August 2015

Prepared by:

Australian Infrastructure Audit A regional response to the findings of the Audit in relation to the Illawarra region

Contents Background ................................................................................................................................................... 2

Executive Summary ...................................................................................................................................... 3

1 Introduction .......................................................................................................................................... 5

1.1 Introduction to the Illawarra region ............................................................................................. 5

1.2 Regional economic snapshot ........................................................................................................ 6

2 Key findings relevant to the Illawarra region ....................................................................................... 8

3 Addressing key infrastructure challenges ............................................................................................ 9

3.1 Connectivity – ensuring efficient infrastructure networks to link businesses and boost trade .... 9

3.2 Productivity – increasing national productivity levels through strategic investment in infrastructure .......................................................................................................................................... 11

3.3 Population – how to ensure our infrastructure supports expected population growth ............. 12

3.4 Funding – addressing resourcing issues through reforms .......................................................... 14

3.5 Governance – the need to improve integrated planning, project selection and stakeholder consultation ............................................................................................................................................ 15

3.6 Regional – understanding how infrastructure improvements can facilitate rural and regional growth 16

4 Conclusion .......................................................................................................................................... 18

5 Bibliography ........................................................................................................................................ 19

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Preface

This response to the Australian Infrastructure Audit Report identifies some key infrastructure issues facing

the Illawarra within the broader Australian context.

Identifying and responding to the needs of regional communities is a priority of the Regional Development

Australia (RDA) network of regional committees. RDA Illawarra and the Illawarra Business Chamber

collaborate closely on a number of regionally important economic development issues and have come

together to provide a joint submission to this Audit.

The members of the collaborative group represented by this joint submission are as follows:

Organisation Representative Role Signature

RDA Illawarra Natalie Burroughs Chief Executive

Officer

Illawarra Business

Chamber

Debra Murphy Chief Executive

Officer

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Background

On 22 May 2015, Infrastructure Australia publicly released the landmark Australian Infrastructure Audit

(the Audit). The Audit is available at: http://www.infrastructureaustralia.gov.au/policy-

publications/publications/Australian-Infrastructure-Audit.aspx.

The Audit provides the evidence base for the development of Infrastructure Australia's Australian

Infrastructure Plan (the Plan). This 15 year Plan will make recommendations on project investment

priorities, with a reinvigorated Infrastructure Priority List, and specific areas for policy reform.

Public submissions in response to the Audit are due 14 August 2015. Infrastructure Australia will use the

Audit and responses to prepare the Plan due to be submitted to Government in December 2015.

All official submissions will be published on Infrastructure Australia’s website following the release of the

Plan.

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Executive Summary

This submission aims to highlight some of the unique infrastructure challenges of the Illawarra region and

linkages with broader regional, metropolitan and national infrastructure issues to try to ensure that

consideration is given, through the development of the Plan, as to how best address these issues, not only

for the Illawarra, but other regions at large.

This submission also aims to highlight some of the opportunities that the development of a 15 year

Australian Infrastructure Plan provides to facilitate greater cooperation and coordination between a wide

range of both government and non-government stakeholders in the development of a consistent, evidence-

based Plan to guide infrastructure investment. Without such cooperation and coordination, particularly

between the three tiers of government, there will continue to be poorly aligned priorities and competing

resourcing issues.

We believe that the Audit provides a certain level of analysis that needs to be given greater attention in the

development of the Plan, and infrastructure planning decisions more broadly, particularly in regards to:

The strategic role regions play in terms of underpinning urban economic development should be

reflected in both government policy and funding decisions in relation to infrastructure;

The importance of the regional connectivity in relation to economic growth and national

productivity;

The role that regions, like the Illawarra, play in regards to accommodating growing populations and

taking the pressure off larger metropolitan cities, such as Sydney;

The balancing act between looking at the Illawarra as both a satellite city to Sydney as well as an

important region in its own right;

The importance of well-informed cross-jurisdictional discussion about infrastructure needs and

resourcing realities to ensure that regions are not left behind urban centres in the battle to attract

the required private sector investment going forward; and

Ensuring that from both a planning and governance perspective, in particular, that there is

consistency in definitions between all levels of Government around issues such as capacity, and

that there is consistency with data used across all levels of Government to ensure equitable

decision making.

We believe that with a more ambitious commitment to well-planned, well-coordinated infrastructure

development, regions like the Illawarra will be able to better contribute to a more productive Australia.

The Illawarra region and the regional capital of Wollongong should play a greater role in reducing the

significant infrastructure pressures faced by Australia’s largest city, Sydney. Yet the region currently

experiences connectivity that is 25-30% worse than similar regions and has the second highest National

Highway congestion. The region’s economic indicators, including low participation rates and above average

unemployment levels are systematic of suboptimal investment in the region’s infrastructure.

The three infrastructure projects that would have the greatest impact on the Illawarra region itself and on

alleviating Sydney’s growing congestion costs are:

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1. Complete the M1 (F6) Extension between Waterfall to St Peters by 2020, including investigations to

link to the Westconnex South.

2. Reduce travel time on the Illawarra rail line to 60 minutes – complete engineering and timetabling

upgrades to resolve structural issues between Wollongong to Sydney.

3. Complete the construction of the Maldon to Dombarton railway as a dedicated freight rail corridor

by 2020.

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1 Introduction

Identifying and responding to the needs of regional communities is a priority of the Regional Development

Australia (RDA) network of regional committees. RDA Illawarra and the Illawarra Business Chamber

collaborate closely on a number of regionally important economic development issues and have come

together to provide a joint submission to the Audit.

1.1 Introduction to the Illawarra region

The Illawarra, as defined by the NSW Government, constitutes the four LGAs of Wollongong, Shellharbour,

Kiama and Shoalhaven. Based on this definition, the Illawarra is NSW’s third most populous area, being

home to about 384,100 people, and an expected population of about 459,100 people by 2034.1 In defining

the Illawarra, it is important to note that the Federal Government defines the Illawarra by the 3 LGAs –

Wollongong, Shellharbour and Kiama.

The Illawarra region is the State’s third largest economy, contributing $16.5 billion to the State’s economy

in 2012-13.2 It is also the third largest urban area in NSW totalling 5,620 square kilometres,3 and home to

Australia’s 9th largest city4, Wollongong, located 80km south of Sydney CBD.

The Illawarra is a dynamic and innovative region that boasts emerging growth industries and a skilled

workforce. The region has a strong, yet declining, manufacturing and mining base with a diversifying

economy growing strongly in a number of areas including ICT, high value professional service activities,

education and training, health and aged care, transport and logistics, and e-commerce. The Knowledge

Services Sector (including ICT, Business and Financial Services) employs over 4,900 people in 72 locations

across Wollongong.5

The region’s unique natural and built environments are powerful sources of attraction for businesses

wanting to make long term investments in sustainable enterprises, and for an increasing number of visitors

who want to enjoy the pleasures afforded by our beautiful beaches, rainforests and modern urban settings,

and the rich cultural calendar.

The region has four major economic centres – Wollongong, Shellharbour, Kiama and Nowra – Wollongong

being the largest centre. The region benefits from its close proximity to both Sydney and Canberra as well

as its global connections through the rapidly expanding Port of Port Kembla which supports over 3,500 jobs

and contributes $418 million to the regional economy each year.6 The Shoalhaven Defence Base also

supports over 2,500 jobs and contributes $295 million to the regional economy each year. The University of

Wollongong is also a vital part of the Wollongong economy contributing $2.06 billion in gross economic

output and 7,979 full time equivalent jobs to Wollongong.

The Port of Port Kembla further amplifies Wollongong’s strategic importance not only to Sydney but to

NSW and Australia. Port Kembla for example is the State’s largest grain exporter and the third largest in

1 NSW Government, Illawarra Regional Transport Plan, March 2014, pages 3-4

2 Illawarra Business Chamber, Linking the Illawarra, Improving the region’s transport connectivity, August 2014, p iii

3 NSW Department of Planning and Environment, Draft Illawarra Regional Growth and Infrastructure Plan, 2014 4 http://blog.id.com.au/2012/population/australian-census-2011/top-33-largest-cities-in-australia-by-population/ 5 Advantage Wollongong. 6 NSW Department of Planning and Environment, Draft Illawarra Regional Growth and Infrastructure Plan, 2014

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Australia. The Port handles significant volumes of the State’s grain (2.6 million tonnes in 2012-13) and coal

exports (13.4 million tonnes in 2012-13)7 and is the gateway for all of the State’s motor vehicle imports. The

Port has been designated as the State’s future terminal for handling overflow container trade from Port

Botany.

As part of a Defence White Paper, Illawarra-based Senator Concetta Fierravanti-Wells put forward a

proposal for Fleet Base East at Garden Island to be relocated in full or in part to Port Kembla. RDA Illawarra

has recently coordinated a joint regional submission to support this proposal. A copy of the report is

available at www.rdaillawarra.com.au.

1.2 Regional economic snapshot

The Illawarra regional economy spans a broad range of industries. At a regional level, manufacturing

output represents $8.3 billion, $5.9 billion of which is in the Wollongong LGA. Mining was the second

largest industry sector representing $2.6 billion in output regionally, $2.5 billion of which derives from

within the Wollongong LGA. There are a range of other service sectors among the ten biggest employers

and economic generators in the region including:

• The healthcare and social assistance sector which employs the highest number of people (15%) and

contributes about $2.2 billion regionally

• Education and training – dominated by the University of Wollongong - contributes just over

$1.6 billion regionally and accounts for the second highest number of jobs in the region

• Public administration and safety contributes just over $2 billion and is one of the largest employers

in the region

• Retail trade, also employing a significant share of the regional workforce, accounts for about $1.6

billion in 2014.8

Table 1 - Regional economic snapshot

Indicator Regional Capital: Wollongong LGA

Region: Illawarra

State: New South Wales

Output $24.1 billion $37.0 billion $1.006 trillion

Population 205,231 368,820 7,410,399

Total Number of Jobs 71,968 119,342 2,996,038

Unemployment Rate (Sep 2013)

7.1% 7.8% 5.6%

Number of Businesses 12,100+ 23,300+ 710,300+

Source: Advantage Wollongong, Wollongong Investor Prospectus, May 2014, p 8; and REMPLAN data incorporating Australian Bureau of Statistics’ (ABS) June 2014 Gross State Product, 2009 / 2010 National Input Output Tables and 2011 Census Place of Work Employment Data.

7 Port Kembla Port Corporation Annual Report, 2012-13, page 3 8 Note – all data in this section is obtained from REMPLAN - http://remplan.co/1zbZaVu

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The Illawarra is still a relatively self-contained economy compared with most regions on the periphery of

Sydney, with particularly strong relationships between the housing and labour markets of Wollongong and

Shellharbour, and to a lesser extent, Kiama.

Around 75% of local residents live and work within the region compared with 63% for Central Coast, for

example; and around 96% of local jobs are held by people who live within the Illawarra.

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2 Key Audit findings relevant to the Illawarra region

1. Urban transport: The cost of delay on the Sydney-Newcastle-Wollongong urban transport network was

$6b in 2011. In the absence of any additional planned projects this cost is expected to grow to $15b by

2031.

2. Roads: The Illawarra experiences the second highest National Highway traffic for both light and heavy

vehicles (second only to the Gold Coast).

3. Rail: Passenger loadings on Sydney’s rail corridors are projected to increase over time, reaching or

exceeding crush capacity before 2031 on the Western, North Shore and Illawarra lines, and inner parts

of the Northern and Richmond lines. These projections are different in some respects from projections

in the NSW Long Term Transport Master Plan which did not list the Illawarra line as having significant

congestion by 2031.

4. Port Kembla: NSW Ports projects the Port has sufficient capacity for requirements over the next five

years, but will require significant investment over the longer term to meet forecast growth in demand

for container trade and bulk cargo exports. While capacity at the Port can be increased - through

planned construction of the outer harbour, 2 new container terminals and development of the coal

terminal - this growth would be limited by constraints on the existing rail network servicing the port.

NSW Ports has suggested that upgrades to the Unanderra−Moss Vale rail line or construction of the

Maldon−Dombarton freight rail link would improve the efficiency of both freight and passenger rail

connections in the Illawarra region.

5. Local Government Assets: Broadly, assets owned by local government present greater maintenance

challenges than those owned by state and territory governments (or their trading enterprises). Thus the

ongoing financial sustainability of local councils is an area that requires close and continued monitoring.

Note: NSW Government “Fit for the Future” initiative.

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3 Addressing key infrastructure challenges

We have chosen to focus on 6 of the 10 key challenges raised in the Audit – Productivity, Population,

Connectivity, Funding, Governance and Regional.

3.1 Connectivity – ensuring efficient infrastructure networks to link businesses and boost trade

The Audit rightly points out that modernised infrastructure networks and gateways are needed to link

businesses, boost trade and improve access to workplaces. This is particularly important in the Illawarra

region which sits on the periphery of Australia’s largest city and currently experiences higher than average

unemployment and lower than expected levels of economic growth. Poor connectivity is one of the key

factors preventing the region maximising its potential.

This issue is highlighted in the Audit which puts the cost of Sydney-Newcastle-Wollongong road congestion

as currently the highest in the country as outlined in Figure 1 below, and the second highest by 2031.

Figure 1: Cost of road congestion – 2011 and projected 2031 ($ million, 2011 prices)

In 2014 the Illawarra Business Chamber commissioned PricewaterhouseCoopers (PwC) to analyse the

Illawarra region’s connectivity. This study, ‘Linking the Illawarra’, is Appendix 3 to this submission. By

assessing the network coverage and service quality this study finds that the Illawarra has the lowest

transport connectivity, scoring 25 – 30% lower than the Australian benchmark regions (see Figure 2).

Figure 2 - Illawarra's Connectivity Compared to Benchmark Regions

Source: PwC 2014, Linking the Illawarra p.7

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The Illawarra has the lowest overall network coverage mostly due to poor rail freight connection (see

Figure 3). However, the Illawarra enjoys a similar level of road and (passenger) rail network coverage as the

other Australian benchmark regions, with all four regions having access to a freeway standard road corridor

and a passenger rail network which is accessible to the main urban population areas.

Figure 3 - The Illawarra Region's Connectivity

Source: PwC 2014, Linking the Illawarra p.6

Improving transport connectivity internally and externally to the region is not only important to helping the

economy diversify towards knowledge and service-based sectors, but is also one of the key tools for

addressing the low labour force participation rate and average household incomes experienced in the

Illawarra.

The Port of Port Kembla handles significant volumes of the State’s grain and coal exports and is the

gateway for all of the State’s motor vehicle imports.

Figure demonstrates Port Kembla’s role in the state’s freight movement.

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Figure 4 - NSW Freight Task

Source: Infrastructure NSW 2012, State Infrastructure Strategy, p. 72

The assessed overall level of connectivity between the Illawarra and Sydney is materially lower than that

experienced between the Australian benchmark regions and their respective CBDs. The inadequate

coverage of the freight rail network and the topographical constraints of the main road freight corridor

increase the cost of moving freight between the Illawarra and Sydney. Relatively high public transport

journey times, particularly for rail, impact negatively on the productivity of commuters who seek access to

the employment centres in Sydney.

The Audit highlights that passenger loadings on Sydney’s rail corridors are projected to increase over time,

reaching or exceeding crush capacity before 2031 on the Western, North Shore and Illawarra lines, and

inner parts of the Northern and Richmond lines. These projections are different in some respects from

projections in the NSW Long Term Transport Master Plan which did not list the Illawarra line as having

significant congestion by 2031. It is important from both a planning and governance perspective that there

is consistency in definitions between all levels of Government around issues such as crush capacity to

ensure that the same criteria is used in prioritising infrastructure projects.

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3.2 Productivity – increasing national productivity levels through strategic investment in infrastructure

As highlighted above Illawarra’s productivity levels would be dramatically increased through a program of

strategic investment in economic infrastructure, in particular infrastructure investments that improved the

region’s connectivity to and from Sydney.

A 2015 survey of members of the Illawarra Business Chamber (IBC) found that over 95% of businesses want

to see better transport links to Sydney. Inefficiencies in transport links drive up the costs of doing business

in the Illawarra and compromise future opportunities for market expansion. There are strong concerns that

without effective planning and action now to address this issue, the projected expansion in passenger and

freight movement over the next 20 years will see the transport and logistics costs for business increase and

productivity decline significantly.

‘Linking the Illawarra’ found that that improved connectivity across the Illawarra network to match the

level of its benchmark peers alone would reduce travel and freight costs by at least $150 million per

annum.

High quality transport connectivity is critical to the movement of people to work and hence to a productive

labour market. For the Illawarra, which is transitioning to a more knowledge intensive and service based

economy, this relationship between connectivity and efficient labour market functioning increases in

importance. It is clear that ensuring ongoing improvements in the Illawarra’s transport infrastructure is

critical to supporting the projected service sector and knowledge based growth of the regional economy.

Fifteen per cent of the Illawarra’s working population (20,850 people) commute outside of the region for

work purposes and a further 9,650 commute into the region for work. Improving the region’s poor

connectivity would significantly improve access to workplaces and increase workforce productivity.

There is a strong interdependence between road and rail infrastructure in improving productivity. One of

the key benefits of public transport is that the supply of public transport coverage is more cost effective

and hence, the productivity of commuting and leisure trips can be increased. This is particularly important

in the Illawarra which suffers from road congestion during the peak periods. However, the benefits of

having easy and quick access to the rail or bus network are eroded by long journey times or infrequent

services. This can deter passengers from using the ‘more productive’ public transport network and sustain

high car mode share.

Given the Illawarra is the third largest economy in NSW, with strong labour market links as both an

employment generator for surrounding regions and also supplying skilled workers for the Greater Sydney

area, the scale of potential productivity benefits from improving transport connectivity is significant.

Accessing jobs and trading opportunities in Sydney already costs Illawarra residents and businesses around

half a billion dollars a year. Without action, the time and out of pocket costs are expected to increase to at

least $690 million per annum by 2031.

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3.3 Population – how to ensure our infrastructure supports expected population growth

“Population growth will drive a significant rise in the demand for infrastructure services. On medium

level projections, Australia’s population is projected to grow from 22.3 million in 2011 to 30.5 million

in 2031 − an increase of 8.2 million or 36.5 per cent. Almost three-quarters of this growth (72.0 per

cent) is projected to be in the four largest capitals – Sydney, Melbourne, Brisbane and Perth. In total,

these four cities are projected to grow by 5.9 million people, or 46 per cent, to 18.6 million in 2031.

This growth will impose additional demands on urban infrastructure already subject to high levels of

demand.”(The Audit key findings 6 and 7)

Strategic infrastructure investments should be used to stimulate more aggressive population targets in the

regions on the periphery of the four major cities. This would ease the demands on these cities’ population

and infrastructure.

The 2014 Illawarra Draft Regional Growth & Infrastructure Plan (Draft Plan) and the Audit generally looks at

the infrastructure required to support relatively low Illawarra growth targets, rather than to stimulate

growth.

The Draft Plan provides for population growth that is equivalent to the past 10 years (0.8% per annum), and

much lower than the historical average (1.4% from 1971 to 2001); and lower than recent average for jobs

growth (1.1% per annum compared with 1.3% regional jobs growth and 1.4% labour force growth). An

‘aspirational’ but moderate population growth target of 1.4% per annum is warranted.9

Rather than basing population growth targets and infrastructure investments on past growth rates,

strategic infrastructure investments should be used to drive more ambitious population growth in the

regions surrounding Australia’s four largest cites to ease the infrastructure pressures on these cities.

The impact on the Illawarra population of poor connectivity is highlighted by comparing the key population

and economic indicators in the Illawarra with those exhibited by the benchmark regions. These indicators

are summarised below. The Illawarra region has the lowest participation rate and household income of all

the benchmark regions. Improved transport connectivity can bring more people closer to more jobs to

capitalise on the economic opportunities offered in the Illawarra and improve outcomes for the Illawarra

population.

9 Judith Stubbs and Associates (2015)

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Figure 5 - Population and economic Outcomes Compared to Benchmark Regions

Source: PwC 2014, Linking the Illawarra p.6 Another aspect to population growth and its impact on infrastructure is the type of infrastructure that will

be needed given an increasingly ageing population. As the Audit highlights “It is in Australia’s non-capital

cities where the ageing population is more pronounced. Regional cities and the hinterland that surrounds

them have a high number of older people. Cities such as Sunshine Coast, Wollongong, Geelong,

Launceston, Newcastle - Maitland, Bendigo and Gold Coast – Tweed Heads have the highest proportion of

their population over 65 years of age. (Infrastructure Australia 2015, State of Australian Cities, p6). More

locally, 17% of the Illawarra’s current population is aged over 65, compared to 15% for NSW’s current

population. In 20 years’ time this is projected to increase to 23% for the Illawarra and 20% for NSW

(Transition Illawarra, p22).

3.4 Funding – addressing resourcing issues through reforms

The Audit highlights that annual spending on Australia’s infrastructure has been higher in the last five years

than in the preceding 20 years, the rate of expenditure appears insufficient to maintain current levels of

service into the future, “The current level of public sector expenditure – especially in the transport sector,

which remains largely funded by government rather than user charges – may be unsustainable in the face

of increasing budget pressures to fund welfare and health services” (page 49). This is a particularly pressing

issue for regions, who face growing demands on their resources and will likely lose out to larger cities

unless processes are put in place to ensure an equitable distribution of resources, grounded in solid

economic and social analysis that is common across all levels of government.

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The Audit reasserts the fact that major reforms are needed to improve the way we finance and operate

infrastructure to ensure it can underpin gains in Australia's productivity and employment growth in the

decades ahead. It acknowledges that Government funding alone is unlikely to be sufficient to provide the

infrastructure that Australia requires, however, there is little narrative regarding how best to use the

private sector to bridge this gap. We must be sure that regions are not left behind urban centres in the

battle to attract the required private sector investment going forward.

The Audit rightly highlights that “informed discussion about prospective infrastructure funding challenges

facing the nation occurs far too rarely (and)….there is also a gap between expectations about infrastructure

quality and the willingness or ability to pay” (page 36). We agree with the Audit findings that there is a

need for serious public discussion about infrastructure service levels and funding and that all levels of

government need to work together to manage expectations about infrastructure delivery and provide clear

evidence-based cost-benefit analysis to support all infrastructure decisions.

The Audit highlights that “underinvestment in the maintenance of some parts of Australia’s infrastructure

networks, notably in regional Australia, could reduce the ability of those networks to provide reasonable

levels of service in the future. The most significant risks are in: (i) local roads, especially in regional and

remote areas, where there are large road networks to be maintained and local councils have limited or

declining income bases; (ii) regional rail infrastructure carrying low volumes of grain and/or general freight,

especially those with ageing timber bridges and timber sleepers; and (iii) regional town water services

provided by local councils” (page 9).

The Audit highlights that infrastructure maintenance and resilience are major themes highlighting that

regional and rural roads are less well maintained than urban roads. In addition, the Audit states that assets

owned by local government present greater maintenance challenges than those owned by state and

territory governments (or their trading enterprises). Thus the ongoing financial sustainability of local

councils is an area that requires close and continuous monitoring.

These issues are all of significant importance to regions like the Illawarra that rely heavily on the level and

quality of infrastructure to drive economic growth.

As highlighted by the Audit, “all jurisdictions need to direct attention towards improving whole-of-life asset

management processes, and to ensuring adequate long-term funding strategies are in place” (page 9). We

would recommend that the Plan being prepared by Infrastructure Australia highlight in more detail,

opportunities where such cross-jurisdictional discussion and cooperation can occur, to ensure adequate

resources are allocated to critical infrastructure. This issue also relates to governance as per section 3.5

below.

3.5 Governance – the need to improve integrated planning, project selection and stakeholder consultation

The Audit clearly highlights the fact that there is significant room for improvement in the way that

infrastructure policy and funding decisions occur:

“Particular weaknesses remain in project development and selection. In its 2014 report on public

infrastructure, the Productivity Commission observed, ‘there is an urgent need to comprehensively

overhaul processes for assessing and developing public infrastructure projects.…It is essential to

reform governance and institutional arrangements for public infrastructure to promote better

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decision making in project selection, funding, financing and the delivery of services from new and

existing infrastructure’.” (page 41)

Whilst all three tiers of government recognise the importance of infrastructure in relation to economic

growth and productivity, there is significant room for improvement in relation to the interactions between

these tiers of government in planning for, and funding, critical infrastructure and its ongoing maintenance.

RDA Illawarra, as with other coordinating bodies at a regional level, often find it difficult to facilitate

discussions on infrastructure due to the complicated lines of authority and decision-making regarding

infrastructure across the various levels of government. This is further complicated by poor communication

between organisations within the same tier of government. For example, RDA Illawarra coordinated a

regional submission to Infrastructure NSW in regards to our infrastructure priorities for Rebuilding NSW.

Following discussions with Transport NSW it was made clear that they had not received a copy of this

submission by Infrastructure NSW for example. Understanding the links between Infrastructure NSW and

Transport for NSW for example, as well as the relationship between Infrastructure NSW and Infrastructure

Australia, would be highly beneficial to organisations such as RDA Illawarra and IBC who coordinate a wide

range of stakeholders on infrastructure issues.

We would like to see all levels of government clearly articulate to coordinating organisations like RDA

Illawarra, as well as to the broader public, how best they can contribute to effective discussions regarding

infrastructure planning by knowing who the right people are to talk to. This is particularly pertinent in NSW

following the approval of the Poles and Wires initiative which will see $20 billion in infrastructure spending

across the state through the Rebuilding NSW plan.

As mentioned above, the Audit features infrastructure maintenance and resilience as major themes

highlighting that regional and rural roads are less well-maintained than urban roads and that the ongoing

financial sustainability of local councils is an area that requires close and continue monitoring. Programs

such as the NSW Government’s $1 billion ‘Fit for the Future’ initiative to support the development of strong

councils to provide the services and infrastructure that communities need is warranted.

Whilst the reasons for this are not examined in detail, it is interesting to note that in 2010 the Productivity

Commission rated the relationship between the NSW state Government and local governments at 42%, the

lowest of all states and territories.10 NSW Councils are responsible for more than $130 billion of

infrastructure and other community assets and it is imperative that there is a strong relationship not only

between local councils and NSW Government but also between these and the Federal Government.

There have been a series of documents provided to guide better infrastructure decision-making, such as

Infrastructure Australia’s own “Better Infrastructure Decision-Making: Guidelines for making submissions to

Infrastructure Australia’s infrastructure planning process, through Infrastructure Australia’s Reform and

Investment Framework” (December 2013). There is, however, often very little reference made to such

documents in regards to how infrastructure-related decisions are made by Government.

10 NSWBC Unfinished Business – Towards 2015 and beyond, 2014.

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3.6 Regional – understanding how infrastructure improvements can facilitate rural and regional growth

The Audit highlights the fact that significant investment in roads, rail and other infrastructure is needed to

avoid congestion in Australian cities over the next 15 years. Whilst population growth in the four largest

cities (Sydney, Melbourne, Brisbane and Perth) are expected to grow by 5.8 million by 2031, the areas

around these cities (Hunter, Illawarra, Gold Coast, Sunshine Coast and Geelong) are expected to grow by

500,000. As such, the role that regions like the Illawarra play in regards to accommodating growing

populations and taking the pressure off larger metropolitan cities needs to be given greater attention in

infrastructure planning decisions, alongside consideration of benefit cost ratios.

Being 80km south of Sydney, the Illawarra acts as a regional satellite for Sydney. The Illawarra region is

becoming increasingly integrated with the Sydney CBD and the Greater Sydney area:

We send freight to and receive it from the Greater Sydney area (and from mines and farms further

afield in western NSW), and especially the dense urban and industrial areas of western and south

western Sydney.

An average of 42,300 passenger and freight vehicles per day travel between the Illawarra and the

Sydney CBD and metropolitan area on the M1 Princes Motorway, the main road corridor between

the Illawarra and Sydney. 11 This makes this corridor one of Australia’s busiest inter-city road

corridors.12 In addition, another 3,000 people per day travel between the Illawarra and Sydney by

rail.

Among these travellers, about 20,850, or 15% of our workforce commute to Sydney and its

southern and western suburbs to go to work, and 10,000 people living in Sydney make the trip from

these areas to work in our region.13

Sydney is an important market for our University and a diverse range of professional and technical

service providers that are based in the Illawarra.

Sydney, and its domestic and international airports, are critical gateways enabling us to connect

with our colleagues and clients in other states in Australia and overseas; and

We are all part of families and friendship networks, and sporting and cultural interest networks that

are spread across these places and need to keep in touch with each other regularly.

A similar theme reverberates through the NSW State Infrastructure Strategy:

‘The Illawarra and the Hunter Regions are increasingly becoming integrated with the economy of the

Greater Sydney Region. Many residents commute by rail and many more make the journey by road

to work in Sydney every day. As Newcastle and Wollongong grow in size and importance to the NSW

economy, they need faster and more efficient links to Sydney’14

11 Roads and Maritime Services, Average Daily Traffic Volumes, V1.0, updated 25/3/2014,

http://www.rms.nsw.gov.au/publicationsstatisticsforms/trafficvolumes/map/, accessed 5 September, 2014 12

BITRE, Australian transport statistics Yearbook 2009 http://www.bitre.gov.au/publications/2009/stats_001.aspx 13

Illawarra Business Chamber, Linking the Illawarra, Improving the region’s transport connectivity, August 2014, page 8 14

Infrastructure NSW, State Infrastructure Strategy, 2012, page 69

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Whilst the Illawarra’s proximity to Sydney, Australia’s largest city, provides the region with significant

opportunities, attention must also be given to the role that well-connected regions, not just cities, play in

an increasingly international economy that favours well-connected regions both internally, and to the

broader international economy.

In the Audit, the Illawarra (Kiama, Shellharbour and Wollongong) is considered ‘Other Metropolitan’. Other

regions considered ‘Other metropolitan’ are: Central Coast (Gosford and Wyong) and lower Hunter

(Cessnock, Lake Macquarie, Maitland, Newcastle and Port Stephens). Whilst treatment as a city

satellite/other metropolitan can work in the region’s favour at times, it can also work against the region in

terms of obtaining adequate funding. A recent example was the Rebuilding NSW infrastructure program

where Wollongong, along with Newcastle, was grouped with Sydney (metro) and excluded from the

‘regional’ funding component. As a result infrastructure investment decisions were and are being made for

the regional capital separately from the region. Clearly substandard infrastructure investment decisions will

be made when the regional capital and region are considered in isolation. Furthermore, competing with

Australia’s largest city for infrastructure funds is not advantageous for the Illawarra. Hence consideration

of other aspects such a congestion alleviation should be included in the decision making process.

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4 Conclusion

The Audit highlights the fact that significant investment in roads, rail and other infrastructure is needed to

avoid congestion in Australian cities over the next 15 years. Whilst population growth in the four largest

cities (Sydney, Melbourne, Brisbane and Perth) are expected to grow by 5.8 million by 2031, the areas

around these cities (Hunter, Illawarra, Gold Coast, Sunshine Coast and Geelong) are expected to grow by

500,000. As such, the role that regions, like the Illawarra, play in regards to accommodating growing

populations and taking the pressure off larger metropolitan cities must be given greater attention in

infrastructure planning decisions.

The Illawarra’s proximity to Sydney, Australia’s largest city, provides the region with significant

opportunities, however, attention must also be given to the role that well-connected regions, not just

cities, play in an increasingly international economy that favours well-connected regions both internally,

and to the broader international economy.

Whilst not underestimating the importance of the need to ensure strong linkages between urban and

regional centres in terms of infrastructure planning, we must be careful not to treat regions simply as

satellites of major urban centres, but also centres of economic activity within themselves and therefore

deserving of consideration for infrastructure development in their own right. The strategic role regions play

in terms of underpinning urban economic development should be reflected in both government policy and

funding decisions in relation to infrastructure.

The Audit reasserts the fact that major reforms are needed to improve the way we finance and operate

infrastructure to ensure it can underpin gains in Australia's productivity and employment growth in the

decades ahead. It acknowledges that Government funding alone is unlikely to be sufficient to provide the

infrastructure that Australia requires, however, there is little narrative regarding how best to use the

private sector to bridge this gap. This area must be addressed to ensure future infrastructure investment

for Australia.

We believe that with a more ambitious commitment to well-planned, well-coordinated infrastructure

development across all levels of government, regions like the Illawarra will be able to better contribute to a

more productive Australia.

We would like to highlight a number of reports that provide extensive background on a range of

infrastructure issues in the Illawarra. These include:

Transition Illawarra Report 2013

Rebuilding NSW Submission 2014

IBC Transport Connectivity report 2014

Property Council’s submission to the Regional Growth and Infrastructure Plan 2014

IBC’s submission to the NSW Freight and Ports Strategy 2013

RDAI, IBC and Wollongong City Council’s submission to the Future Role of Regional Capitals Senate

Inquiry

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5 Bibliography

Advantage Wollongong, Wollongong Investor Prospectus, May 2014

Aecom, Grimshaw, KPMG, SKM, High Speed Rail Study, Phase 1, prepared for Department of Infrastructure

and Transport, July 2011

AusRAP, Australian Road Assessment Program, How Safe Are Our Roads? Rating Australia’s National

Network for Risk

Benchmarking the performance of Australia’s roads in the Decade of Action, 2011

BMT WBM, Wollongong Coastal Zone Management Plan, Management Study, final draft, prepared for

Wollongong City Council, January 2012

Christie, Ron, Long-term Strategic Plan for Rail: Overview Report: Greater Sydney Metropolitan Region,

prepared for NSW Government, June 2001

Hyder, Acil Tasman, Maldon Dombarton Rail Link Feasibility Study, Final Report, prepared for Department

of Infrastructure and Transport, September, 2011

Illawarra Business Chamber, Illawarra Transport Infrastructure Priorities, August, 2008

Illawarra Business Chamber, Linking the Illawarra, Improving the region’s transport connectivity, August

2014

Illawarra Business Chamber, Submission to NSW Draft Ports and Freight Strategy, March 2013

Plan Macro Australia, (Confidential Draft), Priority Project summaries, prepared for Regional Development

Australia – Illawarra, December 2011

Maunsell, Aecom Port Kembla Freight Accessibility Strategy Study, Final Report, prepared for Port Kembla

Port Corporation, 16th May, 2007

MWH+PB Engineering + Planning Services, West Dapto Water and Wastewater Detailed Planning, Waste

Water Systems Options Report (Executive Summary), prepared for Sydney Water, November, 2011

MWH+PB Engineering + Planning Services, West Dapto Water and Wastewater Detailed Planning, Water

Systems Options Report (Executive Summary), prepared for Sydney Water, November, 2011

NSW Department of Planning and Environment, Draft Regional Growth and Infrastructure Plan, 2014

NSW Department of Planning, SIC Estimates for State and Regional Road Projects, Illawarra, 2011

NSW Government, Rebuilding NSW, Discussion Paper, August 2014NSW Department of Planning, Illawarra

Regional Strategy, 2006 - 2031

NSW Government, NSW 2021, Regional Action Plan, Illawarra, Community Discussion Paper, 27 February,

2012

NSW Government, Illawarra Regional Transport Plan, March 2014

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NSW Government Bureau of Transport Statistics, Electronic Publication No. E2014-02-Rail-Journeys.

Railway Technical Society of Australasia, submission to Standing Committee on State Development of the

Legislative Council Inquiry into Port Infrastructure in New South Wales, 2004

Regional Development Australia – Illawarra, Infrastructure Priorities Survey, 2012

Regional Development Australia – Illawarra, Illawarra Transport Infrastructure Priorities Forum, Illawarra

Region’s Transport Infrastructure: vital links for Australia’s economic future; Submission to Infrastructure

Australia, prepared by Meyrick & Associates, October 2008

Regional Development Australia-Illawarra, Regional plan 2010 – 2015, updated 2011

Regional Development Australia-Illawarra, Submission to Feasibility Study, High Speed Rail Network, 2011

Roads and Maritime Services, Special Infrastructure Contributions Plan, 2011

Scott Morrison MP, Federal Member for Cook, covering letter of submission made to Infrastructure

Australia, 14 October, 2008

Sd&D Consult, South Eastern NSW Road Freight Supply Chain Study prepared for the Roads and Traffic

Authority of NSW, Final Report July 2010

Shellharbour City Council, 2011, Shellharbour Community Strategic Plan 2011-2021

Shellharbour City Council, Submission on the NSW Long Term Transport Master Plan Discussion Paper,

Transport for NSW, 26 April, 2012

Sinclair Merz Knight (SKM), Sydney-Wollongong Corridor Strategy, prepared for the Department of

Infrastructure and Regional planning, June 2007

Smart Infrastructure Facility, University of Wollongong, Submission to Transport for NSW, NSW Long Term

Transport Plan, 2012

Transport for NSW, NSW Long Term Transport Master Plan, 2013

Urban Development Institute of Australia, NSW, Illawarra Regional Strategy, Submission to the Department

of Planning, October, 2006

Wollongong City Council, Wollongong Economic Development Strategy 2013-23

Wollongong City Council Resolution extract from minutes, 24 March 2014

Wollongong City Council, Wollongong 2022.... Our Community Strategic Plan 2012-2022, Draft Summary for

Exhibition, 2012