More calls to lift spending on local infrastructure renewal

The Grattan Institute has added its voice to calls for governments to shift their focus from large transport infrastructure projects to smaller local projects.

The influential public policy thinktank this week cast doubt on the fast-tracking of transport projects by Australian governments to engineer an infrastructure-led recovery from the Covid-19 recession.

“Spending big on transport projects conceived before Covid-19 makes little sense,” said Marion Terrill the lead author on the report The rise of megaprojects: counting the costs.

“[This is] because the pandemic has pushed population growth over a cliff, and fewer people will commute in the future as working from home becomes part of ‘Covid normal’,” she said.

“Even before the pandemic, the Prime Minister, federal Treasurer, and state infrastructure ministers were worried that there weren’t enough workers, materials, and machinery for the massive construction workload.

“When there are already bottlenecks, racing to build projects dreamt up before the pandemic just pushes up prices.”

She said taxpayers would get “bigger bang for their buck” if politicians eschewed “nation-building” and “city-shaping” megaprojects, and instead spent more on upgrading existing infrastructure and on social infrastructure.

Governments need to ensure more efficient use of existing infrastructure, the report argues, pointing to a maintenance backlog across all infrastructure sectors caused by “a historical underspend on preventative maintenance, a lack of data, and inadequate reporting requirements”.

“Governments should … modestly upgrade existing infrastructure, such as widening or upgrading key arterial roads, improving surfaces, upgrading railway stations, and improving key road intersections,” the report says.

“For instance, if dilapidated wooden bridges were replaced with steel bridges, they would be able to handle B-double semi-trailers which currently have to take circuitous routes instead.”

In April, a Deloitte report said that as megaprojects were slower to show positive economic impacts,  governments should focus on “investing in existing assets, improving efficiency, [and] improving resilience”.

Infrastructure Australia has also stressed the need “to think differently about using and planning infrastructure in uncertain times”.