The Property Council of Australia has launched groundbreaking research into how Queensland should fund its public infrastructure.
The research, launched at the Property Council’s Queensland State Conference,
The brawl over sprawl, concludes that governments’ reluctance to use debt to fund major infrastructure is costing the community thousands of jobs and billions of dollars of lost economic growth.
Prepared by the Allen Consulting Group for the Property Council of Australia, the
Financing Public Infrastructure in Queensland report challenges governments to fundamentally rethink how our cities are recapitalised.
The report found that public debt is the most efficient and economically beneficial way to raise $5 billion for public infrastructure, whilst also:
- creating over 226,000 new jobs over a 15-year period;
- delivering $12.6 billion increase in economic output;
- providing the infrastructure items up front; and
- having zero impact on the state’s AAA credit rating.
Property Council executive director Robert Walker said that the case for the greater use of public debt was strong.
"Government at state and local levels should learn that recapitalising our cities is essential to maintaining and enhancing their economic, social and environmental sustainability," he said.
"The report shows a strong preference for the use of approaches that match the cost to the community to the benefits from the use of infrastructure which are obtained over time – namely public debt.
"Failure to learn from this and failure to channel our resources into urban public infrastructure will hinder southeast Queensland’s economic opportunities and impact on the vibrancy and livability of our urban areas
"But governments must explore all the options."
The report finds that developer levies are by far the least efficient method:
- costing 104,000 jobs,
- costing the economy $0.7 billion dollar in economic output,
- increasing housing prices and business costs, and
- delivering infrastructure late depending on levy income.
"The general thrust of the report indicates that using more debt funding to facilitate infrastructure investment is at odds with the current thrust of fiscal policy orthodoxy that debt is ‘bad’.
"This is not the case. In fact, it is the most logical solution to raising the much-needed infrastructure funding. Government debt matches the costs with the benefits. Infrastructure investments provide their benefits over time, and debt involves repayment over time.
"Queensland’s population is growing at an alarming rate and without the necessary infrastructure to support it, we are looking at a crisis situation. Lack of funding has been what’s holding Queensland’s infrastructure progress back, and with this solution in mind, we urge the governments to take heed and maximise this opportunity."
