Some Covid changes are here to stay, Infrastructure Australia says as it ponders 2021 priorities | Australian economy

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Covid-19 drove Australians out to the regions, on to the internet and into second-hand cars, according to Infrastructure Australia.

In a report about the effect of the pandemic on infrastructure needs, released on Wednesday, the peak body finds that only some of these trends are likely to be permanent as Australia enjoys a reopening of economic and social life.

Higher vacancy rates in commercial real estate in the inner city, increased demand for home offices and improved telecommunications are tipped to stay, as many Australians want to continue working from home.

The report found due to the pandemic Australians moved to the regions, with a 200% increase in net migration from the capital cities, but also enjoyed green spaces in their local communities, with a 23% increase in use of parks.

Infrastructure Australia found that rents had dropped in inner-city Melbourne and Sydney by more than 10%, echoing a study by the National Housing Finance and Investment Corporation.

But the trend to move to regional centres to escape the coronavirus and restrictions may yet reverse, as people return to cities to attend work in person at least a few days a week.

Infrastructure Australia’s chief of policy and research, Peter Colacino, said that trend could mean workers give up locales such as Byron Bay for urban centres like Newcastle or the Central Coast with a “manageable multi-day commute” to Sydney’s city centre.

The report found that digitisation was the biggest trend, with online retail growth each month of five to six times the total annual growth for 2019, and telehealth now up to a one-third of Medicare consults.

Use of public transport fell to 10% to 30% of average usage at the start of the pandemic, before settling at a new normal of 60% to 70%.

Infrastructure Australia found that due to its low case numbers of Covid-19, Australia has a “head-start on the return to [the] new normal”, as industries reopen and eventually international students return.

The report found private motor vehicle use was the first transport mode to rebound to pre-Covid levels, with “more people driving to work and a significant number of households purchasing a secondhand car”.

While some commuters are returning to the office, an “outflow of tenants … and reduced tourism could lead to a sluggish rebound for Australia’s CBDs, particularly in relation to commercial and retail property”, it said. “Efforts to re-purpose real estate and revitalise CBDs may be required.”

The report used survey evidence and expert evidence from behavioural psychologists, concluding that the “personal transition costs” of decisions will result in some new behaviour “sticking”.

Examples included shoppers continuing to make purchases online after retail shops close, businesses that downsize their city office space facilitating working from home, and households that bought an additional car or bike continuing to use them in favour of public transport.

The report will be used to update Infrastructure Australia’s priority list in 2021. The 2020 list nominated environmental challenges including rising sea levels, water security and waste management as top priorities.

The chief executive of Infrastructure Australia, Romilly Madew, said Covid-19 had shown the “digital divide” in Australia, with many rural communities lacking proper telco access and hardware to shift education online.

Colacino said the pandemic had changed patterns surrounding when and where people needed to access the internet, and increased demand not just for download speeds, such as people watching Netflix, but upload speeds for video conferencing.

Madew said because infrastructure is a long-term asset, governments won’t want to make “a rapid and bold change” to respond to the pandemic if patterns return to normal after 18 months.

The agency is conducting modelling on Australia’s future public transport demand but much will depend on actions of government. Madew cited the example of whether governments that introduced interim cycling pathways would leave them in place.

Colacino said the “real driver” of Australia’s infrastructure needs was population growth.

A projected three-year pause in net overseas migration after borders closed in March would give Australia “breathing room” to continue building infrastructure, he said.

But at this stage Infrastructure Australia’s thinking about the need and priority for infrastructure improvements has “absolutely not” changed as a result of Covid-19.

Hafta Ichi
Source: The Guardian
Keyword: Some Covid changes are here to stay, Infrastructure Australia says as it ponders 2021 priorities | Australian economy

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