The communities most at risk to economic shocks like COVID-19 are those that lack economic diversity.
Infrastructure can help with this. It creates opportunities for industries to grow, reduce costs and work more productively.
Inland Rail is a great example. With a faster, more reliable heavy freight link strategically integrated with export port terminals in Melbourne and Brisbane, the overall cost of moving goods along Australia’s east coast will be reduced, while our capacity to move them greatly enhanced.
The estimated result of our investment in Inland Rail is a $16 billion increase to gross domestic product (GDP) throughout the project’s delivery and first 50 years of operation (ARTC, 2020). There is also evidence that regional infrastructure projects generate up to five jobs for every million dollars of investment.
Regional infrastructure can help lower commercial barriers, which gives producers more scope and incentive to diversify the products they bring to market. It’s is an insurance policy for regional areas that have traditionally suffered most from the devastating social and economic impact of core industry collapse (eg mining and manufacturing).
Certain assets can also help regional communities to better respond to emergency incidents such as severe weather events. For example, road upgrades might provide an alternative route for emergency services to respond to bushfires and a safer path for community residents to evacuate. While emergencies might be relatively rare (low frequency), the 2019/20 bushfire season proved that the social and economic impact when they do happen is huge.
When it comes to the business case, it is important to position this not just in terms of the probability and frequency with which emergency events occur, but in terms of the negative consequences that could be avoided through improved preparedness and resilience.