2.4 Adapt infrastructure for modern needs
Creating better communities does not always mean building new infrastructure. Even under projections for a growing population, Victoria already has most of the infrastructure it will need by 2051. Looking after and using existing infrastructure better can be much cheaper than building new infrastructure, especially in established areas where construction might be particularly complicated and expensive. Well-maintained assets can remain sustainable and effective as they age, as demand grows and as technology continues to improve.
Infrastructure investment is at record highs in Victoria. The Victorian Government plans to spend an average of $22.5 billion a year on infrastructure over the 2021–22 budget forward estimates1 and local governments collectively budgeted $19.8 billion for capital works in the 2020–21 financial year.2
All governments have made significant new commitments to infrastructure spending, including to mitigate the economic effects of the COVID-19 pandemic. Yet this is only a fraction of the value of public assets.
In 2018, the Victorian Government managed non-financial assets valued at $265 billion,3 not including $14.2 billion of physical assets held by public hospital services.4 VicTrack and VicRoads alone managed more than $92 billion in transport assets.5 Councils manage over $100 billion of assets including local roads, street and local drainage services, and community, sports and recreation facilities.6 When it is well managed and maintained, infrastructure should last a long time. This means many current facilities, including major hospitals, much of the transport network, and public buildings used to deliver services, will still provide vital services to future generations. When infrastructure is not well managed and maintained it becomes less efficient and effective, and Victorians may experience reduced service quality. Waiting times to access non-urgent health care could increase due to bed unavailability, or transport services could be interrupted from worn train tracks. For some of Victoria’s most vulnerable public housing residents, ageing facilities can mean an extremely hot home in summer and a cold home in winter, impacting their health and wellbeing.
Building new infrastructure is not always required to meet the challenges of a growing and changing population. Victoria already has most of the infrastructure it will need to support its population to 2051.
Managing assets well is cheaper than new infrastructure
Ensuring public assets are fit for purpose, efficient, effective and adaptable helps meet growing demand pressures as technologies, demand and service delivery models evolve. Proactive and evidence-based management practices support asset maintenance, upgrades, and the eventual replacement, consolidation or disposal of assets when they are no longer suitable.
Sound asset management requires effective planning, acquisition, operation and disposal of assets to meet current and likely future service delivery demands.7 The asset management lifecycle involves initial assessment of investment proposals, ongoing maintenance and renewal, and asset replacement or disposal decisions, as shown in Figure 15.8 Good asset management can optimise the use and lifespan of existing infrastructure, minimise or defer the need for new assets, reduce disruptions, and allow for rapid responses to changing demand or other circumstances.9 In contrast, inadequate attention to maintenance can accelerate the need for major repairs, shorten the operational life of facilities, and create worse outcomes for users.10 Despite major new infrastructure investments, the management of existing public sector assets is often neglected.11 Victorian Government assets are managed under the Asset Management Accountability Framework, overseen by the Department of Treasury and Finance.12 It requires accountability for asset management, and many agencies have improved their approaches since its introduction.13
However, agencies inconsistently interpret their responsibilities and often focus on building or buying new assets, rather than managing existing assets strategically to maximise value.14
Inadequate and reactive asset management can incur higher maintenance costs, reduce financial sustainability and cause premature deterioration. In some sectors, buildings and fixtures are becoming more difficult to maintain in an acceptable condition as they grow old or are heavily used, and less able to support effective, safe and efficient services.15
Outdated buildings can be inaccessible, energy inefficient, unable to integrate modern technology, or unsafe. In rural areas, some councils struggle to maintain many ageing assets that no longer meet community needs (see recommendation 89). A reluctance to dispose of facilities that no longer meet needs, particularly in the face of community opposition, can prevent the rationalisation or consolidation of facilities, even when it could enable a higher quality of service delivery.16
Victorian Government agencies often have limited or inaccurate data on the condition of their assets.17 Agencies need good asset condition data to make strategic decisions about maintenance and infrastructure spending. Better data can help them get the best value from investments, make good decisions about when to acquire, renew or divest assets, be responsive to changes in demand or use, and provide better services.18
Figure 15: The asset management lifecycle. This figure shows the phases of the asset management lifecycle, from planning and acquisition to operation and maintenance, and renewal and disposal.
A more strategic and transparent approach to asset management is likely to involve a greater commitment to timely maintenance, asset renewal and retirement. It would make facilities and the services they provide more reliable, reduce interruptions, promote more integrated infrastructure planning and generate greater efficiency
Ongoing monitoring of demand, innovations and asset condition helps infrastructure planning across the lifecycle and aligns upgrades, rebuilds, consolidations and divestments with needs. It also means building new infrastructure only when it is necessary.
Today’s infrastructure will need to meet evolving needs
Even well-maintained, upgraded and renewed infrastructure will need to adapt and evolve. The pace of change in technology and service innovation is rapid, and inflexible assets risk premature redundancy. Building facilities to be as flexible as possible would support simpler, less expensive and faster upgrades when required, which can be many times during the decades that most assets are in place.19 Planning for upgrades, rebuilds and new infrastructure should consider the ease of future asset maintenance, upgrades, expansion and possible repurposing if required. Some projects can be planned to allow for future expansion, including through design or site choices that preserve options.
Public buildings and infrastructure need to adapt to match the changing needs of Victorians. Many public buildings do not provide suitable access for those with impaired mobility.
The need for dignified access to, and use of, commercial and public buildings will only become more pressing as Victoria’s population continues to age. Evolving building standards and the impacts of climate change mean ageing properties may need upgrades to keep people safe, comfortable and healthy.
As a service provider, major landowner, employer and tenant, the Victorian Government is uniquely placed to drive positive, long-term change.
Recommendations for better managed and more modern infrastructure
Infrastructure Victoria makes the following recommendations to adapt infrastructure for modern needs. These would be most effective if complemented by improvements to planning and funding that support: resilient infrastructure networks and assets (see section 1.3); public transport accessibility (recommendation 44); the maintenance of regional roads and rail freight networks (recommendations 78 and 79); cooperation with regional councils on community infrastructure (recommendation 89); and making social housing suitable for changing climates (recommendation 95).