The Australian’s Judith Sloan has done a good job demolishing calls for more infrastructure, claiming it is the wrong solution for problems that could be easily addressed via reducing immigration:
Last week, when the board of the bank met in Darwin, governor Philip Lowe offered this advice: “It is appropriate to be thinking about further (infrastructure) investments, especially with interest rates at a record low, the economy having spare capacity and some of our existing infrastructure struggling to cope with ongoing population growth”…
There is a creeping naivety among many commentators that all infrastructure spending enhances productivity and that more infrastructure spending, particularly in the context of very low interest rates and a slowing economy, is desirable.
