Infrastructure falls further behind as migrants crush-load cities

By Leith van Onselen

Australia’s infrastructure deficit is now projected to be around $800 billion, according to The Australian:

Engineers Australia last year estimated the infrastructure deficit — classified as the amount needed to bring the nation up to scratch — at $800bn. Infrastructure Partnerships Australia (IPA), the private think tank, has put the figure at $770bn….

Eight of the top nine projects identified by Infrastructure Australia as being a ‘high priority’ are designed to ease urban congestion, which is a growing problem in the nation’s expanding city centres…

Blind Freddy can see that this infrastructure deficit has arisen because Australia’s population growth was ramped-up from the early-2000s via the massive increase in immigration – a situation that is projected to continue indefinitely:

Yet, despite the massive recent increase in investment across Australia’s major cities, the infrastructure deficit continues to worsen, as noted by planning expert Prof Michael Buxton of RMIT’s Centre for Urban Research:

Melbourne’s infrastructure building program doesn’t go far enough, a professor of urban planning has warned…

Prof Buxton, of RMIT’s Centre for Urban Research, said Melbourne was playing catch-up and could not keep pace with population growth…

Of the current building projects, he said: “There’s certainly a lot happening, but it’s all catch-up.

“And the rate we are going, we are never going to catch up with the need. While it’s important work, it’s nowhere near the level of infrastructure building that we need,’’ he said…

Last month, Infrastructure Australia released a report entitled Planning Liveable Cities, which lambasted our governments’ intractable failure to cope with the last 15 years of extreme population growth. The report also admitted that Australia’s 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.

Specifically, Infrastructure Australia identified 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 basically, to overcome the structural impediments Australia 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!

Indeed, 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 (let alone to around 10 million people respectively by 2066, as projected by the ABS):

Clearly, the only viable solution to mitigate Australia’s infrastructure and liveability pressures is to dramatically lower immigration (population growth) back to historical levels.

Why waste time attempting to ‘plan’ in vein for 43 million people by 2066 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. reusachtigeMEMBER

    It’s not really an issue. All governments need to do is build enough infrastructure to accommodate lots more freshly imported vibrants and it will be aok.

  2. I think our “apartments for international investors” market is toast.

    Chinese buyers more concerned about falling prices than Opal Tower problems – AFR
    “While there is limited Chinese buyer reaction to Opal, local Chinese media reports show many have little faith in how Australian real estate “system” owners will compensate owners in a case like Opal. Chinese buyers acquired a large number of apartments in Australia in the housing boom of 2012-2017″

    Betting big on apartment boom could prove disastrous for buyers – AFR
    “Now, after years of warnings from industry pundits about unsustainable growth in the property market [WTF!!] and the risk of what would happen in a credit squeeze the final blow came from the industry itself on the most basic issue of all, building quality.”

    Construction industry faces ‘screeching halt’ over cladding risk – AFR.
    “The combustible cladding crisis has left Australian building surveyors struggling to find compliant professional indemnity insurance, in a development that industry sources warn could bring the construction industry to a “screeching halt””

    • “…. real estate “system” owners will compensate owners …”

      i.e. where is the taxpayer funded bailout for greedy Chinese speculators? It’s our duty to bail out our Chinese brethren!

    • “Now, after years of warnings from industry pundits about unsustainable growth in the property market [WTF!!]

      YEAH!!!! Name one or more warnings from industry pundits that the AFR have reported! bwahahahaaaaa!
      However note this is the future. Lie! Shift the blame! Hoocoodanode??? Every damned piece of dishonesty about this including dishonesty about the proper solutions.
      What a mess!!!!!

  3. Strange Economics of Vampire industries

    “Plan in Vein” – yes the Dracula FIRE industry…

    Incidentally Endgineers Australia have been big boosters of immigaration, getting 4k a person to recommend, even though there is no real skill shortage.

  4. thinking is simple:
    to avoid using spare capacity of the existing infrastructure we would need to build infrastructure (water supply and sewage, roads, public transport, hospitals, schools, …) equivalent to building a new city with 250k new homes housing 450k people every year?
    how much would that cost?
    How much it would costs to rebuild all Newcastle infrastructure (roads, rail tracks, hospitals, schools, … buy buses, trains, dams, pipes, cables, … ) from scratch in a year?

    would 10 billion we spend per year be enough?
    or more something like $50b or $100b

    luckily we gold-plated everything in the past so there is spare capacity in the existing infrastructure
    imagine if they built 2 lane Harbour Bridge to meet the needs back in the days

    • you might have made this point in the past but I’ve been using it to friends over the holiday period – “imagine if we hadn’t gold plated infrastructure in the pre war period?”

      We need to re-install the tram network – just get the map of what it looked like in the 50s. But just re-install it on top of the road – I I don’t know why we have to dig the road up to lay tracks. That’s what is taking all the time.

      • those lines aren’t electrified are they? I though these new trams were battery powered?

        okay, then bring back cable cars. The old tram between rushcutters bay and woollahra was a cable car. the cable car tow room was right next to that hotel in rushcutters.

        battery powered FTW!

      • By setting the rails into the road, it is possible for other vehicles to easily cross over the tram tracks.

    • We’re already running a chronic and severe CAD that involves seeling most of our resources and core businesses to foreigners. Imagine what he effect would be of such a programne.

  5. This number is probably undercooked. Where are they building the new beaches to take the pressure off Bondi, Coogee, etc?

  6. None of it will be built. Australia has already sucked in well over a trillion dollars to create the property bubble.

  7. Labor policy is all about massive spending on ‘infrastructure’ to cater for big Australia/more migrants.
    It worked for them in the Victoria State election.
    And the Liberals got smashed by the Labor.
    And part of that was the facile promise of ‘Make work jobs for migrants, including even more migrants to brought in for the make work’ !

    Ok – so if it’s a $800 billion infrastructure deficit as per the article / 15,000,000 taxpayers = $53k each in today’s dollars.
    That’s most likely $100k for each Australia taxpayer / user pays, borrowings / whatever funding & inflation & interest plus blowout over a 10 year period.
    Especially if the migrant numbers – mostly the TR overshoot continues to accelerate.

    We have 1.9 million new migrants (1.9 million citizen/ PR grants in the last decade) who are mostly unskilled (73% are unskilled or dependents) & many not assimilating (10 years in Australia no English) and their incomes are low so their tax contribution to any of this infrastructure will be low.

    With Welfare, Centrelink Medicare & other assimilation costs, they already are – and will remain tax contribution negative for the decades – especially as they age, & the real cost of family reunion & other non assimilation & productivity impacts kick in. Stuck with that burden.

    In addition to these1.9 million PR, we have onshore in Australia another 2.4 million Temporary Residents (TR) and an estimated 440k Tourist Visitors Working lllegally (TVWI being at least 5% of the 8.8 million tourist visitors yearly : ABF).

    In this 2.8 million TR & TVWI number, we have a very high ratio of visa breach, with over 1.4 million working in Fake ID, ABN, labor rings, cash in hand etc.
    (Detailed in this forum before including Dec 2018 numbers which are alarming in growth). And their tax contribution is even lower than the 1.9 million PR.

    So where will the tax & user pays burden fall for this $800 billion infrastructure cost?

    On muggins Australians.

    Lower & middle income families, couples, singles.

    Well over $100k+ per person over the next 10 years.

    Labor is conditioning Australia that massive infrastructure projects are needed to ‘catch up and ‘cope with’ future immigration demand.

    The simpler answer as MB outlines is to shut down immigration (PR) – but that in itself does nothing as the PR yearly intake of 190k or so is only tiny fraction of the issue.

    We ALSO need to aggressively exit at least 1.4 million TR & TV migrant guestworkers in blatant pretext visas or breach, only here to live & work illegally.
    That’s equivalent to 7.5 years of negative PR intake.

    🔹🔹That ‘Unwinds the migrant overshoot’🔹🔹

    That would allow our infrastructure to ‘catch up & cope with’ a sustainable population with a higher quality of life, reduced congestion & the population right sized to the infrastructure we already have.

    Particularly in Sydney & Melbourne. As example.
    We have 2.4 million TR & 440k TVWI (Tourist Visa Working Illegally) = 2.8 million in total.
    The vast majority third world adult unskilled on visa pretexts – with a 90% concentration or 2.5 million in just Sydney & Melbourne.

    🔻1.4 million TR & TVWI are in Sydney (1 in 4 people)
    🔻1.1 million in Melbourne (1 in 5 people)
    🔻300k elsewhere, mostly other cities in mini me migrant slum enclaves.

    At least 1.4 million of these 2.8 million TR & TVWI are in visa breach / outlined in detail in this forum before.

    🔹🔹Unwind the migrant overshoot🔹🔹

    Imagine.. if you can, a Sydney or Melbourne cleansed of 1.4 million unskilled third world migrant guestworkers in visa breach.
    Just by enforcement of existing visa rules.

    ▫️That’s at least 300,000 ex Australian dwellings migrant guestworkers occupied – now restored back to Australian use. 6 years supply.
    Enough to house the 116,000 Australian permanent homeless and the 350,000 seeking affordable housing.

    ▫️That’s 1.4 million less users of our public transport system & infrastructure.

    ▫️That’s 250,000 cars off the road mostly in our cities.

    ▫️That’s 1.4 million migrant guestworkers who see steal at least 1 million FTE equivalent Australia jobs, fake ID paying little or no tax, cash in hand.
    All those jobs can be taken up by Australian unemployed & seeking work which includes a huge ratio of legal migrant PR unemployed.

    ▫️Our unemployment tax bill go down, wages go up and our ‘legal tax intake’ goes up.

    ▫️Major infrastructure projects would be scrapped.
    Our population would be right sized for the infrastructure we have which is quite adequate for the Australian population ‘sans’ the illegal migrant overload.

    That’s a 23.6 million Australia, not 25 million.

    That’s a far more sensible population & infrastructure plan, but both major party are in tunnel vision thinking a ‘Big Australia Infrastructure Make Work’ will capture the migrant & worker swing vote.

    Well the 2.8 million TR & illegally working Tourists work / steal jobs, but they don’t vote.
    Many of the 1.9 million PR who exploit our welfare & healthcare don’t vote as they remain sole passport China First 🇨🇳, India First 🇮🇳.

    The other PR anecdotally want migrant intake reductions and massive crackdown on the migrant TR. They say the migrant TR guestworkers erode their jobs, steal their housing & congest public & transport services.
    So it may actually be a vote winner in the migrant PR and now citizen voter base to exit at least 1.4 million TR & TVWI in visa breach.

    The Australian born generally have had a gutful.

    Our young people denied employment, wages decline, education sold out as a migrant guestworker visa alibi and any chance of home ownership destroyed by the migrant influx. Cost of living thru the roof, mass white flight & eviction if not ethnic cleansing of Australia’s out of their housing onto the street as the foreign dirry money moved in & converted their Australia dwellings & now whole districts & suburbs into migrant only sublet cash in hand bunk share slums.
    So a vote winner there.

    The eco greens surely would see this is less damaging to our environment & global emissions, every third world migrant guestworker who enters Australian & lives in a higher emissions economy creates an extra impact. We could probably meet our emissions targets & not need new dams or power stations just by exiting the 1.4 million TR & TVW in visa breach.

    And morally & ethically it’s the right thing to do.
    These 1.4 million migrant TR & TVWI are in visa breach or on visa pretexts. Many are breaking the law, their conditions of entry. Their behaviour, fraud, vice, job & tax theft, living illegally and other criminal acts would not be tolerated in their home country or any other country either.

    🔹🔹🔹Unwind the Migrant Overshoot.🔹🔹🔹
    Exit at least 1.4 million TR/TVWI illegals.
    Back to 23.5 million. Right Sized Australia.