Public Infrastructure Financing – Submission to the Productivity Commission
The provision of infrastructure by government, financed by the issue of debt, is likely to be far superior to other options.
Where private interests are in a position to offer a similar service, it’s likely that their costs will be much higher and that society will pay a higher price either through taxation or user pays arrangements.
Part of the pressure for higher spending on infrastructure comes from the fairly rapid growth in the Australian population. In short, net infrastructure spending in Australia has been about 1 per cent of GDP which fails to keep up with population growth at around 2 per cent.