Morrison Government admits “we don’t do infrastructure well”

In the 20 years before COVID hit, Australia’s population increased by 6.5 million people, with Sydney and Melbourne each adding around 1.6 million and 1.8 million people respectively over that time.

The experience on the ground was infrastructure bottlenecks, rising congestion, and reduced livability as our major cities were crush-loaded by the extreme population growth.

Treasury’s latest Intergenerational Report (IGR) projects that Australia’s population will grow by a whopping 13.1 million people (~50%) over the next 40 years to 38.8 million people – double the growth experienced over 20 years to COVID. This would be the equivalent of adding another Sydney, Melbourne plus Brisbane to Australia’s existing population.

Moreover, the IGR projects that 74% of this population growth will come directly from net overseas migration (NOM), which has been projected to increase to 235,000 annually from 2025-26 onwards. Although in reality nearly all of our population growth will come from NOM, since migrant children are counted as ‘natural increase’, and if they don’t arrive we don’t get their children.

Obviously, adding 13.1 million people to Australia’s current population will require the biggest and fastest infrastructure build-out that the nation has ever seen, And if this fails – as it did over the past 20 years – living standards will be badly eroded.

Sadly, neither the Morrison Government nor industry is confident that they can deliver on infrastructure:

14 [construction] bodies have written to a federal parliamentary committee calling for urgent ­action… According to the signatories, the construction industry is wracked with insolvencies, poor mental health, [and] woeful productivity…

The chief executive of the Australian Constructors Association, Jon Davies, whose body represents top-tier companies that construct and service the majority of mega projects, said the federal government “is essentially relying on a broken industry to rebuild the economy”…

“It is wasting taxpayers’ money and putting at risk timely delivery of the record pipeline of infrastructure projects”…

A senior Morrison government source conceded infrastructure outcomes had been poor, citing blowouts and delays in Victoria and Queensland, and argued better pricing signals, workforce ­development and collaboration were required.

“We don’t do infrastructure well in this country, but we have an opportunity to address those ­issues across all levels of government,” the source said.

The IGR explicitly warned that Australia’s immigration intake needs to be at a level that is “at or below the capacity” of destination cities to absorb them, and requires “careful planning by all levels of government”:

The economic and social pressures and capacity constraints that result from an inward flow of migrants also need to be managed carefully. Migration should be kept at or below the capacity of the destination city or region to absorb new migrants, taking into account impacts on incumbent populations…

Governments at all levels need to ensure that planning and infrastructure provision keep pace with current and future migration rates and ensure that migrants have access to essential services – such as public transport, support services and housing – and can meaningfully integrate into society.

This requires transparency, consistent decision making and careful planning by all levels of government.

Expecting Australia’s infrastructure system to successfully absorb an additional 13.1 million people in only 40 years is delusional.

If Treasury’s population growth projections materialise, Australian living standards will unambiguously be destroyed.

Tell me I’m wrong?

Unconventional Economist

Comments

  1. As a demographer it would be racist *not* to accept 113 million people, becausing Aging!

    • The recent and previous IGR reports have been proved beyond any doubt as highly corrupted nonsense to prop up a big Australia migrant intake agenda.

      Let’s explore the alternative, including ‘what if Australia had OECD levels of skilled immigration & TR intake?’

      Here are my estimates – the 4 million non Australian migrant overshoot we currently have… costs each Australian family / household on average some $29,000 a year. Happy to stand corrected if anyone has more accurate information.

      As the starting metric:
      In Australia today we have 4.3 million non Australian foreign nationals onshore as part of a 25.4 million overall population (ABS). That is 17%, or over 1 in 6 people onshore being a non Australian foreign national.

      🔻1.9 million are foreign nationals as PR.
      They are primarily third world unskilled, aged, non assimilating with low incomes, with high welfare & health care outlays.

      🔻Another 1.75 million are foreign nationals as TR. Again the majority are Asian, Indian / Bangla / Nepal or other third world origin. Everything about this intake is highly negative to Australia metrics, little or no tax contribution (foreign run black economy, vice / cash in hand) and they create massive unemployment, housing and public infrastructure damage.

      🔻Another 668,000 are NZ SCV / with the majority (over 360,000) being of non NZ third world foreign national origin. NZ is used as a loophole by the third world migrant traffickers for entry into Australia.

      Total = 4,315,000 foreign nationals onshore.

      Exclude the 330,000 NZ SCV who are NZ born & assimilate to be close to Australian skills, income & morality – that still leaves approx 4 million third world non Australian foreign nationals onshore who do not.

      Current figure v ‘what would have been’
      (If Australian in the last decade had OECD levels of moderate skilled immigration & OECD average levels of TR intake)

      The actual comparison.
      21.5 million Australians & 4 million non Australian (25.5 million total) as current status…
      VERSUS
      21.5 million Australians & 0.5 million non Australians migrants onshore (22 million total) as an OECD average migrant intake compare.

      These are crude measures.
      The actual GDP per Capita has factors of labour, non labor & trade inputs, so to serve as an illustration unless someone has more accurate modelling.

      Current GDP 2021 est $Aud 1.70 trillion.
      / 25.5 million (21.2 million Australians + 4.3 million non Australians onshore)
      = $Aud $66.6k each

      Alternative Scenario. Lower level of skilled migrants only & OECD ratio of TR intake.
      Firstly our overall Gdp would be $165 billion lower (removal of 4 million third world migrant foreign nationals / guest-workers @$43k each)

      So Gdp $1.54 trillion / 21.7 million (21.2 million Australian & 0.5 million non Australians) = $Aud 71k each.

      👉🏾Our GDP per Capita would be 7% higher.

      Australia wages would also be 11.3% higher, that is based on the average non Australian migrant income being only 63% (PR) or 46% (TR) of an Australian average.

      Housing would be up to 30% cheaper, and main city low end modest established units and dwellings up to 50% cheaper.

      That would be driven by factors of less demand (where do people think over 4 million third world migrants live today) and no case for foreign dirty money washed into acquiring low end established Australian units or dwellings to convert to house over 4 million non Australian migrants in cash in hand sublet bunk slum share.

      The 114,000 Australian permanent homeless & 360,000 Australians who today lack affordable housing as they were ethnically cleansed from their modest low cost established urban housing – they would have somewhere to live. Another $8 billion or so of taxpayer burden removed.

      Australian unemployment would be under >400,000 not 1.4 million unemployed and 1.3 million seeking work (Roy Morgan July 21)
      saving over $19 billion.

      * July 05 2021 Finding No. 8742 Country:
      Roy Morgan employment series data
      1.39 million Australians unemployed in June 2021, unemployment 9.4%, under-employment at 8.5% (1.26 million).

      Our cities would be liveable, far less congested, clean & safer. Our prisons emptied. Violent crime & ideological fanatic migrant terrorism greatly reduced.

      The Australian taxpayer burden would also be reduced as no white elephant taxpayer infrastructure projects – congestion removed & Toll roads would be less viable so that additional ‘privatised taxation’ removed.

      Our Medicare & other taxpayer outlays would be massively reduced, the estimate is up to $35 billion is now spent on foreign nationals PR migrant unskilled welfare & health care dependency.

      Exposing the IGR report alarmism as complete lies.
      Australia has amongst the lowest outlays in the OECD for aged pension & care – if the non Australian migrants cost burden is excluded.
      We also have a future population age demographic that is the envy of the OECD with higher incomes and longer working life tenure – if the non Australian foreign nationals are excluded. In simple terms, if we didn’t have 4 million non Australian migrants onshore we wouldn’t need any migrants at all. And the benefit or not having 4 million third world unskilled migrants would be higher Australian incomes, much higher standards of living, lower costs, longer and more secure tenure of employment – all of which would allow much higher rates of Australians being able to afford to have children at a higher ratio than today.
      In essence the importation of millions of third world unskilled migrant intake makes Australians poorer, creates inter generational migrant welfare & health care burden (they are also aged or will age_ the PR foreign nationals already have massive government welfare & health care outlays).

      Our Power stations, Dams & other public infrastructure outlays would be reduced.

      We would have an Australian emission reduction of over 60 million tonnes of Co2 based on an Australia average of 15 tonnes per individual – (4 million non Australians onshore @ 15 tonnes)… versus 4 tonnes per person China or less than 1.5 tonnes India / other third world. So a net overall global emission reduction.
      👉🏾Barrier reef saved.

      Education affordability for Australia youth would be achievable – the education sector prevented from prostituting itself as a migrant guestworker visa alibi.

      Australian youth would have the opportunity for education, higher skills & Human capital value for Australia.

      The overall cost of living – especially housing & services would be reduced.

      Our standards of living – housing, social amenity greatly improved, and crime & violence would be greatly reduced.

      In fact it’s hard to find any benefit or any positive economic and social contribution from the past decade of border control failure & visa fraud.

      -/-
      In very rough terms – the overshoot of over 4 million third world foreign national migrants still onshore in Australia cost some $140 billion yearly in job theft, lost wages, extra housing cost, lost education or other entitlement, overloaded health care & hospitals, over loaded welfare, congestion, overcrowding, crime, as well as emissions & environmental degradation.

      Excluding the non Australian foreign nationals- there are approximately 4.75 million Australian citizen family / households.
      That’s an impact or cost to each and every Australian family of some $29,000 a year.

      IGR report.
      The logical conclusion is to reduce the migrant intake & aggressively shed / exit / repatriate the 4 million foreign nationals who should never have been allowed in.

      Then Australians can afford to have more children, affordable housing, lower cost of living, have much higher incomes & a more secure life cycle of employment thus better funding a reduced (migrants removed) aged & healthcare segment.
      And their youth in turn have education entitlement & employment opportunities restored.

  2. TailorTrashMEMBER

    …we don’t do infrastructure well
    …we don’t build trains well
    ….we don’t plan the building of subs well
    …..we don’t do broadband well
    ….we don’t manage water well
    …. we don’t build apartments well
    …..we don’t do vaccine roll outs well

    Garn straya !!

    • Jeez you’re a Negative Norman. We do coffee very well. And Olympic games. Lots of productive and useful things like that that add to the national wealth and benefit all Australians.

        • PalimpsestMEMBER

          With respect I must note that hairdressers remain on the skilled migration list. I think it’s just mowing lawns. Apparently Australians are incapable of learning how to do a blow wave (no not that sort … although that’s skilled migration too apparently).

          • Jumping jack flash

            Hairdressing is a rort if you work for a salon, that’s why there’s so many sole trader backyard ones. I guess the salons are doing it tough. Same goes for any kind of tradies i guess.

      • TailorTrashMEMBER

        ….we are also good at letting foreigners
        “splash out “ and “snap up “ our children’s homes …in fact were are exceptional at that ….we even applaud and clap vigorously after the auction

  3. I'll have anotherMEMBER

    Not enough seperation of politics from planning and infrastructure committees. This is a big problem as all public works are so politically sensitive and money gets wasted in the design phase. Many designs never getting off the ground after millions spent by the tax payer.

    The designers insurance premiums are ridiculously expensive. Many of these large projects, 50% budget is for design.

    Not enough money gets spent by government in the investigation phase, i.e. services, geotechnical and survey. If it is budgeted, it is then wasted by the consultant who does the initial engineers quote which guides government on fair contractor pricing. Then due to poor geotech, services and survey info, the budget is blown out of the water before it even starts due to either requiring redesign or not optimising the design due to missing info.

    The projects themselves are bogged down in a lot of unnecessary QA. The project offices on these jobs are filled to the brim with junior engineers filling out paperwork that a lot of the time is BS in any case. The amount of nonsense conformance reports coming out of these projects is beyond belief.

    The specifications that the contractor works to are too tight. Far too much time wasted trying to pour a slab to 1mm which cannot be achieved in any case and ends up a fudged report.

    The programming and critical path on these jobs is manipulated by politicians who offer incentives via early payment for certain sections to be completed early. Engineering science and mass hauls go out the window.

    The critical path is also fudged by superintendents who will go around opening up massive section of the job, i.e. stripping and clearing topsoil, then leaving it for months, moving the 2 excavators all over the job instead of using 5, often spending more time on a float then digging, and having them used where a grader or bulldozer is the proper choice, all lengthening the build, resulting in deadlines not being met and extra pay “for the boys”. It often ends up with the politicians then approving an “accelerated” program, a big win for the contractor. The lack of resources overall, also creates massive inefficiencies. Not enough plant, not enough consultants, not enough good senior staff.

    Speaking of senior staff, there is little left on these jobs. Most senior civil engineers and land surveyors have seen enough construction by the time they’re 35.

    The culture between client (gov) and contractor is atrocious. Very combative. The contractors engineers generally despise their client. The culture within the contractor is the same. Everyone is pushed for time and thinks they all have the most important part of the job to build. Results in everyone disliking each other and a very inefficient workplace.

    Not enough GDP% devoted to creation of new infrastructure.

    Not enough client side inspectors meaning the public gets a poor product in the end.

    No seperation of the “checkers” from the contractor.

    Why in the hell is the contractor allowed to engage the consultants performing the soil tests / asbuilts etc? This results in a mascot towers event.

    Some of my observations about infrastructure off the top of my head I have noticed.

    • The specifications that the contractor works to are too tight. Far too much time wasted trying to pour a slab to 1mm which cannot be achieved in any case and ends up a fudged report.

      Ohhhh yeah. I vividly recall working in a gummint software project where one specification required response to a realtime input to be completed within one millisecond. There was no reason for this. The system would have worked just fine with a response of one second, but it was a realtime system, and realtime systems must be “fast” according to the dummies who wrote the spec, so satisfying this completely unnecessary requirement cause a substantial amount of unnecessary heartache. I think there’s a lot of such overspecification going on out there.

      • Jumping jack flash

        For true realtime 1ms is probably too much lag, so their definition of realtime obviously needed to be updated.
        Probably would take a few months for that.

      • I'll have anotherMEMBER

        Yep.

        Specs written in the 70’s mostly.

        Technology has either made a mockery of the spec, as in its simplistically easy to achieve using say GPS and the spec does not reflect this gain in ability. Alternatively, the tech now exposes flaws that less sophisticated tech would not have achieved.

        Then you have specs around things like monitoring, where they force the contractor to spend a few $million, but even if the monitoring works, the failure it is monitoring is unpreventable in any case.

        Civil Engineering is an old profession where much of the scope that is auxiliary to building the job is present due to old ways of working that technology has made redundant but the spec has not caught up.

        You then have the over reliance on technology where now that because we can measure something, many engineers believe that we should. If it is not in the spec, we haven’t budgeted for it, therefore we are eating our profits by trying to complete it. Argument goes, “it will only take you 10 minutes!”. That’s true, however, replicating that same 10 minutes over a 40km job for 25 consultants ends up costing $100k’s. Do it for a few tasks and you are wasting $millions.

        Engineers see consultants as a threat to the bottom line but they manage it by understaffing instead of simply good management. This attitude starts at the planning and investigation phase and carries through to design, then construction and operations.

  4. Morrison Government admits “we don’t do infrastructure anything well”

    I fixed your headline for you.

  5. Jumping jack flash

    Hahahaha!
    Its funny because building infrastructure is the *only* thing governments do, and the only thing they have done for their people for quite some time now.

    These are the same guys who can’t even coordinate handing out free government money in the middle of a pandemic. I mean, seriously. There’s not much that’s easier than the government handing out money to everyone. Its not like they need to hold a hose to do it either.

  6. Fwaph, fwaph, fawph, … no mention of the economics which got us here, whence it came, who funded it, why, and how some seem intent on carrying around antiquarian millstones around there necks lest they become grog goggles too define the proverbial village of lore and why the unwashed just won’t obey the dicta this agenda decrees ….. obviously there are still[!!!!!!] too many socialist and commies on the orb …

    • I'll have anotherMEMBER

      First spelling thing I’ve ever made comment on on the net, but for a guy with such a large vernacular I couldn’t resist:

      – Their* necks
      – To* define

      • Its a blog, dyslexia has its pros and cons, if most get the gist of it I don’t care about strict grammatical formatting.

  7. gballardMEMBER

    Why did we build the Hume Hogway to accommodate vehicles travelling at 150kmh per hour (in great stretches of road) at additional cost only to allow a maximum speed limit of 110kmh per hour. Either up the speed limit OR build (more) lower standard highways and get more bang for the buck spent!

  8. Lord DudleyMEMBER

    Infrastructure spending is for political loosers. Firstly, it shows up in the current budget and forward estimates. You know what doesn’t show up? Infrastructure debt! It’s just as real as fiscal debt, but it doesn’t appear in the budget.

    This delivers short term budget surpluses, which permits tax cuts. Sure, it’ll cause problems years down the road, but that’s future looser’s problems, and so the cost will be borne by mostly young people. Australian’s loathe their youth. Why not load them up with infrastructure debt?