Last month the National Australia Bank (NAB) board visited northern Victoria’s Sunraysia region to talk to customers about what they were seeing, their challenges and the opportunities they were seizing.
What they heard was farmers across several industries have enjoyed strong growing seasons in the past year as drought conditions eased.
We also know while these customers were reporting big yields, they were let down by key infrastructure like outdated roads and rail.
We also know there is vital community infrastructure which needs developing at a community and at a government level.
There were some strong commitments in the Federal Budget for regional Australia which were welcome, but we are seeing across various sectors that business and community cannot wait for government.
This week I spoke at the Australian Financial Review national infrastructure summit about making sure we are building the right infrastructure, at the right time, in particular when it comes to regional Australia.
Infrastructure is important for the quality of our community cohesion; it increases productivity, improves standards of living, quality of life, creates jobs and investor returns.
And it sits smack bang in the middle of our economy: in 2011 infrastructure services contributed $187 billion or 13.3 per cent to Australia’s gross domestic product.
By 2031 this is expected to double to $377b.
But we are in a race and it is one we are losing.
Australia is expected to add 16 million people to its population within 40 years.
Some will be absorbed by the cities but millions will head to our regional centres and we need to review our needs.
Regional centres are a significant contributor to our economy - around two-thirds of Australia’s export earnings come from regional industries.
Yet in many ways, in regards to infrastructure, regional Australia is living in the past.
We see communities across the board which are getting fed up with waiting for government to deliver and are taking matters into their own hands, but what we need to work on is how we can put people and communities at the centre of the decision-making model to facilitate opportunities.
Last year NAB committed to help finance $100b worth of infrastructure projects over the next seven years – reinforcing our role as a leading infrastructure bank, and underpinning our aspiration to play a greater role in financing and facilitating.
We are now crunching some more numbers and expect NAB will help finance $50b worth of regional infrastructure projects in the next 10 years.
It is important we build the right infrastructure in the right place if regional Australia is going to play a more active part in our country’s future.
But our next steps are very much about engaging communities – how can we put people in the centre of the picture so that they feel empowered and educated in order to work together with government and stakeholders to make community-led infrastructure happen.
Governments and councils want these assets to pay for themselves, but it is simply not realistic to have that approach to every piece of infrastructure.
This is where a lot of community infrastructure gets left on the drawing board.
We need to redefine the value of the asset and turn the intangible benefits to the community into real life outcomes and factoring that into the cost benefit model.
The library or aquatic centre can provide a modest return to the council, but it can also supply an enormous benefit to the community.
This is the case for many pieces of local infrastructure and this is what we need to assess – not just the business opportunity, but also the community value.
When it comes to community infrastructure we need to reset our priorities.
Profit isn’t the sole purpose, service to the community is.
- Steve Lambert is executive general manager of capital financing at National Australia Bank
