One of the greatest long-term challenges facing Australia is managing the balance between population growth and our capacity to build the necessary infrastructure.
The effects of failing to get this mix right are being felt in Australia's cities, particularly Melbourne and Sydney. Traffic congestion, crowded public transport, a lack of affordable housing, and insufficient amenities and services in the rapidly expanding urban fringes are diminishing the quality of life of many people.
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For example, traffic congestion is the biggest brake on Victoria's economy. As Australia's population has expanded at a historically high rate in the past decade, with immigration accounting for about two-thirds of the increase, public and private investment, although substantial, has failed to keep up. Transport issues have become among the nation's most economically and politically pressing.
Although the immediate problems centre on congestion, in the longer term more regional, interstate and international freight and passenger links will clearly be needed. A perennially discussed element has been a fast rail connection between Melbourne and Sydney, whose populations are forecast to double by about the middle of the century.
That rail link has been discussed for half a century, and projects have been knocked back by governments on cost grounds. But perhaps, finally, a tipping point has come. International experience shows the viability and desirability of fast rail between metropolises. Further, hefty, impetus has just come from Infrastructure Australia, which is warning that unless the land for the line is secured soon, it will be developed and would thus cost billions of dollars more to buy in only a handful of years. There are evident legal and practical restraints on locking up the land without properly compensating its owners, so a decision needs to be expedited.
Such decisions are about future generations. They will benefit mightily from infrastructure of all kinds, and so should contribute to the cost. There is a huge role here for government, because, as the Reserve Bank has pointed out, it can borrow cheaply, particularly with interest rates having been at historical lows for many months.
![Fast train, coming slowly. Maybe.](http://web.archive.org./web/20170712223941im_/https://www.fairfaxstatic.com.au/content/dam/images/g/n/n/c/g/m/image.related.articleLeadwide.620x349.gx6q32.png/1499414638208.jpg)
But there may be a role for private investment, too. There are proposals for a privately financed high-speed rail link between Melbourne and Sydney, and for a third international airport for Melbourne. Both projects are thought likely to be needed. The most pressing is the rail link, because of the threat of a prohibitively big land-cost rise and because of the size of the project.Â
Ultimately, Australia has much to gain from favouring a policy mix that promotes solid growth in population and investment in the assets that allow economies and communities to thrive.
- A note from the editor – to have Age editor Alex Lavelle's exclusive weekly newsletter delivered to your inbox sign up here: www.theage.com.au/editornote
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