As Australia comes down from the peak of its mining boom, a new report warns the country has to invest in infrastructure to keep the economy going.
The report said infrastructure investment needs to be more than four per cent of GDP per a year, or $767 billion over 10 years.
The report comes as part of the Business Council of Australia’s Project Costs Task Force, the Courier Mail reported.
Around $159 billion worth of projects is in deliberation at the moment, which is 30 per cent down from a year ago and 43 per cent down from two years ago.
Investment under way dipped to $877 billion in the last 12 months, from peaks of $921 billion.
According to the report, red tape and workforce structures were resulting in expensive projects, along with distance and the previously high dollar.
“The most immediate challenge in continuing economic growth is how we manage the transition from the peak of the resources boom, and pulling out all stops to deliver on the investment pipeline is critical to this task,” BCA president Tony Shepherd said.
“The opportunity remains to lock in $159 billion worth of investment in projects that are classed as ‘under consideration’ and continue to work to make viable $250 billion of projects that are listed as ‘possible’.”
Director of Centre for Strategic Economic Studies at Victoria University Peter Sheehan recently wrote infrastructure has to fill the gap as the mining boom fades if Australia has to avoid a recession.
He said Australia has a number of impending infrastructure projects worth $700 million, which accounts for 40-50 per cent of GDP.
The BCA report suggested Infrastructure Australia should increase investment, the Australian Building and Construction Commission to be restored and wants more individual flexibility deals.