A new report from Infrastructure Australia has called for better leadership from the Federal government to improve the productivity, liveability and affordability of Australia’s largest cities.

“Australia’s cities are the powerhouses of our economy and they need to be a national priority of government,” says Infrastructure Australia CEO, Philip Davies. 

“Asia’s global middle class as well as our own rapidly growing population will unlock new economic frontiers for Australia, but we need to position our cities to take advantage of this.

“Australia needs to start setting national objectives that allow our cities to realise their full potential and remain globally competitive.” 

Based on the World Economic Forum’s Global Competitiveness Report 2017-2018Australia is lagging behind the likes of Switzerland, the US and Singapore. Australia is ranked 21st out of 137 countries.

According to the report, the nation’s biggest limiting factor is restrictive labour conditions, followed by tax rates, inefficient government bureaucracy and policy instability. The nation is ranked 28th for infrastructure.

“The Australian Government is right to think that investment shouldn’t just come in the form of give and forget grants,” says Davies.

Pictured: Current budget allocation for infrastructure in Australian states and territories. According to Davies, this spending should be allocated to meet national performance outcomes. 

“We need to introduce more structure and accountability by tying funding for our cities to clear national performance outcomes. [For this reason] we are recommending the Australian government establish a consistent framework of incentives to drive the delivery of national benefits within our cities at the project, place and reform level.” 

The new framework would include three incentive types:

  • National Partnership and Project Agreements which make project funding contingent on meeting specified outcomes across the project lifecycle and demonstrated economic benefit
  • City Deals which apply a series of locally and nationally informed objectives to a city or part of a city, and make infrastructure payments for the area contingent on meeting those objectives
  • Infrastructure Reform Incentives which would provide additional infrastructure funding above existing allocation in return for the delivery of policy and regulatory reform focused on improving the productivity, liveability and affordability of Australian cities 

According to Davies, the design and implementation of these incentives would need to be informed by a well-evidenced national investment and reform agenda for Australian cities.