A comprehensive analysis of infrastructure linkages and multipliers for Australia

Publication Type:
Thesis
Issue Date:
2018
Full metadata record
In view of the widely-recognised importance of infrastructure in promoting socio-economic prosperity, and prompted by the shallowness of our current understanding of the inter-infrastructure, and infrastructure-economy, linkages and (hence) their policy-usefulness – this research develops a comprehensive analyses of such linkages in the Australian context. For this purpose, this research has developed an integrated framework comprising two complementary models, namely, an empiric-analytic model and an Infrastructure-embedded Input-Output Model (IeIOM). Further, this research has analysed linkages, over the period 1975-2015, for 39 major sectors of the Australian economy, including 19 infrastructure sectors. The consequences of National Energy Guarantee Scheme (a major initiative of the Australian government) on the evolution of linkages, to the year 2050, are also analysed. The analyses suggest that the evolutionary trajectory of infrastructure-economy linkages has indeed been shaped by a complex web of interlocked influences whose internal and external logic resides in the economic, socio-cultural and political domains of the nation. The IeIOM has provided quantitative substantiation for these findings, and has established their policy connects. Some of the key findings of this research are that: 1) key sectors of the economy, i.e., sectors with most extended forward and backward linkages are electricity generation, transmission and distribution; gas supply; iron and steel; non-metallic and mineral products; wood products; and agriculture; 2) major sectors in terms of significant forward linkages include a combination of economic (mineral mining, coal, basic-non-ferrous metals, machinery, transport, and construction) and social (households, education, health, etc.) infrastructure; 3) 22 sectors (most notably, gas supply, electricity generation from natural gas, petroleum products, paper manufacturing, food, electricity transmission and distribution, and coal) exhibit highly inelastic sectoral supply and value added responses, thus presenting high risks for downstream production sectors; 4) highly profitable petroleum producing sector does not significantly contribute to value-added, because of its heavy reliance on imported inputs; 5) trends towards increased exports of natural gas, as compared with its use for domestic purposes, is likely to be detrimental to the economic well-being of the nation; and 6) National Energy Guarantee Scheme is unlikely to extend the reach of linkages, thus limiting its usefulness in the broader economic context. These (and other) insights of this research, through their elucidation of key policy-tradeoffs, and – more importantly – through their questioning of preconceived notions about infrastructure-economy linkages, should constitute useful bases for infrastructure policy development – an issue of utmost contemporary significance – as nations around the world endeavour to devise policies for provisioning infrastructure of the future, in the backdrop of rapidly transforming global technological, economic and social landscapes.
Please use this identifier to cite or link to this item: