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Infrastructure Victoria sets out 30-year strategy

Urbanisation, population growth, climate change and emerging, disruptive technologies will force change in the infrastructure needed for the state of Victoria in Australia over the next 30 years, according to a new discussion paper.29 Feb 2016

Infrastructure Victoria was set up in September 2015 and asked to develop a 30-year strategy for the state's infrastructure, with a list of priority projects. In a discussion paper released this week, it explained its principles and objectives for the plan and asked for feedback.

Changing demographics and population growth, combined with environmental issues and a transitioning economy will all have an impact on infrastructure, the report said. The population of the state is likely to grow from 6.1 million to 9.4 million, with 82% of this growth in Melbourne. The proportion of the population aged over 65 is likely to increase from 15% in 2016 to 21% by 2046.

This population will need appropriate infrastructure, but "this comes with a cost", the report said. "All infrastructure funding comes from the community. Additional funding comes from either increased government taxes or user charges," it said.

Formal consultation on the draft objectives and needs will close on 11 March. A full strategy report will be published by the end of this year, Infrastructure Victoria said.

In that final report, Infrastructure Victoria will explore different funding models, including direct and indirect user payments for road and public transport; beneficiary charges such as land value uplift, developer contributions and betterment levies; as well as privatisation of existing assets, it said. This follows the Australian Infrastructure Plan, released last week, which recognised the lack of funding capacity and looked at options for closing the funding gap.

Infrastructure expert Simela Karasavidis of Pinsent Masons, the law firm behind said: "Infrastructure Victoria’s inaugural report is awaited with great excitement. But there is a great deal of pressure too. Infrastructure Victoria’s report cannot be just another report on ‘needs’ and ‘different funding models’. There are many such reports."

"In order for Infrastructure Victoria to truly make its mark, the final report must, as a minimum, speak to the real infrastructure needs of Victorians and not just what is easy to achieve or what has the most political mileage. The ‘different funding models’ explored must not be a generic run through of what we have all read and seen before," Karasavidis said.

Last week, PricewaterhouseCoopers said that the reforms proposed by Infrastructure Australia could increase the country's gross domestic product (GDP) by AU$39 billion ($27.7 billion) a year by 2040.

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