A further slowing in growth
NAB Chairman, Dr Ken Henry shares his vision for how we can address Australia’s infrastructure needs, as our population grows.
An adaption of Dr Ken Henry’s speech at the launch of the third policy paper by the Better Infrastructure Initiative.
Better infrastructure presents a leadership challenge and a leadership opportunity, for everyone: all levels of government, business, academia, community leaders, and the ‘do-it-yourself’ protagonists.
If we’re serious about pursuing a vision of Australia with modern and efficient infrastructure, then business is going to have to take an interest in how we design our cities, facilitate regional development, plan new urban centres and connect them with transport and telecommunications; how we deal with serious social issues like housing affordability and traffic congestion; how we deliver reliable, affordable and sustainable energy; and how we preserve environmental amenity for future generations.
At NAB, we accept we have a role to play in addressing the challenges – and finding the opportunities – in Australia’s future; especially these that come from Australia’s strong population growth.
Australia is expected to add 16 million people to its population over the next 40 years. Sydney and Melbourne will absorb roughly seven of those 16 million additional people.
Not a lot of thought has yet been given to where the other nine million will live.
Research NAB carried out earlier in the year showed that among our customers there’s not wholesale support for a larger Australia. For many, the prospect of a higher Australian population means more stress in the ability to buy a house, to live where you want to live, to get to work with a reasonable commute time. And many in the community are also concerned about our ability, as a nation, to maintain norms of Australian social and economic inclusion, and to continue to provide access to high quality services in areas such as healthcare and education.
These concerns are playing out against a backdrop of rapid technological advancement that’s seeing the digitalisation and automation of many aspects of our lives, including in the workplace – and with it, growing concerns about job security.
But what is the business perspective? The same NAB research showed that most of our business customers would strongly prefer a larger population, which supports better business growth.
In our view, at NAB, it’s time for business and the community to stop talking past one another. It’s time for a well-informed dialogue about current challenges and future opportunities – and we see a lot of opportunity.
One of the topics we don’t talk about nearly enough is the future of infrastructure. And critical to that discussion is our vision for rural and regional Australia.
Regional centres can be a topic of conversation between governments and infrastructure practitioners, but it’d be a much better conversation if it were driven by communities and the end users of infrastructure.
If we can get business, consumers – the DIY protagonists – at the community level to think about the infrastructure their community needs, they may be able to solve many of the problems themselves; they may be able to identify opportunities for their region that would never occur to those sitting behind government and corporate desks in our capital cities.
Our Australian communities can become catalysts for positive change. They can lead change rather than having change thrust upon them.
It’s these voices that we should be hearing in the national conversation about infrastructure.
Right now, we don’t hear these voices.
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.
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’re part of what makes Australia a great place to live.
These facilities might not reduce commute times or make the movement of freight more efficient. Instead, they might be great sporting facilities and green spaces that improve a community’s health and wellbeing. They might be purpose-fit community centres and public squares that provide a place for people to meet, and which support the development of a community’s cultural and social identity.
Australian Local Government Association data estimates there’s $47 billion in community infrastructure that’s in a poor to very poor state.
If we’re going to meet the challenge of renewing our community infrastructure, we’re going to have to get more participants involved and develop better ways of doing things. And who knows what sorts of regional development ideas might emerge from those same conversations?
So what needs to happen to stoke more community involvement in infrastructure and help support our community leaders and nation builders? We have to create room for new voices. We have to support those who have the courage to assume responsibility for their community’s future.
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.
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.
We need a viable ecosystem for community-led infrastructure.
The Better Infrastructure Initiative outlines the basic elements of what this ecosystem could look like:
What is NAB doing?
There are clear roles for business – and for NAB – in supporting the development of such an ecosystem.
As the biggest arranger of infrastructure financing in Australia we have an interest in supporting growth and opportunity right across this nation, because there’s alignment of this objective with the interests of our customers and our shareholders.
When it comes to infrastructure, we can use our balance sheet to finance projects and lend to the businesses that contribute to the nation’s prosperity.
We can also play the role of facilitator: bringing the proponents of viable projects together with our corporate and institutional clients.
And we can be an innovator: investing our capital and time to create new ways of driving commercial and social value, through innovations in the bond market and through social impact investing.
In local communities all over Australia, we can sit at the table and have the right conversations about community development – financing schools, hospitals, airports, businesses, energy projects, roads, community infrastructure. And we can create forums for the discussion of system-wide interactions that link communities.
And, importantly, we can be the advocate: our bank can act as the loudspeaker for the voices of our customers, so they can be heard in a national infrastructure conversation; so that their voices not only shape the future of their communities, but also the nation.
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