The Turnbull Government must respond to the advice of Reserve Bank Governor Philip Lowe about the link between inadequate infrastructure investment and high housing prices by lifting rail and road investment in next month’s Budget.
In a speech in Melbourne last night Mr Lowe said an imbalance between population growth and housing construction had been “compounded by insufficient investment in the transport infrastructure needed to support our growing population’’.
Mr Lowe continued: “Nothing increases the supply of well-located land like good transport links. Under-investment in this area is one of the factors that has pushed housing prices up”.
This is the latest of several recent warnings from the RBA about the need for increased infrastructure investment, which would boost economic activity and support jobs as well as easing pressure on housing prices and delivering long-term productivity gains.
Since taking office, the Coalition has cut infrastructure investment but pretended otherwise with frequent re-announcements of old projects funded by the former Labor Government.
Australian Bureau of Statistics figures show total public sector investment in infrastructure declined by 20 per cent in the Coalition’s first two years in office.
The figures also show that quarterly total public sector infrastructure investment has been lower in all 12 quarters under the Coalition than in every single quarter under the former Labor Government.
After years of pretending to have increased investment, it is time for the Turnbull Government to actually invest in new rail and road projects.
Australians are spending too long in traffic jams and, as Mr Lowe pointed out last night, the lack of adequate infrastructure is affecting housing prices.