Infrastructure body urges projects rethink due to Covid population shock
A 200 per cent increase in migration out of major cities triggers rising vacancy rates, falling rents as regional house prices skyrocket.
Australians’ changed habits through the COVID-19 pandemic should cause governments to rethink how they can best spend the combined $120bn in infrastructure projects commitments over the coming decade, according to a new report from Infrastructure Australia.
A tripling in the number of households fleeing major cities for the country’s regions and the working from home trend which could leave one in 10 workers abandoning the office over the longer term suggest priorities may need to shift, the report suggests.
A 200 per cent increase in migration out of cities alongside closed international borders during the pandemic has triggered rising vacancy rates and falling rents in Sydney and Melbourne, with reports that regional house prices have jumped by 10-20 per cent through the worst recession in almost 100 years.
Many companies located in CBDs are not renewing commercial leases or are downsizing floor space, the report notes.
With increased demand for country living has come additional pressure on local utilities and telecommunications services, particularly as the explosion in video conferencing led to a spike in internet usage. The IA report notes the existing infrastructure network has coped with these pockets of heightened demand.
IA chief executive Romilly Madew said it was unclear how much of the changed behaviours would revert to “normal” over coming years, but “if these trends stick, that will change the pipeline for some jurisdictions”.
While governments should be looking to facilitate some changes in behaviour, Ms Madew said policymakers should try to discourage the spike in private car usage as commuters avoided public transport for health reasons.
Sydneysiders, for example, are travelling by bus, tram and train 40 per cent less than before COVID-19, the report says.
Ms Madew said this risked increased congestion and the attendant economic cost of longer travel times. Conversely, more flexible working hours could allow workers to commute outside peak travel times, she said.
The closure of international borders through the pandemic has caused the biggest population shock since World War I, with net overseas migration expected to be negative this year and the next following years of robust growth.
IA chief of policy and research Peter Colacino said net overseas migration was “the No 1 driver of demand for infrastructure”.
But he said it would be a mistake to confuse a temporary pause in migration with a structural shift in population dynamics, and that governments should use the crisis as an opportunity to “get ahead of the population trend”.
“The effect of that, by and large, is a three-year pause on population growth,” Mr Colacino said. “Investment should continue during that period to do catch-up”.
IA’s Infrastructure Beyond COVID-19 report was requested by the federal government as an interim research paper that will inform the 2021 Australian Infrastructure Plan, due next year.
Class war: ‘We’ll teach the Greens’, vow private schools
Independent schools are preparing to launch a nationwide campaign in Greens and marginal electorates calling out the ‘relentless and baseless vilification’ of private schools.
Dreaming or dreamt up? Mystery of the blue-banded bee deepens
A mural indicating the history of Dreaming stories through Wiradyuri country was made in consultation with the group who would later use it in a bid to shut down the Blayney gold mine.