The Implications of Insufficient Funding from Governments into Transportation Infrastructure

Published: 2021-09-11 13:10:06
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Research paper on current freight transportation challenge The implications of insufficient funding from governments into transportation infrastructure AbstractIn this essay, it will discuss how current freight transportation challenges are presented due to the implication of insufficient funding from governments into transportation infrastructure.  Problems such as constructing new infrastructures, maintaining existing infrastructures and shut down of supply chain are raised due to the shift of focus of the government into other urgent sectors and inadequate national capital.  Privatisation and deregulation are hence introduced to ease and solve the current transportation infrastructure problems.  Background The freight and logistic industry is an essential section of the national economy. By 2016, freight and logistic field made up approximately 10 per cent of Australia’s GDP (BITRE).  It is distinct that the government plays an important role in terms of maintaining and improving freight transportation infrastructure in this field.  However, in recent years, despite the importance of freight infrastructure, it is shown the government has reduced funding towards the freight and logistic industry.  Imperfections in national transport infrastructure in terms of increasing traffic congestions, antiqued transport network, inadequate airport facilities, as well as general shipping delays and restrictions are becoming more apparent.  In the long term, these defects may potentially reduce productivity and substantially affect Australia’s national reputation and living standards.   The implication of insufficient funding from governments into transportation infrastructure is resulted from a shift of government focus.  The government now targeted towards other industry fields, such as education and health (ARA, 2014).  Resources are allocated to these sectors as the issues raised in these areas are more critical and urgent.  Since it is a trade-off between other industries and freight infrastructure, freight industry conclusively receives less funding from governments.  Insufficient funding is also an outcome of inadequate national capital.  While import markets remain the same, export markets in Australia declined significantly since all industries collectively moving out due to high operating costs (Thirlwell, 2015).  Investors tend to move to countries with cheaper operating cost, such as China.  With low amount of exports but high amount of imports, Australia’s money flow is imbalance.  There is more expenditure and less income.  The break of money chain caused less government funding devoted to freight infrastructure.  Today, transportation infrastructure is deteriorating and the number of infrastructure backlogs is increasing.  Challenges derived from insufficient funding from government have become more apparent.  New InfrastructuresDue to insufficient funding from government into transportation infrastructure, Australia is incapable to build more new freight transport infrastructures to cope with the increasing pressure on freight and port facilities.  According to a report from Australian government, the growth of GDP and domestic population has resulted in domestic freight task doubled in size over the past 20 years (Figure 1), reaching on average 3.5 per cent per annum.  It is projected this trend will continue to grow with total domestic freight to grow 80 per cent over the next two decades (Mitchell and McAuley, 2009).  Between the year 2000 to 2012, the total freight volume has increased around 57% (Table 1) (Mitchell, 2014).  This suggested the rapid growth in usage of freight transport infrastructure.  An example of infrastructure usage exhaustion is maritime activity.  It is predicted in 2030, the bulk freight task will increase by half and national container to be double (Figure 1) (Mitchell and McAuley, 2009).  With increasing demand of port usage but no new infrastructure to accommodate the demand, it reduces productivity.  Hence, with lack of new infrastructure, not only it failed to ease the thriving pressure on transportation facilities, it inversely burdened the usage of these infrastructure, causing it closer to saturation.  In the long run, shipping delays and restrictions will become more noticeable.  Traders are more likely to abandon less desirable goods due to traffic congestions and this may eventually set back productivity and ultimately affects Australia’s economy.  

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