WESTERN Australia's poor infrastructure provisioning system is holding back state growth and future prosperity, according to a new report released last week by the Property Council of Australia that includes a recommendation to establish an independent infrastructure body.
The report, titled 'Mind the Gap: The Costs of WA's Infrastructure Provisioning Framework', aims to demonstrate how the gaps in the state's provision framework negatively impact on the property industry and the general community.
The report finds that public investment in the state's infrastructure averaged 1.5 per cent of gross state product (GSP), which it says is below the international infrastructure investment norm of 3.8 per cent, leading to an investment shortfall of $59.2 billion.
If Western Australia is to meet global benchmarks for infrastructure stock by 2040, the Mind the Gap report states that approximately $22.1 billion in infrastructure expenditure per annum will be required.
"This research demonstrates that WA needs an independent infrastructure body that takes responsibility for its planning, prioritisation and delivery," said the Property Council's Executive Director, Joe Lenzo.
"Poor infrastructure provisioning adds unnecessary risk to projects, making it difficult to secure debt financing and attract capital," Mr Lenzo said.
"Business-as-usual is not an option if we want to provide the infrastructure necessary to support WA's growth.
"Implementing a strong infrastructure provisioning process will ensure that scarce infrastructure dollars are directed where they are most needed and where the best value for money can be realised.
"The process needs to be independent, transparent and accountable. Infrastructure should not be a political football nor should projects simply be dropped because something else attracts the government's attention."
Key findings of the report include:
- There has been a considerable underinvestment in Western Australian infrastructure over the past 40 years, with the value of WA's current infrastructure stock more than $59.2 billion below the accepted global average.
- For Western Australia to meet global benchmarks for infrastructure stock relative to GDP by 2040, approximately $22.1 billion in infrastructure expenditure per annum will be required.
- The lack of status and accountability attached to the Infrastructure Coordinating Committee limits its effectiveness as an organisation that plans and prioritises infrastructure delivery.
- If 10 per cent of property development projects are delayed as a result of poor infrastructure provision over the course of a year, the value deferred for the economy would be $1,216.27 million.
Key recommendations of the report include:
- Establish an independent infrastructure body based on identified best practice principles, with the responsibility of planning, prioritising and delivering infrastructure.
- Task the independent infrastructure body with developing a long-term, 20 year infrastructure strategy, that delivers cross-portfolio assessments based on objective and quantitative evidence analysis.
- Implement a transparent approach to decision making and evaluation that reports on project performance relative to the project deliverables and outcomes.