Infrastructure in the driver's seat for productivity

For a lot of people, productivity can be a hard concept to conceptualise, but Peter was quick to paint it in real terms. In Australia, he said, it takes five days to create what the American market can make in four. We are in effect, 20 percent less productive. Why does that matter? Because it’s pushing prices up and wages down.

Due to our ageing population, more people are leaving the workforce in New South Wales than joining it. Those of us left could work 20 percent harder, sure. But as Peter pointed out that’s not a smart battle to fight. If we want to win the productivity war and ensure the next generation’s wages don’t slip below ours, we need to find smarter ways of working, and utilise our existing assets—physical, human and intangible—much better.  

Both Peter and Marika were aligned on this point. Whether it’s roads, ports, or commercial buildings, we need to shine a light on inefficiency. We need to make our assets work for us.

Peter made the point that most commercial buildings in the inner city sit idle and underutilised for a large percentage of the time (nights and weekends). Unshackling ourselves from the nine-to-five and staggering work hours could not only unlock the productivity we are currently losing in our buildings, but across the entire infrastructure network.

Marika gave the example of how NSW’s port capacity could be enhanced through a more flexible approach to the logistics infrastructure networks that surround them. If trucks were able to access the ports 24 hours a day, the flow of cargo could be ‘smoothed’ with less trucks contributing to congestion in peak hours for city roads, while ports could optimise their operations and unlock lost productivity through true non-stop operation.

Peter spoke about the review that The Commission has been doing into the productivity impacts of our current system of developer contributions in NSW. As professionals working in infrastructure, many of us have seen the problems that projects face when contributions threaten to tip an initiative beyond viability.

It was interesting to hear him speak about recommendations for clearer data delivered upfront about the contributions a land parcel will attract, and even ideas around the spatial visualisation of this information online. Another interesting point the review has considered is the way legislation implemented with good intent—rate capping designed to protect everyday consumers—may be creating other barriers (equitable access to infrastructure) by artificially inflating contributions, and strategies to address this.      

Hearing Marika speak about NSW Ports’ experience of COVID-19 was fascinating. She joked about how operations at Port Botany could be used as a metric for broader economic health and trajectory, but it was interesting to hear just how accurate a reflection of what’s going on shipping import/exports provide.

She cited the flips that her organisation has seen on certain import categories, with household goods and home improvement products exploding as Aussies diverted income they might otherwise have spent on travel and experiences. 

Another metric Marika shone a light on was the empty container phenomenon. For every ship leaving Australian export terminals a percentage of the containers aboard them are, in fact, empty. This is just one example of the many productivity issues we need to find ways to address across all areas of the economy, and the infrastructure assets and supply chains we rely on to keep our society successful and sustainable into the future.

The full discussion is available for Infrastructure Partnerships Australia members via the IPA's InfraFlix platform, or you can listen to insights from industry leaders including Marika Calfas on the IPA Podcast.