Using figures from the government’s intergenerational report, Mr Thorpe and his colleagues have calculated Australia will need 6.9 million more homes to cope with a population of 36 million by 2050. This represents 82 per cent of our existing housing stock.
Should Australians continue to rely on the car, the country will need 173,348 kilometres of new roads – a 51 per cent rise equivalent to the entire road network of Thailand.
We would need 3254 new schools, 1370 new supermarkets and 1370 cinema screens.
In dollar terms, the amount spent by both government and the private sector on infrastructure would need to increase by approximately $2.5 billion every year until 2050.
The PWC economists say that while the government talks about increasing productivity, it makes no mention of the crucial role the national pool of savings plays in funding infrastructure.
”The banks rely quite heavily on the savings of individual people to provide capital for investment in infrastructure. Because as a nation our savings are currently quite low, there is a real risk that there will be a significant shortage of credit.”
As a result, both the private sector and government have come to rely heavily on foreign capital. But the global credit crunch has dramatically lifted the costs of overseas borrowing, requiring government and companies to take on extra debt.
The ageing population exacerbates this situation as older people contribute less to the savings pool, and tend to draw more from government coffers in the form of social security and healthcare.
But a spokesman for the Treasurer, Wayne Swan, dismissed the analysis.
”Australia’s reputation as one of the most attractive investment destinations in the world allows it to access large savings pools of foreign investors … to fund high levels of investment in our own economy,” he said.
”We are able to be a net importer of capital because foreign investors are confident we use their capital so well.”