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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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.