Impact of next generation infrastructure on Australian cities

The quality of the physical infrastructure in our major cities is just as critical as human capital development in terms of driving long-run growth in productivity and rising living standards. The provision of high-quality and reliable infrastructure network services (like roads, rail and telecommunications) can have significant social, environmental and economic payoffs. Notwithstanding the obvious intuitive connection between infrastructure investment and economic growth, the link between the two is still debated. One reason is that not all infrastructure investment supports growth over the long-term. Building a road or rail line that is not used for instance lowers productivity and economic growth in the long-term. A second reason is that establishing an empirical relationship between infrastructure and economic growth is confounded by a number of statistical issues. The most important of these relates to identifying the direction of causality between infrastructure and measures of aggregate output (GDP). This study takes a microeconomic (or case study) approach to understanding the impact of next generation infrastructure (NGI) on the effectiveness of our cities in supporting economic growth and higher living standards. We first look at the theoretical links between infrastructure investment, productive cities and economic growth. We then focus on a hotly debated infrastructure project - the South West Illawarra Rail Link, which could potentially better link the Wollongong region to Sydney