Historically, the public sector has been the main provider of infrastructure in Australia. With Australia’s federal system of government, the Commonwealth Government has responsibility for certain infrastructure services, including: postal and telecommunications; and air transport services. The State Governments are responsible for the bulk of remaining infrastructure services, including: ports; rail; roads; gas; electricity; and water. Local government has varying degrees of responsibility for infrastructure across the states, but plays a significant role in the provision of urban and rural infrastructure in the form of water supply, sanitation and local road networks. Infrastructure can be divided into two forms. Economic infrastructure comprises: roads; railways; airports; water and waste water services; telecommunications; and power generation facilities. Social infrastructure comprises: schools; health facilities; recreation facilities; housing; and law and order facilities.

The link between infrastructure provision and economic growth / productivity is keenly debated. However, there is considerable agreement that certain parts of the State’s economic infrastructure are in need of urgent repair and upgrade. A review of the State’s infrastructure by Engineers Australia gave a ‘poor’ rating to both rail and stormwater, meaning that critical changes are required for them to be fit for their current and anticipated purposes. The highest rating given was ‘good’ for electricity infrastructure.

The major methods of funding infrastructure include: government debt; taxes; user charges; producer levies; and special purpose vehicles such as privately funded projects. The Allen Consulting Group reviewed the best method of funding infrastructure, as measured against criteria of: effectiveness; efficiency; equity; stability/reliability; administration costs; compliance costs; transparency and certainty; and stakeholder support. It found that there is no ‘silver bullet’ solution, and that every approach has disadvantages as well as advantages.

The State Infrastructure Strategic Plan contains the Government’s priorities for major infrastructure projects over the next ten years and aims to bring a systematic approach to infrastructure planning. In 2001 the State Government released its policy on the private financing of infrastructure projects. The policy provides for the financing of both economic and social infrastructure. The essential rationale for the use of privately financed infrastructure projects is improved value for money for the Government. Some reject this view, and the union movement has called for infrastructure to be financed through the issue of government infrastructure bonds.