Addressing the infrastructure funding gap

We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

Australian Local and state government departments are now very aware of the Infrastructure Gap. Yet when addressing the gap the focus is not on solving the problems but on providing additional funds to cope with the growing demand. We need to drastically change the way we think about the problem and instead of funding growth we need to address the problem and slow down the damage.

The infrastructure task facing the local government sector is growing. And yet the evidence suggests that councils are struggling to increase their “core” sources of funding fast enough, making it extremely difficult to meet the required investment needs.” Ernst & Young Report Local Infrastructure 

Road construction and maintenance methods have changed very little in the past hundred years. Despite the fact we are very aware no item of infrastructure will last 100 years without fading, becoming unstable and unsafe, we continue to install items in static unforgiving concrete foundations. This simply creates a costly cycle of damage, waste and on-going consumption.

goal_zero_harm_zero_waste-2We need to stop thinking of urban environments as static environments subject to constant decay and start thinking of them as more fluid environments able to transform to meet changing needs throughout the day, week or decade. We need to stop thinking of finite carbon resources as disposable and start facing the fact that they are depletable and every effort should be made to preserve them and reduce, reducing waste and reducing the on-going consumption.

There is sustainable technology available that enables you to build sustainable cities and to heal existing cities. The city remains protected against damage for generations. Unlike traditional cities that are in a constant state of decline, these Smart cities grow increasingly efficient as the funds saved can be used to fund further improvements.

By implementing sustainable technology and improved work practices, to:

  • reduce damage
  • reduce costs
  • reduce waste
  • reduce risks
  • reduce disturbance
  • improve effectiveness

provides a far more long-term and sustainable solution that constantly increasing the capital resources (required to fund capital works and capital maintenance to address asset renewal needs). 

Ernst & Young was engaged on the instructions of the Department of Regional Australia, Local Government, Arts and Sport (“Department”) to review the prioritisation and financing of local infrastructure, in accordance with the official order placed on 29 November 2011.

Local infrastructure is the backbone of our local communities. Poorly maintained vital infrastructure has negative impacts on the economy, environment and social amenity. What is clear is that Australia needs to create strong foundations upon which our communities can grow and prosper. Major reports commissioned at a national level in the last decade include the Hawker Report of 2003, the National Financial Sustainability Study of 2006, and the Productivity Commission report on the revenue-raising capacity of 2008. The Allan Report of 2006 in New South Wales and sustainability reports in most other states.

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