failures afflicting “Australia’s largest cities as they grow”:

Finding 1: Infrastructure delivery is struggling to keep pace with rapid population growth and change. Our largest cities are ‘playing catch up’ in delivering infrastructure to support population growth. In fast-growing cities, housing development tends to lead infrastructure delivery, making it difficult for governments to plan strategically for the long term  and meet the needs of growing communities.

Finding 2: Australia’s three-tiered governance structure can make it challenging to consistently deliver liveable places. Different levels of government have different responsibilities and priorities for delivering and maintaining infrastructure in our cities, which can  lead to fragmented decision-making and investment.

Finding 3: Sector-led infrastructure planning can lead to uncoordinated outcomes for communities. Governments are structured to deliver sectoral outcomes, such as transport, education, and health services, rather than ‘place’ outcomes. Sector-based governance structures, particularly at the state level, can lead to  siloed planning and infrastructure decision-making, inconsistent outcomes, and unintended consequences  for places and communities.

Finding 4: Communities are increasingly disappointed by their experience of growth. Communities are understandably resistant to growth when they witness development that is poorly designed and not accompanied by commensurate increases in infrastructure. Community trust in governments to deliver infrastructure and services in growing cities  is diminishing, as outcomes for a place are often  not well defined and communities can feel left out  of conversations about the future of their area.

Finding 5: Our infrastructure funding mechanisms have not kept pace with growth. There are limitations with the current funding mechanisms for timely delivery of local and state infrastructure. Funding mechanisms lack consistency  and transparency, and vary in their effectiveness as  a means of raising revenue. This creates uncertainty  for governments and industry.

Finding 6: Governments and industry lack a shared understanding of the capacity of different infrastructure networks. Governments and industry differ in their understanding of the current quality or performance, and projected growth and capacity across infrastructure networks in our cities. While the different levels and arms of Australia’s governments increasingly use common population assumptions, information about the available and potential capacity of infrastructure networks is often fragmented, resulting in uncoordinated decision-making and planning.

So according to Infrastructure Australia’s own admission, our federal system of three levels of government and entrenched vertical fiscal imbalances makes it practically impossible to build enough infrastructure to cope with the projected population deluge brought about by the mass immigration ‘Big Australia’ policy.

To overcome the structural impediments we will need a new constitution, a new financial system, a new private sector and a new social compact that allows a centrally planned tyrannical system like China’s. Otherwise we’ll be crush-loaded across all public services.

This is exactly the outcome predicted in Infrastructure Australia’s February modelling, which projected that traffic congestion and access to jobs, schools, hospitals and green space will all worsen as Sydney’s and Melbourne’s populations balloon to a projected 7.4 million and 7.3 million people respectively by 2046:

Amazingly, despite identifying these intractable and systemic failures, Infrastructure Australia never once mentions the obvious solution: slashing immigration to levels where infrastructure can keep pace.

Instead, Infrastructure Australia recommends more of same, only with better ‘planning’ to “rapidly increase the delivery of higher-density housing”, even though it explicitly notes that infill development is prohibitively expensive “due to the need to tunnel under existing structures or purchase land at higher costs” (i.e. classic ‘diseconomies of scale’):

Australia’s largest cities are growing and changing at an unprecedented rate… Between 2017 and 2047, Australia’s population is projected to increase by over 11 million people. Around 80% of this growth will occur in our five largest cities – Sydney, Melbourne, Brisbane, Perth and Adelaide…

The combination of the scale and pace of population growth set to occur in our cities poses material challenges for governments, industry, and the community…

Australian cities have not always accommodated growth well. Over the past decade, countless neighbourhoods have been redeveloped and densified without the necessary supporting infrastructure being delivered. This has led  to poor outcomes for both existing and new communities. Community apprehension towards further growth is understandable when their experience of past growth has largely amounted to reduced amenity, poor-quality design, and congestion and crowding…

Australian cities need to transform from ‘suburban’ cities into ‘urban’ cities… To support growth we will need to rapidly increase the delivery of higher-density housing… The sprawled nature and large area of Australian cities means that it is not desirable or affordable for governments to continue accommodating the projected population growth in new greenfield areas on the fringes…  This means governments at all levels need to focus on growing our cities up, rather than out…

Meeting the housing needs of a growing population  will require a significant shift across all Australian cities  towards delivering infill development… [But] delivering infrastructure for infill development presents governments with new challenges that our planning, funding, and governance arrangements were not designed to address. For example, construction of new infrastructure is often more expensive, due to the need to tunnel under existing structures or purchase land at higher costs. The small scale, incremental nature of growth in established areas can also lead to an over-reliance on existing infrastructure, which can result in congestion  and overcrowding…

While Infrastructure Australia has refused to say it explicitly, this latest report is yet another admission that Australia’s population pressures are impossible to fix.

So, rather than focusing on the supposed planning failures around housing and infrastructure, the federal government should focus on remedying the planning failure of running immigration at more than double the historical average:

Why waste time attempting to ‘plan’ in vein for 43 million people by 2046 when we can simply stop it from happening by slashing immigration with the stroke of a pen.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. It’s terrific that The Greens have been there to call out the stupidity and environmental suicide of the unsustainable population Ponzi run by the LNP and ALP. Great that they have spoken up for those in the inner city who are having their quality of life crushed. If it was not for the Green leadership, we’d be really stuffed as a nation as our ecological footprint would be massively larger and a downward pressure on wages and aggregate GDP would have us trapped in an economic death cycle.

    And then I woke up….

    • mild colonialMEMBER

      Why I’m no longer a Green. Canberra is growing at approximately 25,000 people a year, it was on the radio last week that Gungahlin grew by 24,000 in one year. and my local Greens MLA in a discussion last week with me put it at a challenging 8000 a year. Given we have a strong economy and NOM is 260,000 it makes sense that we’d be getting 10% of that. Plus some local population growth could be over 25,000 a year. I don’t know if Greens are complicit or they just believe rapidly dated ABS numbers but I will suggest to my MLA tomorrow that she’s holding political discussions with poor data to hand.

      • So with ACTEW privatised to ICON water we see the Murrumbidgee River corridor at a trickle, all those little streams in the Brindabella Mountains dry as a bone, blue green algae and strange coloured effluent in whatever water is left. What amazes me is the bloated and gargantuan ACT Government seem not to have consulted with local Councils like the Gold COast City Council on the problems urban infill pose with highrise development such as essential human survival commodities WATER, SEWER, ENERGY, SHADE, TEMPERATURE…where in fact they consult with the Chinese Government whom in their good nature have completely destroyed their own environment. One wonders how Canberra – the inland Gold Coast will fair when the next 48 degree summer hits and all those mega (mega in Australian standards if there are standards any more here) apartment buildings come online. All the best to those urban rats in Canberra that has gone from a once pleasant city and turned into urban infill megalopolis dry, dusty and dirty…and full of neoliberal and conservative rats whom infest the Australian Public Service and ACT Government.

  2. The young bloke wheeled out to econosplain this report yesterday made a half hearted attempt to say we need to balance the right level of immigration

    I wonder if deep down he just wanted to yell STOP THE PLAINS or maybe MORE PEOPLE? PLEASE EX-PLANE?

    Alleged Dr Demography has been quiet which is both a good thing and bad thing unless she’s been busy studying donuts (thank you thank you I’m here every Wednesday )

  3. there are no 3 levels of government in Australia.
    Councils are just businesses of state government which can (and does) takes over whenever it wants. In reality this happens between Federal and State governments, where federal government often takes over because power are poorly defined in our legal system.

    We live in an constitutional mess and the only reason why this country has been functioning to a degree in last 100 years is because the same elite rules at all government levels and makes agreements outside of the constitutional framework.

    • St JacquesMEMBER

      Abolish the friggin states. We no longer need these pseudo nations within a nation. They’re just an extra layer of bureaucracy and corrupt parliaments and facilitate buck passing between the state and federal levels, creating unnecessary complications in politics, law and administration.

      • I think what they are actually trying to say is that we have too much democracy. We need more central planning and ability to override local nimbys. We need to be a bit more like China, perhaps.

      • St JacquesMEMBER

        I was just using the discussion to have a go at the friggin states – they actually detract from democracy by confusing issues through the buck passing between state and federal levels which allows vested interests more space to game the political and administrative systems. But you’re right, they’re anti-nimby; because at heart nimbyism is the people trying to protect their communities from the vested interests that want to make a buck from raping and pillaging they’re local communities. So yeah, put “experts” in charge to reduce democracy and therefore make people powerless to protect themselves against the vested interests.

      • The Victorian government has done more for me then the FedGov ever has, why I vote to abolish my state when it’s the only stops brown shirts like Dutton running wild

      • The problem is not that we have state governments but that division of power between state and federal level is poorly defined so there is back and forth who should do what.
        Good thing about state government is that is more democratic because it’s more local and less detached from the constituency. ideally local government should have much more power because it’s easier to control by the people – politicians would have less power individually and would be local people known to neighbors. You can see your local councilor on the street and shout at him. On the other side having large cities makes that hard.

        The reason Iceland went through post GFC the way they did is because most of country’s population personal know large number of members of parliament (because one MP represents less than 5000 voters)

      • Agree! State governments well past their use by date, simply not needed in this day & age. Abolish them.

      • It’s much harder to abolish the States rather than just the States take back what was theirs.

        The Australian constitution draws its power from what is ceded to it from the States own constitutions. You will never get the States voting to extinguish themselves, well maybe but rent seeking will be tough.

        I say competitive federalism with a smaller federal govt. At least that gives us the option to see what works best and copy rather than 1 govt stuff it up all the time.

      • It is a struggle to see what could be done at the State level, that wouldn’t be done better at the Federal or Local Government level.

        That said, Switzerland has three levels of Government in a country 2/3 the size of Tasmania with 1/3 of our population, and they do OK…

      • It’s the state governments that are pushing back against the population ponzi. McGowen struck Perth off the regional visa scheme when he came to power because it was putting locals out of work. Today we have this from him about Scummo’s latest brain fart.

        “Premier Mark McGowan will warn Prime Minister Scott Morrison today that unless Canberra provides more cash for roads and hospitals, WA will not take migrants bound for congested Sydney and Melbourne.”

        If we abolished the states Scummo would be like Xi and do whatever he wanted and there would be no recourse.

  4. reusachtigeMEMBER

    There’s an easy and cheap solution to this. We bring in thousands and thousands of guest workers, like from guest worker homelands like Bangladesh, and pay them typical guest worker rates that way we can get loads of infrastructure built cheaply. To encourage their best efforts we can give permanent residency to the best performers after a few years.

    • Reus
      I agree, let’s bring in the 10M Chinese workers that built their roads and rail lines and pay them $1 per day to build, permanent residency – we could get to 34 million population in a year
      The whole banking system is going to fall apart and no one will have jobs in 7 years so let’s get the stuff built first

      • Hate to tell you but you won’t be getting Chinese infrastructure workers for a $ a day. They cost waaaay more than that! However if you guarantee residency you might have a done deal, but wifey, parents and kids need to be included.

  5. St JacquesMEMBER

    So an economy that’s powered by population growth will always be chasing its tail and falling behind in terms of infrastructure ((and services, among other things)) ?

    WELL DUH ! That’s why it’s called DUMB GROWTH, DUMMIES.

  6. As a very crude analogy, if infrastructure was a vehicle, in previous decades it was designed to carry say a 1 tonne payload. Eg a standard 1960’s falcon ute– did the job it was designed for reasonably well at the time. We are now asking it to carry a 3 tonne payload (ie we want it to be an 2018 F250), but we haven’t changed (in most cases cannot change) the inadequate underlying platform and it will progressively fail. Looking at infrastructure, our suburban roads were never designed for the stream of B doubles that emerge from every development site (have you noticed how Sydney’s road surfaces are visibly declining in quality?), the sewerage reticulation was never intended to handle the outflow from 30 storey towers, the 2 track rail networks will never handle the demand from commuters that will stream from the new towers being built along the lines (think Cronulla – Caringbah – Miranda – Sutherland). Not to mention schools, hospitals, fire stations, recreation areas. I could go on and on. Absolute madness, and the long term costs (Which will be eye-watering) have never been included in the benefit / cost of immigration.
    So why is it happening? Who benefits?

    • “A bridge, under its usual conditions of service, behaves simply as a relatively smooth level surface on which vehicles can move. Only when we overload it do we learn the physical properties of the materials from which it is constructed.” – Herb Simon

  7. just imagine how bad it would have been if previous generation didn’t gold plate every piece of infrastructure they ever built

    Harbour bridge would have been built with a single car lane each way if our current business case ideology has been used back than and John Bradfield would have been thrown in jail for wasting public money

  8. Our economy is fuelled by population growth which means we will always be playing infrastructure catch up…
    Great Ders of History #4586

  9. Building infrastructure for cities just results in more debt for no production. We will have to sell more of our externally facing and key industries to foreigners to finance infrastructure.
    There is no way out. The answers lie back in time.

  10. I am residing to the fact that both major parties are not going to cut the immigration intake. Even if we vote PHON or SAP.
    Sadly I feel that we just need to accept this and go on accepting the trashing of our suburbs with cheap apartments all sold off to foreign investors. Its sad and really depressing.