Nicholas Moore, Macquarie Group’s chief executive, has urged federal and state governments to proceed with a major “infrastructure blitz” to help ease the nation’s rising cost of living and housing affordability crisis.
Moore told The Weekend Australian that governments had underinvested in infrastructure in the past, and that holding back on spending during the mining boom was the right move to prevent a damaging capacity crisis across the country. However, the greenlight on spending should be made now, with interest rates at record lows.
On the other hand, Moore warned governments that infrastructure investment had to be well-planned, and that the problem would not be fixed by flooding developments with cash.
“It depends on the project, but not all infrastructure is good and productive,” he said. “We need governments to be sure that they are choosing infrastructure projects with high returns. Not all infrastructure is the same, and we need to work out what has the best returns for the community.”
Moore said New South Wales’ $70bn investment program should be viewed as a model by other state governments.
Treasurer Scott Morrison’s second federal budget next Tuesday is expected to focus on infrastructure spending, after he indicated the federal government was keen to take on “good debt,” while interest rates were low, to help prepare the nation for the future.
Housing supply needs to increase
To combat the affordability crisis, the NSW government and other state governments need to implement policies that would boost supply in the housing market, Moore said.
“The cost of living and housing affordability are very important issues in Australia and it’s an issue which we can do something about as a broader community,” Moore told The Weekend Australian. “Infrastructure investment is a way to provide housing in an appropriate enough way.
Moore emphasised that people need to live close to their work. “We need railways and motorway development ... the challenge is that we get that infrastructure right and we’re encouraged by what we are seeing in NSW.”
He said it was a “positive sign” that new housing starts in New South Wales and Victoria were moving along and were more in line with demand for new property, especially with the pressures exerted by strong migration and population growth.
It has previously been estimated that NSW would need to construct 40,000 new houses annually to ensure there was sufficient supply on the market.
Related stories:
Property Prices Could Double In Badgerys Creek
New Sydney Metro Line Approved But Urban Renewal Lags Behind
