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Executive summary

Much has changed in the five years since we released Victoria’s first 30-year infrastructure strategy, including two significant events. Victoria endured the 2019–20 summer bushfires, which exacted heavy tolls on the people, communities, ecologies and infrastructure it affected. Victoria is also enduring and responding to the impacts of the COVID-19 pandemic. Both events showed the resilience of Victorians, and their ability to rapidly change their behaviour to support each other through challenges.

In the last five years, the Victorian Government committed to Victoria’s largest infrastructure program, significantly raising investment in infrastructure. It also announced many policy changes, including release of its revised metropolitan planning strategy, Plan Melbourne, outlining Melbourne’s planned growth trajectory to 2050, and setting a new target of net zero greenhouse gas emissions by 2050 in the Climate Change Act 2017. These crises and policy decisions show that infrastructure needs, and context, can evolve rapidly, and the value of regularly reviewing and updating infrastructure plans. This strategy deliberately revises many recommendations we have made previously and adds new recommendations considering Victoria’s changing circumstances. It retains a long-term view of Victoria’s infrastructure needs over the next 30 years, remembering that infrastructure lasts decades, and must meet immediate and future needs. Infrastructure is more than roads, bridges, hospitals, and schools. It underpins Victoria’s economic productivity, social equity and connectedness, and ecological impact. It can help reduce social disadvantage. This strategy focuses on Victoria’s future. We take existing Victorian Government projects, decisions and commitments as our starting point, and make recommendations about future decisions to be made. We also make decisions about how to maximise the benefits of existing commitments.

This strategy has 94 recommendations spanning many types of infrastructure policies, reforms and projects, and is based on extensive evidence, research and consultation.

We have grouped them thematically, assembling recommendations that work together to achieve a more prosperous, inclusive, and sustainable Victoria.

For each recommendation, we have produced a strategic estimate of its potential cost range, stipulated the recommended timing for delivery, and considered funding options for major policies, reforms and projects (see Appendix C of Volume 2). We have not prioritised some recommendations over others, and instead sought to present an integrated, interlinked, and interconnected set of recommendations to help achieve the strategy objectives. Different stakeholders can identify their own priorities, and addressing each theme requires different priority actions. We have also prepared regional summaries of the strategy, allowing each region to identify recommendations of special interest. Combined, the recommendations have a total capital cost of approximately $100 billion over 30 years. This is our best, central estimate of the capital cost of delivering this strategy, which was a consideration in developing it. This estimate does not include other ‘business as usual’ Victorian Government capital expenditure for purposes unrelated to the recommendations in this strategy.

Of the 94 strategy recommendations, 53 are for policy changes and reforms that help better use and manage demand on infrastructure. The remaining 41 recommendations involve Victorian Government infrastructure capital investment. The Victorian Government is ultimately responsible for prioritising infrastructure spending according to Victoria’s prevailing financial position and broader fiscal policy settings.

This strategy has 94 recommendations spanning many types of infrastructure policies, reforms and projects, and based on extensive evidence, research and consultation.
Confront long-term challenges

Victoria’s recent experiences underline that future events are uncertain. Long-term strategy must be adaptable and resilient, able to adeptly change and recalibrate in different circumstances, while confronting long-term challenges. A changing climate means infrastructure must be resilient to new climatic conditions, and a 2050 net zero emissions target refocuses Victoria’s infrastructure needs to support transitioning away from traditional fuel sources. New, emerging technologies can radically alter infrastructure demand and give governments new tools to manage it. Global health, economic and geopolitical shocks will affect Victoria and it must keep options to respond. For instance, international trade bans on recyclable materials have disrupted Victoria’s recycling and resource recovery industries, creating an opportunity to build a more circular economy.

Manage urban change

A decade of rapid population growth to 2020 has strained Victoria’s infrastructure, creating congestion and shortfalls. The COVID-19 pandemic has paused population growth, providing an opportunity to ensure systems and policies are in place to better manage future population growth. This includes better integrating Victoria’s land use and infrastructure planning to guide urban development in the most appropriate locations, providing the right infrastructure at the right time. Suitable and well-located areas in established parts of Melbourne and regional cities can accommodate more new homes, helping maximise use of existing infrastructure and services. Reforms can help manage transport demand to make better use of existing and new transport infrastructure by using pricing to help people make more informed choices about when and how they travel. Victoria can better maintain and adapt its existing economic, social and community infrastructure to lengthen its lifespan and keep it fit for contemporary conditions.

Harness infrastructure for productivity and growth 

Managing demand and achieving maximum efficiency from existing infrastructure can improve the productivity and effectiveness of the infrastructure Victoria already has. But it will not meet all infrastructure needs for a productive and equitable state, especially as population growth returns. Victoria will require some new major transport projects, and new social and environmental infrastructure to support rapidly growing communities and reduce disadvantage. Particularly when managing fiscal constraints, governments must carefully select infrastructure projects to deliver maximum benefits to the community, considering all options, and ensuring they perform under different future scenarios. Selecting the right infrastructure at the right time can support the productivity of Victoria’s economy, prepare for future needs, and ensure people can access the infrastructure and services they need for their social and economic wellbeing. The Victorian Government should conduct detailed feasibility studies and business cases before announcing new projects, to ensure their investments serve Victoria best.

Develop regional Victoria

Developing Victoria’s regions is more than simply generating construction activity. Regional development encompasses economic and community development. Infrastructure can support a region’s competitive strengths, help adapt to economic change, and address socioeconomic disadvantage for some of Victoria’s most vulnerable communities. Building connectivity, especially between businesses and markets, can help Victoria’s regions develop. Infrastructure can also help strengthen wellbeing in regional Victoria by connecting people to essential services and resources at major life stages.

Insights

Victoria’s infrastructure is only one facet of the state’s economic performance, social outcomes and ecological sustainability, and cannot solve every problem alone. But combined with good governance, innovative and competitive businesses, strong public and social services, and a thriving community, infrastructure can help create a prosperous, inclusive and sustainable long-term future.

Considering multiple future scenarios

We are publishing this strategy in a period of significant uncertainty. The COVID-19 pandemic added further complexity to other trends affecting infrastructure, including technological disruption, climate change and the ageing and growth of Victoria’s increasingly diverse population.

Infrastructure Victoria modelled different future scenarios to build the evidence base underpinning this strategy. Infrastructure projects are an investment for the long term, but the long-term outlook can vary markedly. Structural changes, including those induced by the COVID-19 pandemic, can significantly change people’s preferences, including for travel choices and behaviour. For this strategy we modelled scenarios considering a longer-term trend of greater working from home, the effects of automated and electric vehicles, and faster or slower population growth, as part of our Major transport program strategic assessment report. The strategy also drew upon scenarios in our previous studies, including Good move: fixing transport congestion, and Advice on automated and zero emissions vehicles infrastructure.

Our working from home scenario found reduced demand on the transport network, helping reduce congestion, but also raised the possibility that this change in people’s behaviour could result in more people living in rural areas and Melbourne’s outer suburbs and new growth areas. At the same time, it could reinforce the dominance of the central city, as more jobs could be created in the centre of Melbourne.

Our automated and electric vehicle scenario similarly showed more people may move to Melbourne’s outer suburbs and growth areas. But in contrast to working from home, it worsened road congestion in the medium term but improved congestion in the long term, and reduced the share of trips taken on public transport, as cars became cheaper to run and more attractive to use. It also has implications for energy use, placing extra demand on the energy infrastructure in these places.

We have also considered the impacts of government-led initiatives such as transport network pricing and upgraded road management systems. These initiatives can have a significant impact on transport system demand, capacity, and subsequently the need for new transport infrastructure.

Our different population scenarios show that the timing of infrastructure needs, such as when roads or public transport become unacceptably congested, partly depends on the rate of population growth. However, slower population growth does not solve congestion problems, it simply delays them for a few years. The spatial distribution of population growth is also something we have considered, drawing on our Density done well work.

Combined, these different scenarios show that while Victoria’s future trajectory is not certain, some underlying trends persist. Underlying population growth is forecast to resume and drive the need for future action. The scenarios underline that actions to ease congestion and manage travel demand remain beneficial in different futures. Our recommendations, including changes to transport pricing, can be used to help address any adverse impacts.

In early 2021, we published a research report, Transporting Melbourne’s recovery, which explored the short-term impacts of the COVID-19 pandemic. It found that increased vehicle traffic in inner Melbourne could reduce average vehicle speeds by 20% to 30%, compared with pre-COVID levels. With easing of restrictions and a transition into the recovery phase, these projections were confirmed by reality. By March 2021, traffic on Punt Road was recording travel times longer than those recorded pre-pandemic,1 as did traffic levels in some places in the central city.2 We made recommendations that could be implemented quickly at relatively low cost to contribute to recovery from the COVID-19 pandemic. For instance, flexible work practices, such as earlier or later start and finish times, could help shift demand across the transport system, helping to support safer, more confident public transport travel. Cycling and walking infrastructure investment can also be a cost effective way to encourage commuters to choose active transport, while also providing health and environmental benefits. Many of these measures are also opportunities to better use existing infrastructure and would remain valuable long after the pandemic passes. Infrastructure Victoria continues to undertake modelling and research on the potential medium and long-term effects of the COVID-19 pandemic.

An innovative way to assess major transport projects

We wanted to make sure that this strategy reflected changes since the release of our 2016 strategy. For our recommendations to match future policy and infrastructure needs, we commissioned modelling to consider the growth patterns of recent years, and the Victorian Government’s commitments to modernising and expanding the transport network with new and refurbished infrastructure projects.

Our modelling makes use of new and innovative modelling techniques for the first time, allowing us to examine the effects of transport infrastructure on land use. A drawback of traditional transport modelling is that it assumes transport infrastructure causes no changes in the distribution of population and employment. This means it cannot incorporate the effects of land use change in response to new infrastructure construction. The brand new, innovative Victorian Land Use and Transport Integration (VLUTI) model, developed by Victoria University in partnership with Infrastructure Victoria, provides a new tool to examine the land use effects of infrastructure investments. This innovative VLUTI model allows for land use and transport infrastructure to directly influence each other, causing changes in the location of people and jobs. This means we can gain insights into how infrastructure investments might shift the location of population or employment growth. This new modelling technique starts to allow us to develop more accurate estimates of the land use benefits of transport infrastructure investments Approaches to assessing infrastructure programs have evolved over time. We commissioned modelling and economic evaluation of some of the major transport recommendations in this strategy. Our assessment framework considers many elements, with the assessment outcomes reflecting a progressive approach to major transport program assessment. We applied a multi criteria analysis, an expanded economic evaluation that considers land use changes, a broader social, environmental and economic assessment, and consideration of distributional impacts. Our Major transport program strategic assessment report is available on our website. It includes detailed modelling and analysis of:

  • Improving road network management systems
  • Constructing an outer metropolitan ring road and rail corridor
  • Reconfiguring the City Loop and northern rail corridor upgrade
  • Upgrades to the western rail corridor
  • Constructing Melbourne Metro Two and direct Geelong rail services
  • Building a new cross-city motorway. 

Using our assessment framework, modelling and sensitivity testing, we identified the conditions required for a transport program, and the complementary measures that support its benefits and mitigate against any unwanted outcomes. Our modelling showed the potential for some programs and scenarios to accelerate outward city growth, which can have environmental, ecological, economic and social impacts. Our modelling also showed induced demand could erode the future benefits of some new infrastructure programs. Integrated transport and land use planning, and transport network pricing, can help to identify and mitigate these risks and unlock greater benefits for Victorians.

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