Australian infrastructure: some facts and figures

1 Australian infrastructure: some facts and figures2| Australian infrastructure: some facts and figures E Y 2 0 1 6 Australia s cities are the powerhouses of the national economy. W e need smart, sustainable and resilient cities to prov ide liv eable, productiv e and v ibrant places for Australians to liv e and work. T o thriv e and grow, smart cities need strong, ev idence-based planning and prioritisation of proj ects, the right owners`ih eodel$ innovative fundin_ and finan[in_$ and a strong infrastructure inv estment pipeline. T his document paints a picture of the economic importance of our cities, the pressures they face and the wav e of new smart city initiativ es in Australia. At hrovides interestin_ fa[ts and fi_ures on infrastru[ture funding and ownership models and the changing role of the priv ate sector in prov iding essential infrastructure. It also looks at Australia s ev olv ing PPP market and the future landscape for big he E Y Infrastructure Adv isory practice looks forward to discussing these issues with Summit speakers and a v i d L a r o c c a E Y O ceania Partner H ead of Infrastructure Adv isory F o r e w o r d1 Australian infrastructure: some facts and figures E Y 2 0 1 6 | m a r t c i t i e s a r e v i t a l t o o u r e c o n o m i c p r o s p e r i t yP a g e 2 ;ities are t`e hower`ouses of our national e[onoeq Zut fa[e several hressures$ including population growth, housing affordability and growing congestion.]]]]]

2 W`at are Keart ;ities7 9nd will t`eq address t`e [`allen_es fa[in_ our [ t r o n g i n f r a s t r u c t u r e p l a n n i n g a n d p r i o r i t i s a t i o n P a g e 6 NiZrant$ heohle%[entri[ and [onne[ted [ities need t`e ri_`t hrobe[ts funded at t`e right time. O rganisations such as Infrastructure Australia hav e raised the bar in infrastructure decision making. ?ettin_ hrobe[t e[onoei[s ri_`t is vital& At is often t`e hrobe[ts t`at [osts t`e least that giv e the best returns. ;itq hlannin_ is Ze[oein_ eore heohle [entri[$ en[ahsulatin_ a varietq of fa[ets of life where we liv e, work and play, how we mov e around a city, how we engage with each other and the time we spend in open h e r i g h t f u n d i n g a n d o w n e r s h i p m o d e l P a g e 8 Anfrastru[ture owners`ih in 9ustralia `as Zeen _raduallq transforein_ over t`e past decades, leav ing more of our assets in priv ate hands.]]]]]]]]]]]]]]]]]]]]

3 Hrivate `oshitals are vital to 9ustralia s `ealt` se[tor$ eacin_ uh bust under `alf of all Australia s hospitals, with hospital funding coming from a number of different gov ernment and non- gov ernment sources. 9ustralia `as a eabor s`orta_e of so[ial `ousin_& L`ere are lon_ waitlists for so[ial housing across Australia yet gov ernment funding for social housing is falling. An[reasin_lq$ 9ustralia s ener_q infrastru[ture is Zein_ `eld in hrivate `ands& 9ustralia s urZan water se[tor lar_elq reeains huZli[lq owned and oherated$ Zut it has a large degree of priv ate sector inv olv ement. Hrivate se[tor owners`ih of our transhort assets is _rowin_& :ut soee asset classes hav e more priv ate sector inv olv ement than others, with airports and ports leading the .A u s t r a l i a s e v o l v i n g P P P m a r k e tP a g e 18 9ustralia s HHH earcet `as _rown si_nifi[antlq in t`e hast de[ade& Harti[ihant countries in Australia s PPP market has doubled.]]]]]]]]]]]

4 T he av erage v alue of transactions has increased 1 2 i g i n f r a s t r u c t u r e t r a n s a c t i o n s P a g e 19 L`e transitions lands[ahe in 9ustralia is uid& We `ave seen soee lar_e deals close in recent years with more in the pipeline, including Port of M elbourne and E ndeav our E h a t s i n t h i s d o c u m e n t ? L`is do[mment provides ^a[ts and figmres on t`e ^oddowing fiv e i s s u e s2| Australian infrastructure: some facts and figures E Y 2 0 1 6 Australia s cities are the powerhouses of the national economy v ital to our well- being and economic prosperity. ;ities `ouse t`e eaboritq of 9ustralia s boZs and eu[` of the nation s key economic infrastructure. In fact , 8 0 % of Australia s economic activ ity is concentrated in and near our Australia s cities currently contribute $ 8 5 4 billion to the national economy, and this is proj ected to almost double to $ 1.]]]]

5 6 trillion by 2 0 3 1 .2 P r o j e c t p o p u l a t i o n i n A u s t r a l i a s c a p i t a l c i t i e s1 ?rattan Anstitute$ *(),2 Australian Infrastructure Audit, Infrastructure Australia, 2 0 1 5As cities shape up to be the pillars of our national economy, they face sev eral pressures: ?rooing hohulations :q *(+.$ four in everq five people residing in Australia will liv e in our cities. Perth will be Australia s fastest growing city ov er the next two decades, growing at 1 1 times the rate of New Qorc ;itq 3, six times the rate of London4 and four times that of H ong W`en [oehared to New Qorc s hohulation fore[ast eade Zq: L`e ;itq of New Qorc <eharteent of ;itq Hlannin_$ *()+4 W`en [oehared to Dondon s hohulation fore[ast eade Zq: ?reater Dondon Authority, 2 0 1 65 W`en [oehared to @on_ Con_ s hohulation fore[ast eade Zq: ;ensus and Statistics Department H ong Kong Special Administrativ e R egion People s JehuZli[ of ;`ina$ *()(S m a r t c i t i e s a r e v i t a l t o A u s t r a l i a s e c o n o m i c p r o s p e r i t y 20362016S y d n e y M e l b o u r n e B r i s b a n e P e r t h A d e l a i d e C a n b e r r a H o b a r t205602 0 0 0 0 0 04 0 0 0 0 0 06 0 0 0 0 0 08 0 0 0 0 0 01 0 0 0 0 0 0 0 Kour[e: 9ustralian :ureau of Ktatisti[s$ *()+$ Hohulation Hrobe[tions$ [at& no& +**&3 Australian infrastructure: some facts and figures E Y 2 0 1 6 | Aging hohulation T he population aged 7 5 or more years is expected to rise by 4 million from 2 0 1 2 to 2 0 6 0 , increasing from about 6.))]]]]]]]]]]]

6 4 % to 1 4 . 4 % of the Jising congestion ;oeeutin_ into [ities is Ze[oein_ in[reasin_lq diffi[ult& Wit`out a[tion$ t`e av oidable social cost of congestion in Sydney is expected to grow from $ 6 . 1 2 billion in 2 0 1 5 to $ 1 2 . 6 0 billion in 2 0 3 0 .7 @ousing affordaZilitq and urZan shraol In Australia s cities especially Sydney, M elbourne and Perth rapid house price growth in inner city areas has made liv ing near work unaffordable for many. O n av erage, Australian households spend more than 2 7 % of their monthly income on mortgage H ousing affordability challenges hav e pushed people to _reenfield develoheents in frin_e suZurZs$ _ivin_ rise to lower- density liv ing and costly new infrastructure a[ross 9ustralia are reshondin_ to these challenges with a wav e of new initiativ es to build smarter and stronger cities. 6 Hrodu[tivitq ;oeeission$ 9n 9_ein_ 9ustralia: Hreharin_ for t`e >uture$ 2 0 1 3 7 :ureau of Anfrastru[ture$ Lranshort and Je_ional =[onoei[s$ Anforeation Sheet 7 2 , 2 0 1 58 T he M oody s Australian H ousing Affordability M easure, 2 0 1 5L`e ;oeeonwealt` ?]]]]]]]]]]

7 Overneent s Keart ;ities Hlan sets out t`e 9ustralian ?overneent s vision for 9ustralian cities and its plan for maximising their potential. It is based on:1 . :e[oein_ searter investors in our cities infrastructure2 . ;oordinatin_ and drivin_ searter [itq holi[q3 . Driv ing the take- up of smart technology, to improv e the sustainability of our cities and driv e innov ation9s hart of t`e Keart ;ities hlan$ Hriee Einister$ Eal[ole T urnbull, rev ealed a funding plan to build 3 0 - minute cities , where residents are able to cut their daily total commute to an hour each day. T he plan inv olv es estaZlis`in_ a hrivate se[tor infrastru[ture finan[in_ unit and a commitment of $ 5 0 million to accelerate planning and dev elopment works on maj or infrastructure proj Smart city initiativ es are also on the agenda for state and local gov ernments, with new smart city ideas and plans being discussed, debated and announced on a regular basis.]]]]]]]

8 9 Hriee Einister of 9ustralia$ Einister for Eabor hrobe[ts$ Einister for ;ities$ 2 0 1 6H ouse prices vs distance from C B D , M elbourne for selected y earsNominal house price ($ )2 ,0 0 0 ,0 0 01 ,8 0 0 ,0 0 01 ,6 0 0 ,0 0 01 ,4 0 0 ,0 0 01 ,2 0 0 ,0 0 01 ,0 0 0 ,0 0 08 0 0 ,0 0 06 0 0 ,0 0 04 0 0 ,0 0 02 0 0 ,0 0 0001 02 03 04 02 0 1 3 Distance from M elbourne Central B usiness District ( km)Source: Department of Infrastructure and R egional Department, State of Australian Cities 2 0 1 4 - 1 5 ,Commonwealth of Australia, Canberra, 2 0 1 5 .2 0 0 9 - 1 02 0 0 0 - 0 11 9 9 0 - 9 15 0 +H o u s e p r i c e s v s d i s t a n c e f r o m C B D , M e l b o u r n e f o r s e l e c t e d y e a r s4| Australian infrastructure: some facts and figures E Y 2 0 1 6 Smart city is a broad ranging concept with ambitious policy goals.]

9 At its heart, smart cities aim to harness a range of tools to build stronger and more resilient cities that improv e the q uality of life of citizens. E Y s approach to smart cities is displayed in the diagram below. It starts with a set of principles that form the pillars of smart cities data driv en, interconnected, intelligent, collaborativ e and streamlined. T hese principles are applied to different focus areas to generate ideas and prov ide for a new and holistic way of thinking about our cities. D ata D rivenCapturing, integrating, enriching, storing, and sharing data to improv e the decision- making abilities of the cityC o llabo rativeCity employees and citizens j oining together to work collaborativ ely. T ransparency and open data is key1|4|S treamlinedSystems- of- engagement are reworked to reduce the barriers between the gov erning and the gov erned . Complexity is greatly reduced.

10 Citizens are engaged through multiple |F o c us areasS mart c ity p rinc ip lesI nterc o nnec tedSmart cities lev erage the Internet of T hings to enhance the data collected from traditional systems, and improv e a city s ability to sense and respond 2|I ntellig entUsing analytics and cognitiv e tools to driv e behav ioural change3|S treamlinedProv iding citizens with serv ices that are accessible, conv enient and efficient 5|I nterc o nnec tedLev eraging the Internet of T hings to improv e the city s ability to sense and respond2| Smart education energy Smart government SmartSmart mobility Smart economy Smart justiceSmartsecuritySmart health Smart culture Broadband environment Smart GreenDigitalB uild and operateF u n d i n ga n d d e s i g nS t r a t e g y a n dm a r k e t i n gS mart cityfocus areasV i s i o na n di n n o v a t i o nB i g d a t aF a s t e r d a t as p e e d s I n t e r n e t o fT h i n g s I n c r e a s i n gc o n g e s t i on S o c i a ln e t w o r k s m u l t i - d e v i c e su s a g e I m p o r t a n c e o fl i v e a b i l i t y a n ds u s t a i n a b i l i ty T ec h no lo g ic al trend sB eh avio ral trend sU rban trend sI n c r e a s e i nm o b i l i ty N e w w a y so f w o r k i ng