Mar 12, 2010

Speech to ThinkFuture: Smart Infrastructure Conference 2010

Speech to ThinkFuture: Smart Infrastructure Conference 2010

Parliament House, Canberra

The Hon Anthony Albanese MP

The Minister for Infrastructure, Transport,

Regional Development and Local Government

Leader of the House

Member for Grayndler

Friday, 12 March 2010

I thank you all for coming to Canberra today for this important conference.

Some of the best and brightest from the public and private sectors are here today.

It is an opportunity to examine our infrastructure systems with fresh eyes and to develop a forward looking agenda for smart infrastructure.

It is an opportunity to consider smart infrastructure across transport, energy, water and communications.

Today, I hope to go beyond a discussion of individual applications, important though that is.

I want to pose two questions to you that focus on the system as a whole…

How we make our infrastructure systems smarter and more responsive; and what policy settings we need to support public and private investment and innovation in smart infrastructure – a timely question as we emerge from a global downturn.

In our first two years, the Rudd Government has reformed the institutional arrangements for infrastructure planning and delivery in Australia.

And we are rolling out unprecedented investment in infrastructure. We’ve doubled road funding and quadrupled rail funding.

We’ve invested in water infrastructure for our cities.

And our challenge is to get maximum bang for our buck, and to build a more seamless national economy that is more productive, and globally competitive.

And it is a rare opportunity to equip our economy for the decades ahead with the smartest, most effective infrastructure available.

***

I was amused to read one journalist describe ‘smart infrastructure’ this week as ‘gobbledegook’.

With respect, I beg to differ.

‘Smart Infrastructure’ is shorthand for innovative, technology-based, adaptive infrastructure. Infrastructure that once built, could serve our economy’s needs for the rest of this century.

Not long ago, this was still a nebulous ‘new-age’ concept.

When I announced the establishment of this Inquiry, I flagged the enormous potential to apply advances in information technology to tackle bottlenecks and urban congestion.

And Australians are now beginning to see practical, every day examples of smart infrastructure.

Traffic signals that prioritise bus flow.

…Our investment in the Kwinana Freeway in Perth will help install advanced technologies like variable speed limits and lane management systems. When complete, road users will get real time traffic information, freight vehicles will get priority access when needed, and all will benefit from a safer road and more integrated road and transport systems.

Or in energy, our $100 million investment in the Smart Grid, Smart City demonstration project, trialling advanced grid technologies to improve energy efficiency to homes and businesses.

Technologies that allow power generators to manage and control real-time grid performance – meaning more reliable, efficient electricity, less energy loss, and less greenhouse emissions.

Of course, we know from the experience overseas that increased reliability is nothing to sniff at. In the US, the Department of Energy recently funded Smart Grid technologies, which are helping reduce outages and disruptions that account for more than a quarter of electricity costs.

So it’s fair to say that even first generation applications are proving their mettle, and improving our management of congested cities.

***

There are lots of good ideas out there, and this inquiry and today’s conference are about harnessing them.

But a broader focus on infrastructure systems is important.

We like to think in terms of systems. There are incarnations of systems theory in all major schools of thought.

When I studied economics at university – not so long ago – we were trained to think about the economy as a system of moving parts, where change to one variable affects others.

Strangely, this idea hasn’t always taken hold of our thinking on infrastructure.

Infrastructure is a system, where one change to one part can alter the dynamics, the effectiveness and the operation of other parts in the network.

Much of the former Government’s land transport plans focused on regions not cities, pitted road against rail, and failed to focus on people.

You can’t plan the movement of goods, without also planning the movement of people.

You can’t look at transport in isolation from land use planning and housing policy.

That’s why the Rudd Government is focusing Commonwealth activity on system-wide approaches to infrastructure.

And I want to quickly run through four such reforms we have made to infrastructure.

First. Two years ago, we set up Infrastructure Australia, a body to drive evidence based investment in infrastructure, by looking at the needs of the national economy as whole. IA was tasked with working across all tiers of government, and all sectors of the economy.

IA got to work and produced a national audit of infrastructure – looking at what we have – and identified seven national priorities – planning what we need for the future.

We set it up because Australians and the business community were tired of ad hoc investment decisions linked to electoral cycles, and sick of parochial approaches to infrastructure.

This systems-level approach is the same one being applied to other national reforms – our national freight and ports strategies, and the roll out of National Transport Regulators.

Second. Through the COAG Working Group on Infrastructure, the Commonwealth has begun working on strategies to more productively utilise existing transport infrastructure.

Let’s face it – government budgets are feeling the pressure of last year’s global downturn, and governments don’t have bottomless pockets.

All levels of government need to get smart and use our existing infrastructure better.

A great example is in Albion Park, where you have the busiest regional intersection in Australia. A $700,000 investment there has installed traffic cameras and uses specially designed algorithms to moderate traffic flows, a project between NICTA (who are here today) and the NSW RTA.

The result has been an increase in the intersection’s capacity, such that a planned build of some $20 million won’t be needed there for up to another 10 years.

So the COAG work will be very important for optimising our use of existing infrastructure. And smart infrastructure will be at its core.

Third. Just last week, I released the first State of the Cities Report.

This report laid the groundwork for the development of a national urban policy, shining a bright light on where we must focus our efforts.

It told us that there are avoidable costs of congestion, estimated at some $10 billion each year…and if we don’t act, these costs could double to $20 billion in 10 years.

It also told us that car dependency in cities is increasing faster than population growth.

And the report highlighted more feedback loops in this urban jungle of ours…Urban expansion has lengthened distances between homes and offices, meaning more cars on the road, and higher transport costs.

And the result is more congestion – along with greater exposure to oil prices, less time at home with our children, and higher environmental costs from lost habitat and agricultural land.

Again, smart infrastructure will have a role to play in making our cities function better.

So this information is a critical first step for system-wide improvements to our cities, that better focus the collective effort of all sectors and all levels of government.

Fourth and finally.

Smart infrastructure needs a communications system fit for the 21st century.

World-class broadband will be a game changer for Australia.

It is a critical modern infrastructure platform – or a system – on which new smart infrastructure applications will thrive.

A key area is using more efficient scheduling of freight and passenger rail to increase the capacity of the rail network as a whole.

The Rudd Government’s investment of $45 million to trial Advanced Train Management Systems in South Australia deploys satellite based GPS and wireless Broadband Communications to manage train movements.

If successful, the ARTC will look to rolling out this technology across its interstate and Hunter Valley networks, replacing ageing physical land based control and signalling systems and permanently increasing the capacity of their rail network.

It’s simple improvements like these that Access Economics estimates could boost GDP by up to $13 billion a year.

And like all systems – there are feedback loops at work here too.

The benefits of smart rail systems are reduced travel times, improved reliability, cost savings, and the ability for more trains to travel on the network at any one time safely.

This in turn promises to make rail more cost competitive, taking trucks and cars off the road, lowering emissions, reducing congestion, and reducing accidents.

So Broadband will boost productivity, and enable creative approaches to combating urban congestion, allowing more people to work from home, and making transport networks more efficient.

And it will benefit individuals and businesses wherever they are in Australia, changing the way we do things – because opportunities will no longer be defined by location.

***

And there is another way the Rudd Government can support smart infrastructure in Australia.

That is to champion on the national stage excellent design that delivers innovative solutions to infrastructure challenges.

Today, I am pleased to announce the establishment of two Australian Government Smart Infrastructure Awards.

The major award will be the Australian Smart Infrastructure Award for an infrastructure project that embeds innovative technology solutions in one of Infrastructure Australia’s seven priority areas.

The second award will be the Smart infrastructure Research Award, with a research grant of $25,000 for a smart infrastructure research proposal – again in one of IA’s priority fields.

The nomination process for the inaugural 2010 award starts from today and closes on the 14th of May. I urge you to keep your eyes and ears open at today’s conference – we would have some fine nominees in this room already.

And I thank Infrastructure Partnerships Australia, which has generously agreed to host our awards from 2011.

The Rudd Government believes that excellence should be rewarded, and we are strong supporters of the IPA’s annual awards, which were held last night.

It was a very impressive line-up this year.

I congratulate all the 2010 IPA award winners, and especially Melbourne Channel Deepening Port for their well deserved recognition as ‘Project of the Year’.

***

Let me conclude by making the point that today’s discussion is about making infrastructure investments go the extra distance, to build the productive capacity of our economy – and to change the way we do things now, and into the future.

And above all, it is about setting Australia up for the big economic challenges ahead – an ageing population, a changing climate, and an increasingly competitive global economy.

Enjoy the conference, and I look forward to hearing about your ideas, and your vision for Australian smart infrastructure.