Road industry contributes $207B to Australian economy

Australia’s road industry contributes nearly $207 billion of value to the economy each year and supports almost 1.3 million jobs, according to new analysis from Roads Australia (RA).

The analysis draws from a research paper prepared by BIS Oxford Economics and commissioned by RA, that puts a dollar value on the benefits – both economic and social – derived from roads in the context of Australia’s integrated transport system.

RA CEO Michael Kilgariff said at more than 877,000 kilometres in length, Australia’s national road network is one of the longest in the world.

“As a community, we take our roads for granted. In fact, we tend to blame them for a lot of the problems associated with urban growth,” Mr. Kilgariff said.

“The reality is roads not only play a key role in supporting the public transport task – providing shared infrastructure solutions for bus, tram and light rail modes – but they provide the critical ‘first and last mile’ connections for the movement of people, goods and services across Australia.”

Mr. Kilgariff said for every $25 generated in the Australian economy, $1 dollar comes from the roads industry.

“And when the broader freight logistics industry was factored in, that figure doubled,” Mr. Kilgariff said.

The BIS Oxford Economics paper indicates these benefits will continue to flow over the next decade, pointing to a road infrastructure pipeline worth $22.7 billion over the years to 2022/23 and $25.4 billion over the following five years.

“This roads boom will provide much needed stimulus to an economy currently beset by low business investment and sluggish consumer spending,” the report reads.

According to the report, the roads network is an integral part of Australia’s multi-modal transport network.

The report highlights economic and social values including flexibility, which facilitates marginal journeys and connects populations to rail, sea, air and inland port facilities and markets.

“Roads also have a so-called “option value”, since they provide people with the option to reside away from a major population hub with a rail network and to travel when the rail network is not operating,” the report reads.

Mr. Kilgariff said the ‘road vs rail’ debate of past decades was no longer relevant in 2019, given Australia’s projected population growth.

“The reality is we need both, working together as one, integrated transport infrastructure solution,” he said.

“In fact, RA argues there is an urgent need to significantly increase our spending on mass transit systems to do the heavy lifting in our major cities – not at the expense of current road funding, but in addition to.”

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