The road transport industry in Australia will tell anyone who will listen about the awful state of this country’s road infrastructure. Not only are we paying over the odds for what we have, the roads we do have are not up to the job and, often, don’t go to the right place.
All governments, both federal and state, are serial offenders in the under funding of our infrastructure. The short-termism created by short government terms and leadership churn means long term investment in infrastructure is constantly being promised, but rarely delivered in full.
The mantra trotted out by the various treasurers and state finance ministers is always about the how to access the investment dollars to improve infrastructure. All of the research has been done, which demonstrates how every dollar spent in improving transport improves productivity and stimulates economic growth.
It’s about time someone bit the bullet, grasped the nettle and put their balls on the line, when it come to infrastructure spending. Let’s hope the recent changes federally will inspire some long term thinking. We are already seeing this in the field of taxation reform, a government willing to tackle the hard questions and develop a consensus.
Also this week, we have seen the publication of a survey of major global and Australian investors by Infrastructure Partnerships Australia (IPA) and Perpetual, which has revealed there is a significant amount of money available to invest in Australian infrastructure, but more work is required to capture it.
The survey asked potential investors about their attitude to investing in Australia and 95 per cent of infrastructure investors said they are likely to invest in Australian opportunities in the near future, but there are some ‘significant barriers to entry’.
In a telling stat, 68 per cent of potential investors cited political risk as their greatest concern in the Australian market. After getting a reputation for stable investment, recent developments like the cancellation of the Melbourne’s East West Link and the sell off of assets by Queensland are said to have ‘spooked’ many investors.
Half of the survey’s respondents said they were ready to invest more than $1 billion in any one project, with 36 per cent saying they were ready to invest more than $2 billion. There would seem to be plenty of funding available, if we get our act together.
There’s the rub, what Australia needs to do is become a mature and sensible country, a place where investors can feel comfortable about the stability of government and the decisions they make. Let’s hope we can all work together on this and get some major infrastructure improvements on track. Otherwise we may end up trying to service a growing first world economy on third world roads, or see our roads stifle possible future growth.