In conducting the Audit, Infrastructure Australia has commissioned a number of reports. It has also consulted with state and territory governments and a range of stakeholders in the infrastructure sector. The commissioned background documents provide a range of 'data points' that contribute to the Audit (including reports on the DEC of our infrastructure, a report on demographic projections, a report on infrastructure maintenance, and transport modelling assessments).
Research from government agencies as well as private and non-government parties has also been reviewed as part of the process.3 Infrastructure Australia has also considered the demographic and other projections contained in the Australian Government's 2015 Intergenerational Report.
The Audit estimates the value-add of the four infrastructure sectors across 73 geographic Audit regions. These Audit regions are consistent with the geographic boundaries used by the Australian Bureau of Statistics (ABS).
The demand for economic infrastructure is strongly driven by changes in the population and patterns of economic activity. Population growth is often a key determinant of demand projections underlying the business cases for infrastructure investments.
It was therefore necessary to prepare a base set of population projections for the Audit. Details of the demographic analysis behind the Audit are set out in two associated reports.4
Long-term population projections prepared by the ABS have been used to set 'control totals' at the national, state/territory and capital city levels. Infrastructure Australia's consultants prepared a finer breakdown into the 73 regions based on economic analysis as well as a review of projections prepared by state and territory governments.
This approach enabled a nationally consistent approach to the demographic projections to be pursued. Although individual states and territories have their own projections, they tend to work from the ABS national control total. In the main, the states and territories projections align reasonably closely with the ABS projections.5
In addition, the Audit refers to associated transport modelling for Australia's six largest capital cities, which was commissioned to complement the DEC analysis in those locations. The transport modelling undertaken for the Audit has assumed that the following elements comprise the minimum transport network that we can be sure will be in place in 2031:
■ the existing 2014 network;
■ projects under construction; and
■ projects where a budget commitment has been made (e.g. in Sydney, WestConnex Stages 1 and 2, but not Stage 3).
This approach is intended to clearly show where transport demand is projected to grow in excess of supply.6 A complete description of the methodology is contained in the consultant's report.7
The DEC measure is not the only analytical tool that could be applied when assessing infrastructure. Other tools, such as cost-benefit analysis, are particularly important for detailed, project-level decision making. But it is not possible, in practical terms, to undertake a cost-benefit analysis for every possible infrastructure initiative, to determine which would provide the greatest value-add to Australia's economy. The DEC measure facilitates a national view of the sectors and regions where infrastructure investment and/or reform are likely to provide the greatest value-add. Other tools like cost-benefit analysis can then be applied to determine, in detail, which possible initiatives warrant further investigation.
Data for the Audit has been drawn from a wide range of sources. In some cases, data has not been available on a consistent basis, e.g. at a regional level, and in other cases data has had to be interpreted from a variety of sources to arrive at inputs to the assessment. As such, this Audit report does not seek to provide a specific evidence base for making decisions about individual projects. However, it is a valuable nation-wide indicator of the sectors and regions requiring additional focus.
A focus of the Audit was to measure the:
■ supply of infrastructure (using broad capacity metrics);
■ demand for infrastructure (using broad utilisation metrics); and
■ value-add of infrastructure services, and their contributions to GDP and Gross Regional Product (GRP).
The base year for auditing is 2011, which was selected because it was a national census year. There is therefore more complete and reliable data about infrastructure available for 2011 than is available for more recent years.
The Audit projects demand for infrastructure services in 2031. The year 2031 was chosen to align with the national census cycle and five yearly population projections commonly used by governments, and to provide data to underpin development of the 15 year Australian Infrastructure Plan.
Where projected demand is likely to exceed the capacity of existing infrastructure, options for intervention include:
■ introduction of reforms to change the way services are delivered or to manage demand; and/or
■ investment in new infrastructure to expand capacity.
In developing the Australian Infrastructure Plan, initiatives will be proposed and tested to determine the most efficient and effective means of infrastructure delivering sustainable economic growth.
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3. See Appendix 6 Bibliography.
4. Infrastructure Australia (2015b) and ACIL Allen Consulting (2014a)
5. Advice from the Western Australian Government suggests that its projections for the state and for the Perth Greater Capital City Statistical Area are likely to be lower than those prepared by the Australian Bureau of Statistics. As at April 2015, the Western Australian Government has not released updated population projections.
6. In undertaking the analysis, it was necessary to find a surrogate measure for the value that will be contributed by efficient road transport. Travel time savings (or losses) through congestion are that surrogate. The shadow toll includes a measure of the cost of delays due to congestion. The delay cost is measured as the difference between the time it takes to travel on a road link under congested conditions and the time it takes to travel the road link under uncongested conditions. This approach recognises that, although congestion and delay are undesirable, drivers nevertheless use the road in question, knowing that there is likely to be a delay. In other words, even though there may not be an uncongested choice, drivers are making a choice to use the road.
7. ACIL Allen Consulting (2014a)