As population growth puts a growing strain on public facilities, former Treasury Secretary Ken Henry says local communities and businesses should play a bigger role in developing infrastructure projects that do not rely on government.
The National Australia Bank chairman will on Thursday launch a new paper setting out a model for “Customer-led DIY infrastructure,” an attempt to get local communities more involved in infrastructure development.
In a speech in Sydney, Dr Henry will highlight the importance of smaller-scale local infrastructure such as sporting grounds and parks, alongside larger projects such as rail lines or airports.
Dr Henry has previously called for business to play a more active role in backing infrastructure, and NAB’s research has found many Australians are uneasy with rapid population growth, because it is straining services such as health and education, worsening commute times and driving up house prices.
The NAB-sponsored paper he is launching, by John Grill Centre executive director Garry Bowditch, sets out a model that could make infrastructure less dependent on governments.
Under the proposal, local communities could nominate priority projects, and funding would then be arranged through a new market that would tap a range of private and public sources.
Dr Henry said the national discussion on infrastructure did not include a voice from local communities, a potential source of good ideas that would not occur to “those sitting behind government and corporate desks in our capital cities”.
“Australia has a preoccupation with one-off, ‘big ticket’ infrastructure projects; the ones associated with a ‘photo opportunity’ and, many years down the track, the brass plaque, perhaps even a ribbon to cut,” Dr Henry will say.
“Major infrastructure projects have their place, but so do the bits of infrastructure that communities use every day – the ones that support how we connect with each other and that we value because they are part of what make Australia a great place to live.”
Dr Henry gave the example of sporting facilities or green space, among an estimated $47 billion in community infrastructure that is in “poor to very poor” condition.
“We have to support disruptive voices developing compelling business cases for a range of infrastructure projects that will attract investment, improving commercial, social and environmental outcomes for their communities, without relying on government,” he said.
The concept of “Customer-led DIY infrastructure” involves setting up an “ecosystem” to help get more community infrastructure projects completed.
There would be an independent and not-for-profit “hub” to develop ideas, and the creation of a new investment market to provide capital for such projects. Funding sources could include bonds, equity, government loans, donations and public subsidies, the report said.
Dr Henry said there was a clear role for businesses, including NAB, to support such an ecosystem.
“Across Australia, we need to develop mechanisms to attract capital providers who are prepared to back infrastructure projects that represent good value and provide quality outcomes at the local community level,” he said.
This year’s budget included $75 billion in future infrastructure spending, including funding for a second Sydney airport at Badgerys Creek and a new inland rail line connecting Melbourne and Brisbane.
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