3  Current and prospective infrastructure gaps

Commentators on Australia's infrastructure have observed periodically that the nation faces an infrastructure 'gap' or 'shortfall'. Whether there is an infrastructure gap is a central consideration for the Audit. Key questions include:

■  how might an infrastructure gap be assessed or measured?

■  are there gaps in Australia's infrastructure at present?

■  are current gaps (if any) likely to get worse in future and/or are new gaps likely to emerge, unless action is taken?

■  do we have the institutional settings to deal with current and prospective gaps?

Australia is not alone in considering these questions. In a report published in 2013, the McKinsey Global Institute estimated that:

$57 trillion in infrastructure investment will be required between now and 2030-simply to keep up with projected global GDP growth. This figure includes the infrastructure investment required for transport (road, rail, ports, and airports), power, water, and telecommunications. It is, admittedly, a rough estimate, but its scale is significant-nearly 60 percent more than the $36 trillion spent globally on infrastructure over the past 18 years. The $57 trillion required investment is more than the estimated value of today's worldwide infrastructure.50

In broad terms, the Audit's findings are:

■  in several sectors and in different areas around the country, there is already a gap between the level of service required from our infrastructure and what is delivered;

■  in the absence of an increase in infrastructure spending (on new projects and the maintenance of existing assets) and improvements in the way the nation manages its infrastructure, the gap will widen, and will pose significant challenges to Australians' quality of life;

■  there is too little informed public debate about these matters. In the absence of such a debate, we risk allowing the standard of the nation's infrastructure to 'drift' to a lower quality. If we fail to discuss openly what we realistically expect from the nation's infrastructure, and how this will be funded and achieved, then our quality of life is likely to be lower; and

■  Australian governments need to develop a means of assessing the existence of infrastructure gaps, which will also allow us to measure such gaps, and assess service level/price trade-offs so that we can engage in informed debate about the arguments for and against closing such gaps.

Infrastructure Australia will be addressing these matters further in the Australian Infrastructure Plan.

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50.  McKinsey Global Institute (2013), p. 1. The figures quoted above are in 2010 prices.