Industry-Innovation-and-Competitiveness-Agenda

Ambition 3:
BETTER ECONOMIC INFRASTRUCTURE
To meet Australia’s economic infrastructure needs for the 21st century, the Government is:
• increasing public investment in economic infrastructure;
• improving infrastructure project selection, funding, financing and delivery; and
• encouraging greater private sector investment in infrastructure.
Economic infrastructure for the 21st century
Economic infrastructure – roads, rail, ports, airports, energy, water and communications
networks – is key to Australia’s competitiveness. Economic infrastructure opens up new markets,
and reduces the cost and increases the speed of doing business. It connects business with
skilled labour, facilitates information and technology transfer, and allows greater specialisation
by businesses and workers. Better economic infrastructure can also reduce or eliminate travel
time and job search costs, allowing workers to access more distant workplaces. These benefits
are particularly important for Australia due to its geographical size, dispersed population,
and distance from overseas markets. The Government is committed to addressing Australia’s
infrastructure needs.
Australia’s current economic infrastructure will not be able to meet Australia’s needs in the
21st century. Australia’s domestic infrastructure demands are growing rapidly. By 2060, Australia’s
population will have increased by over 15 million, or around 70 per cent, and our major cities
will grow even faster (Productivity Commission, 2013a). Australia’s trade-related infrastructure
demands are also growing rapidly. Global GDP is expected to double by 2030 and trade will grow
even faster, particularly within Asia and between major regions (OECD, 2011a; Au-Yeung et al,
2013). Globally, this is expected to cause air passenger traffic to more than double; air freight to
triple; and port handling of maritime containers to increase four-fold (OECD, 2011a).
Australia must invest in infrastructure if it is to be ready to meet our domestic economic
and trade needs. If Australia’s infrastructure needs are not addressed, the costs will
increase (see Box B5). Consistent with this, businesses have ranked better infrastructure as
a top priority. PricewaterhouseCoopers (2014) found that 83 per cent of Australian CEOs
considered infrastructure improvement to be the number one priority, compared with around
50 per cent of CEOs internationally. Similarly, the Australian Industry Group (2014) found
68 per cent of Australian businesses put infrastructure in their top three priorities.
Industry Innovation and Competitiveness Agenda
In
Co
TPO00007
The Reform Agenda: Ambition 3
61