Mike Mrdak: reforming Australia’s infrastructure agenda

The Secretary of the Department of Infrastructure and Regional Development questions the existence of an infrastructure gap and outlines his reform agenda for building Australia’s future.

Mike Mrdak

Mike Mrdak

Infrastructure has become a something of a buzzword for governments and the community about dealing with the issues that ail us as a country — in many ways as the only solution. It’s far from that, but it is a critical part of how we take our economy forward and the productivity challenge we face for the future.

The infrastructure gap, which is what its being called, is a curious term. There’s certainly no shortage of experts who argue that we face a significant gap. Various business groups argue that the infrastructure gap we face ranges from $80 billion to $770 billion right now. The recently completed B20 group on infrastructure that reported last month suggest there’s a $60 trillion to $70 trillion immediate gap that needs to be funded by governments over the next 20 years. I’m not sure how anyone comes up with such large numbers.

The Australian government commissioned the Productivity Commission recently to do a review of infrastructure policy recently particularly funding and financing of infrastructure, which has been a very sensible piece a of work that Peter Harris has lead. The commission recently noted that many interested parties argue there is an infrastructure deficit, but none seem to agree what the deficit or what sectors it supposedly covers. It went as far to say infrastructure deficit doesn’t have a clear evidence base: “A true infrastructure deficit would exist only where infrastructure was efficiently utilised and priced and unmet demand remained and the reliance on infrastructure gap can lead to poor investment decisions.”

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