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Australian infrastructure reforms could increase GDP by AU$39 billion, says report

A report by PricewaterhouseCoopers (PwC) has found that the reforms proposed by a new report on Australian infrastructure could increase the country's gross domestic product (GDP) by AU$39 billion ($27.7 billion) a year by 2040. 22 Feb 2016

Infrastructure Australia published a plan this week proposing changes to infrastructure development in the country over the next 15 years. The Australian Infrastructure Plan looks at the challenges and opportunities that the country is likely to see and proposes 78 changes that should be made to drive growth.

In its report on its modelling of the proposed reforms, PwC said the plan's reforms could increase GDP per household by almost AU$3,000 per annum.

Proposed changes to the funding models in the transport sector would improve productivity and boost GDP. "Overall, the suite of transport reforms increases GDP per annum by AU$23.8bn in 2031 and AU$34.8bn in 2040," PwC said.

"Privatisation and price deregulation reforms in the energy sector are estimated to generate additional GDP per annum of AU$1.7bn in 2031, and AU$2.3bn in 2040," it said, while the transfer of state-owned metropolitan water utilities to private ownership is estimated to increase productivity and add AU$1.6bn to annual GDP by 2040.

The reforms would have the strongest impact in Western Australia and Queensland, as these states manage the change from mining-based economies, the report said.

Key proposals by Infrastructure Australia include the consolidation of funding pools into one infrastructure fund; the establishment of a road user charging scheme, initially for heavy vehicles and eventually for all passenger vehicles; and the transfer of all remaining publicly owned electricity networks, water utility businesses and retail businesses to private ownership.

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