OP ED by IPWEA Chief Executive Officer, David Jenkins
Back in 1984, we spotted the cracks in local government infrastructure. Instead of fixing them, we simply looked the other way.
Between 1984 and 1987, what became known as the South Australian Crisis delivered a blunt warning. Dr Penny Burns and a series of parliamentary reports concluded that, unless urgent action was taken, the state’s entire capital budget would soon be consumed by
infrastructure renewals.
No dreams of growth. No plans for expansion. Just the costly business of keeping what we already had from falling apart.
That moment sparked the birth of asset management as a formal discipline in Australia. Yet, nearly forty years on, we are still orbiting the same stubborn problem.
Today, the story is all about a funding crisis in local government. Over half of NSW councils ran deficits in 2022. Regional councils sound alarms about insolvency. Merged councils buckle under pressure. But this isn’t primarily about money. It’s about how the system is designed.
Local government holds the keys to about a third of the nation’s public infrastructure: roads, bridges, stormwater systems, waste facilities. These silent workhorses make modern life tick. Yet we bankroll them with short-term, headline-grabbing grants that prize
announcements over affordability. Our system nudges us to build beyond our means, piling up more than we can ever hope to
maintain. That’s not a cash-flow problem. It’s a governance problem.
Asset management was supposed to stop this drift. Properly applied, and in conjunction with financial planning it forces councils to confront uncomfortable trade-offs between service levels, risk and cost over decades. It works best when engineers, accountants and decision-makers operate as an integrated team rather than in parallel streams.
Engineers bring deep expertise in asset condition, risk, service levels and lifecycle performance. Accountants bring rigour in financial sustainability, depreciation and long-term affordability. The real power lies in combining these disciplines, not separating them.
The recent push in some quarters to downplay or remove depreciation is revealing. It shows how many decision-makers including finance professionals, engineers and elected members alike can still default to short-term cash thinking under pressure.
Cash accounting tells you what is left in the bank account this year. Accrual accounting tells you what it costs to deliver the year’s services using long-lived assets. Depreciation is not an accounting fiction. It reflects the consumption of infrastructure over time. Ignoring it doesn’t make that cost disappear. It simply shifts it forward. When that bill finally arrives, today’s political comfort turns into tomorrow’s rate shock.
There’s another quiet issue buried in council reports: structural operating deficits. Running ongoing operating deficits while maintaining or expanding service levels is not neutral. Typically, it is a deliberate transfer of cost to future communities.
Intergenerational equity isn’t an abstract academic concept. It’s a straightforward question: are today’s ratepayers paying the full cost of today’s services? If the answer is no, Infrastructure Plans and Long-Term Financial Plans should clearly state so. Not buried in technical appendices. Not wrapped in soft language. Clearly. Too often, they don’t go far enough in drawing out the implications.
Plans identify renewal gaps. They describe asset condition. But they can stop short of confronting the political implications of structural imbalance. A plan that names the problem but avoids the conversation about solutions is not stewardship. It is just paperwork.
Nowhere is the strain felt more than in regional and remote Australia. Smaller councils run on shoestring budgets and face real shortages of skilled people. Engineers, asset managers and financial experts are in short supply. Strengthening capability, not just funding, must be
part of the answer.
Pooling scarce expertise through regional engineering and asset management hubs would allow councils to share talent rather than compete for it. Workforce policy needs the same practical focus. Overseas-trained engineers can help, but so can meaningful incentives for Australian graduates and postgraduates to build long-term careers in regional councils. Infrastructure sustainability ultimately depends on human capital, and engineers are central to that equation.
The planning frameworks themselves don’t require wholesale reinvention. What they require is consistent application and oversight. Elected members may bristle at the language of reform, but this isn’t about upheaval. It’s about discipline. Plans must be current. Plans must align. Plans must be followed. Too often, infrastructure plans and long-term financial strategies are adopted, noted, and quietly sidelined when the political temperature rises.
Institutions respond to incentives. If ribbon-cutting is rewarded, ribbon-cutting will continue. If lifecycle discipline is reinforced, behaviour will shift. Infrastructure is the physical expression of how far into the future a society is prepared to think. When renewal is deferred and depreciation dismissed, we are making a statement about our time horizon.
Australia has understood the infrastructure sustainability problem since the 1980s. We understand the maths. We understand accrual accounting. We understand lifecycle costing. The unresolved issue isn’t technical. It’s political. Are we prepared, as engineers, accountants, executives and elected representatives to make decisions in decades rather than election cycles?
A Council budget can appropriate funds. It cannot manufacture long-term thinking. Sustainability does not come from one-off funding splashes or dramatic talk of crisis. It is built on steady discipline. And discipline, ultimately, is a choice.
David Jenkins leads the Institute of Public Works Engineering Australasia (IPWEA) as Chief Executive Officer and is widely regarded as a global authority on infrastructure, asset management, and the future of education. He is also the host of the Infrastructure Matters podcast.
