The Government’s budget decision to create a $20 billion infrastructure fund is looking prescient following the release of a new report claiming bottlenecks have cost the economy billions.
The research, carried out by independent think-tank Access Economics for the Minerals Council of Australia, argues inadequate port, rail and road infrastructure has cost Australia $17 billion in lost earnings over the past five years.
Given that demand for Australia’s resources is only set to grow in the years to come, urgent action to ease infrastructure bottlenecks is required in order to avoid losing further billions, the report says.
Looking to capital investment on a smaller scale, Australian Bureau of Statistics figures released today show business spending on capital fell by 2.5% seasonally adjusted in the March 2008 quarter.
The result surprised market analysts, which expected a 3% rise, and more than likely reflects increasing business concerns about the economic outlook and increasing market volatility.
On the markets today, at 12.15pm the S&P/ASX200 is up 0.8% on yesterday’s close to 5695.7, while the Australian dollar has lifted strongly overnight to be trading at US96.12c.