CEO’s Message

Reigniting a new investment and reform agenda

The last twelve months have been a challenging period for the national economy and for the infrastructure sector. At the start of the year, we were leading the world on the containment of COVID-19, with a clear path to recovery. Since then, we have seen lockdowns and border closures frustrate the national recovery.

Our construction industry was placed on hold and remains constrained in NSW, Victoria, and the ACT. We’ve also seen concerning trends towards greater direct market intervention by governments across a number of infrastructure markets.

Despite these challenges, ambitious state governments have pushed ahead on reform. We’ve seen distance-based road user charges implemented in Victoria and announced in NSW, South Australia, and Tasmania, a renewed push towards public transport franchising, and a move to introduce broad-based land tax in NSW.

We have also seen governments deploy a new wave of infrastructure stimulus across social housing, education, and transport – investments which are providing a ballast to the national economy in these uncertain times.

Over the course of today’s Conference, public and private sector leaders will come together to reflect on this progress and explore how we can ignite a new investment and reform agenda. Among the many topics to be examined this year will be the accelerating priority of decarbonisation and the shifting appetite for ESG investments. As we saw with the recent release of our 2021 Australian Infrastructure Investment Report, ESG has evolved into a key decision-making factor for investors.

While ESG and social licence considerations have been a recurring themematic for investors in past years, they now sit at the forefront of decision makers minds. In fact, 93 per cent of investors agree that ESG has become more important over the past two years.

While there is strong demand for ESG-friendly opportunities, investors have made clear that capital is a coward and will flow to markets that treat it best. Greater regulatory clarity alongside a more coherent national decarbonisation framework is likely to catalyse investment in more sustainable energy and see Australia outperform its global peers. However, concerted action by governments is required to see these opportunities realised.

We’ll also explore how the digitalisation of the economy is becoming an accelerating and sticky trend, with COVID-19 heating up the market for telecommunications and data-related assets. The ongoing expansion of our digital networks through the deployment of 5G technology will only serve to increase the velocity of change.

Government will also need to contend with the implications of a changing telecommunication landscape, with businesses moving to de-merge their infrastructure assets from their retail and service operations. A move that once again must prompt governments to reassess their own roles in the sector, particularly through ownership of businesses and assets like the NBN.

Looking over the horizon, it will also be critical for governments to recommit to market principles by prioritising reforms that improve efficiency, better align regulation with users’ interests, and remove impediments to the wave of private investment that will be required to support simultaneous transitions and disruptions.

A focus on reforms that shift the infrastructure funding burden away taxpayers to users will also be needed to ensure we create fairer infrastructure now, and a stronger economy tomorrow.

Over the course of the 2021 Partnerships Conference, I look forward to examining these priorities with you, our senior leaders, to help secure our national recovery.

Adrian Dwyer

Chief Executive Officer Infrastructure Partnerships Australia