Poor infrastructure planning costing WA growth: PCA

The costs of poor planning and delayed infrastructure in Western Australia have been revealed according to a new report from the Property Council of Australia.

The PCA found there had been considerable underinvestment in WA’s infrastructure over the past 40 years and the value of WA’s current infrastructure stock was $59.2 billion below the accepted global average.

Linking infrastructure provisioning to the property market, the report found poor planning made it more difficult for property developers to secure debt financing and attract capital.

It also found operating in an uncertain infrastructure environment meant property developers were subject to increased holding costs that could lead to changes to the best use of land or less attractive investment proposals and ultimately slow down developments and reduce competition.

PCA commissioned ‘Mind the Gap: The costs of WA’s infrastructure provisioning framework’ following the deferral of MAX light rail and airport rail link projects and claims infrastructure had become a “political football”.

The report found delaying property development projects because of poor infrastructure provisions, could over the course of a year, if 10 per cent of projects were delayed, result in $1.2 billion in deferred value for the economy.

It found the first step to improving the situation was admitting there was a problem, namely that WA’s public investment on infrastructure which averaged about 1.5 per cent of gross state product lagged behind international infrastructure investment norms of 3.8 per cent of GDP.

PCA WA executive director Joe Lenzo used the findings to reiterate calls for an independent infrastructure body that would take responsibility for planning, prioritising and delivering projects by taking a longer-term approach planning up to 20 years in the future.

“Implementing a strong infrastructure provisioning process will ensure that scarce infrastructure dollars are directed where they are most needed and where the best value for money can be realised,” he said.

“The process needs to be independent, transparent and accountable. Infrastructure should not be a political football nor should projects simply be dropped because something else attracts the government’s attention.”

WA's community appears to be divided on how best to facilitate investment in infrastructure.

Major groups' positions can be found here as part of Business News' 20-page infrastructure report published earlier this year.