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www.afr.com | Tuesday 12 November 2019

Special Report

InfrastructureIn partnership with NAB

Reboot the system for urban growth

0 20 40 60 80 100 120 140

SOURCE: NAB, CSIRO

Real GDP per capita ($ ’000) Australia’s growth potential in 2060 under different scenarios, on 2016

Highway to a prosperous future

2016

2060f (slow decline)

■ Cooperative global context ■ Fractious global context

2060f (outlook vision)

Under Outlook vision(full potential)

Under Slow Decline(inadequate response)

Annual GDP growth (%)

Real wage growth (%)

Increase in total energy use (%)

Net emissions

Increase on returns to landholders ($b)

Household spend on electricity (% income)

Increase in avg density of major cities (%)

Environmental plantings (Mha)

2.75–2.8

90

6–28

Net-zero

42–84

-64

60–88

11–20

2.1

40

61

Same levels as 2016

18

-38

Similar density to 2016

Minimal change

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Christopher Niesche

Continued pS3

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Planning As citiesgrow, there is a need toredesign access toinfrastructure facilities.

Planners and governments in Austra-lia’s major cities face a choice as theygrow, says Tim Baynes, a seniorresearch scientist in population growthscenarios at the CSIRO.

The first option is for cities to keepexpanding and building on theirperimeters, but this means that gettingaround the cities will become increas-ingly difficult, especially if better-paidknowledge jobs remain concentratedin city centres.

The costs of the approach will con-tinue to mount. The Australian Infra-structure Audit 2019 projects that thetotal cost of road congestion and publictransport crowding in Australia’s largecities will be $39.6 billion in 2031.

The other possibility is to increaseurban density and infill.

This strategy is already outlined inmany Australian cities’ metropolitanplanning documents, says Baynes, whoco-authored the Australian NationalOutlook report produced by the CSIROand the National Australia Bank, whichcanvassed various scenarios for Aus-tralia’s future.

Cities need a multi-dimensionalresponse.

‘‘(We have) mixed land use, the newcentres of employment and diversehousing options, so that you have com-munities that are not just a place toreside,’’ says Baynes. ‘‘They are vibrantmixed-income communities.

‘‘People of different income stratacan live and work in the same place,with new centres and new employ-ment locations.

‘‘This is the vision – layers of density,

diversity in housing, and mixed landuse, and new employment centres.’’

As the cities grow, they won’t onlyneed more transport infrastructure –the infrastructure will need to bedesigned differently. Baynes says the‘‘hub and spoke’’ model, where trans-port radiates out of the centre likebicycle spokes, has served Sydney andMelbourne well until now.

‘‘The moment you get to five million[people], you meet this geometry whereit’s very difficult to move laterallyaround the city. You have to go in tocome out again to get to places,’’ says

Baynes, who is also adjunct associateprofessor at Australian National Uni-versity’s Fenner School of Environ-ment and Society.

‘‘At some point, you have to perhapsbe a little brave in infrastructure andlook at the connections that aren’t yetthere.’’

Australia’s population is forecast tohit 41 million people by 2060, accord-ing to research by the ProductivityCommission cited in the National Out-look Report. Sydney and Melbourneare each forecast be home to 8 to 9 mil-lion people, with Brisbane and Perth

each housing 4 to 5 million people.Rapid population growth presents

the challenge of where the additionalpopulation will live and work, whilestill having convenient access to infra-structure such as transport, schoolsand hospitals.

‘‘It’s finding a way in which to ulti-mately develop cities in a sustainableway to accommodate more people andall of their requisite needs, and part ofthat involves almost creating citieswithin cities,’’ says Jaron Stallard,global head of infrastructure at NAB.

In fact, Sydney is already pursing a

‘‘Three Cities’’ strategy, with threemajor population centres where peo-ple can work, live and play.

The infrastructure needs will beextensive. Australia already has a $200billion pipeline of committed infra-structure projects, according to the2019 Australian Infrastructure Audit.

‘‘It’s very evident that the public sec-tor’s ability to fund that is going to beinsufficient to support that need. Therole of private investment is thereforecritical,’’ says Stallard.

Importantly, several institutional

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AFRTuesday 12 November 2019The Australian Financial Review | www.afr.com

2 Special Report

Building forrenters set tochange views

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James Dunn

Renting is becoming a popular option and builders as well as investors are keen to cash in on the trend. PHOTO: SAM MOOY

Property Council of Australia CEO KenMorrison. PHOTO: DOMINIC LORRIMER

The build-to-rent property sector isestablishing a foothold in Australia –and it just might change the way peopleview renting.

BTR developments are designed forrenting on a long-term basis, dealingwith one owner. In the United States,where the sector is much more estab-lished than anywhere else, the build-ings typically are owned byinstitutional investors, but the ownercould be the developer.

Either way, the format provides ten-ants with an experience similar tohome ownership. As longer termleases are struck, the security of tenurecan help the occupants to live in moredesirable areas and develop muchstronger community ties, and, in effect,give them an experience very similar toowning a home.

In the US, the sector is known as‘‘multifamily’’ – and institutions aremajor investors in the sector, lookingfor income and diversification.

According to global real estate invest-ment management firm Nuveen, the USmultifamily sector is a very resilientasset class: for the past 40 years, theaverage annual income return from itwas 6.8 per cent, and even through theglobal financial crisis, the averageincome return was 5.5 per cent.

The sector also benefits its tenantcustomers, and with housing affordab-ility, bigger and denser cities, growingpopulation and a looming undersupplyof apartment stock all becoming prom-inent issues for Australia, BTR develop-ments are kicking off as part of theresponse.

The country’s first true BTR projectopened this year on the Gold Coastwhen UBS Asset Management, Austra-

lian builder Grocon and global realestate giant JLL converted 1251 apart-ments in the former Gold Coast Com-monwealth Games athletes village intoa $550 million village of rental units,known as ‘‘Smith Collective’’.

The Element 27 building in the Perthsuburb of Subiaco, developed by USBTR heavyweight Sentinel Real Estate,opened in October.

ASX-listed real estate firm Mirvacwill complete its first purpose-builteffort within the Pavilions project at theSydney Olympic Park next year andrecently bought a completed 490-unitBTR project opposite Queen VictoriaMarket in the Melbourne CBD.Melbourne-based developer SaltaProperties plans a BTR apartmentblock in Melbourne’s Docklands, whileUS BTR giant Greystar has joinedforces with local partner MacquarieCapital to plan Australian projects.

Ken Morrison, chief executive officerof the Property Council of Australia(PCA), sees BTR as a positive develop-ment. ‘‘Australia has had the ‘build-to-sell’ model for many decades, and ourpolicy settings are based on that, butwith more people renting, our citiesgetting bigger, and people wantingmore choice in their housing options,it’s clear that there’s a demand for thistype of product. Now we have to makesure that the policy frameworks arethere so that we get the supply to matchthat demand,’’ he said.

Mr Morrison said land tax, withhold-ing tax rates for foreign institutionalinvestors and the GST treatment ofbuild-to-rent are all potential pitfallsthat must be worked through, as wellas planning frameworks and designguidelines, which had been set uparound build-to-sell housing.

‘‘There are quite a few discussions

that the industry and governmentsneed to have about a truly level playingfield for BTR,’’ he said.

The arrival of build-to-rent coincideswith increased focus on ‘‘affordable’’housing – particularly in the context ofa city’s ‘‘key workers’’, a category thatincludes vital but relatively low-paidoccupations such as police, nurses, fire-fighters and teachers – and on ‘‘social’’

housing, catering to low-income anddisadvantaged people.

In the UK, where the BTR sector isgrowing apace, the government hastried to encourage BTR developers toinclude these housing categories intheir projects.

‘‘If there is planning gain on a devel-opment, the local planning authoritycan put certain restrictions on thedevelopment, saying a certain portionof it can be only used for social andaffordable,’’ said Michael Carr, head ofsocial housing finance, Europe andNorth America, at National AustraliaBank. ‘‘There will be a reasonably com-plicated negotiation, which will involvea number of drivers, but the objectivefrom the planning authority is to get asmuch social/affordable into that devel-opment as they can.’’

Whether it is possible to combinesocial and affordable housing with‘‘true premium BTR’’ is untested in theAustralian market, said NAB’s Bill Hal-marick, head of real estate, corporate

and institutional banking. ‘‘The inter-esting point here is that the BTR modelis built around a premium rent beingpaid, because you’re providing all sortsof shared amenities – it could be a pool,a fitness centre, a concierge, a cinema, abar, a rooftop garden. That modelassumes that you’re going to be able tocharge premium rent, which is dia-metrically opposed to the concept ofsocial and affordable housing.

‘‘The private developers that are set-ting up BTR assets at the moment, Idon’t believe they’re really looking toincorporate social and-or affordablehousing into those developments, ifthey’re not required to,’’ he said.

‘‘The flip side is that governments arecoming at it from a different angle –they are saying, ‘We can offer you a siteand you can do 70 per cent BTR, butyou will have to include 20 per centaffordable and 10 per cent social in thatproject.’ But it’s fair to say that whetheryou can actually blend social andaffordable in with BTR is unclear.’’

$22 trillion hole in global infrastructure spending● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

Mark Eggleton

Cranes in the skyline are a goodindicator of economic activity pickingup. PHOTO: STEVEN SIEWERT

Global infrastructure spending needsto increase significantly if we want tosustain economic growth into thefuture, according to the most recentGlobal Infrastructure Outlook releasedby the G20’s Global Infrastructure Huband Oxford Economics.

The report outlines a potential short-fall of $US15 trillion ($22 trillion) ininfrastructure spending between nowand 2040, with the roads, electricityand airport sectors confronting thelargest gaps in spending requirements.

‘‘The world will need to increase theproportion of GDP it dedicates to infra-structure to 3.5 per cent, compared tothe 3 per cent expected under currenttrends,’’ the report says.

Closer to home, Australia is still inthe midst of a construction boom, withthe latest RLB Crane Index indicatingthere are now 757 cranes assisting con-struction work across the nation.

In fact, of all the cranes removedfrom completed projects, 100 per centwere placed back on new projects dur-ing the last six months.

Moreover, while we’re seeing adownturn in residential construction,it’s being offset by state and federal gov-ernment infrastructure spending andplanning as is evident by ‘‘the location

of cranes along key city transportationcorridors and activity centres’’.

‘‘This is most evident in Sydney alongthe Pacific Highway and the Dande-nong rail corridor in Melbourne,’’ thereport says.

NAB’s Global Head of InfrastructureJaron Stallard says infrastructurespending is very strong, especially asthe pace of global urbanisation contin-ues.

He adds there is a lot of catch-up

infrastructure that needs to be builtand with a relatively sluggish globaleconomy, central banks have pulled alot of levers on monetary policy, whichhas, in turn, released a lot of cheap cap-ital onto global markets.

‘‘There has been a mountain ofprivate capital raised and it’s ready tobe deployed to infrastructure,’’ he says.

Looking back to the Global Infra-structure Outlook, Stallard acknowl-edges there’s plenty of demand to build‘‘bread and butter’’ infrastructure suchas road and rail, but there’s a huge pipe-line of telecommunications infrastruc-ture that also needs to be built as bigdata and the Internet of Things becomemore omnipresent in every part of theeconomy.

As for whether infrastructure pro-jects are profitable upfront, Stallardsuggests capital providers have movedbeyond a simple cost-benefit analysisof projects.

‘‘There is now more of a focus on theongoing service provided over a longertenor.’’

Stallard says the public, private part-nership model is ‘‘alive and well’’ inAustralia, despite some suggestionslarge contractors are a little wary of themodel and governments are loath tolock in guaranteed rates of return to

contractors because of the potential ofcostly bailouts if a project doesn’t per-form.

‘‘There’s always a debate about PPPs,especially when things don’t go wellbut the private sector brings in a lot ofproject expertise, especially aroundongoing running costs, which govern-ment doesn’t have,’’ he says.

NAB goes well beyond funding tradi-tional PPPs though and works with cli-ents right across the funding spectrum.

‘‘We’re often in at the project leveland work with a client’s business astheir infrastructure needs develop. Forexample, with an airport client lookingto fund new runways, we’ll ask ‘howbest do you fund this expansion’, andlook for innovative funding solutions.’’

Internationally, NAB is now rated inIJGlobal’s Top 10 banks globally by pro-ject finance deal value and transactionnumbers.

Stallard says while Brexit is draggingthe UK down, the pipeline for Europe isstrong with lots of digital infrastructureand in the United States, where there isa West Coast LNG terminal construc-tion spike as the country’s shale gasboom continues to expand and produ-cers look to tap into Asian markets.

And as global infrastructure contin-ues to boom, many Australian funds

are looking to invest offshore, espe-cially local super funds, who are sittingon huge pools of cash and need to findopportunities in larger markets.

Alternatively, global funds look atAustralia to invest due to our innateadvantages like the strong rule of lawand solid regulatory environment.

More pertinently, infrastructurespending globally isn’t discretionary,it’s fundamental to society. The key,according to Stallard, is getting theplanning right and ranking what needsto be done.

‘‘As Infrastructure Australia haveindicated, we need to be strategic aboutour infrastructure priorities and have adiversified infrastructure plan.’’

Speaking at the 2019 InfrastructureAustralia Audit launch, the organisa-tion’s chair Julieanne Alroe spoke ofthe need to be more strategic abouthow we plan and fund local projects,especially in regional areas.

She said while our major urbanareas and regional centres are wellserved by infrastructure, ‘‘in manyparts of the country, service provisionfalls below what is acceptable for ahighly developed nation’’.

‘‘Addressing these imbalances ininfrastructure service provision needsto be a priority,’’ she said.

InfrastructureS2

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AFR Tuesday 12 November 2019www.afr.com | The Australian Financial Review

3Special Report

Climate change needsplanning for resilience

The floodgates of Hume Dam were opened to cope with a huge inflow of water.Extreme events require adaptability. PHOTO: MARK JESSER

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Christopher Niesche

Infrastructure Australia CEO RomillyMadew. PHOTO: PAUL JEFFERS

Infrastructure owners face a big chal-lenge – balancing the need to maketheir assets more resilient againstextreme climate events while balan-cing other demands on their funds.

The stakes are increasingly high asclimate change makes disaster eventsmore frequent and more severe.

Natural disasters will cost Australia$39 billion a year by 2050 unless moreis invested in infrastructure resilience,according to a study by the AustralianBusiness Roundtable for Disaster Resi-lience and Safer Communities.

The National Institute of BuildingSciences estimates that for every dol-lar invested on making infrastructureand communities more resilient,approximately $6 is saved in the post-disaster recovery period.

But operators of existing infrastruc-ture have a hard question to answer asthey are also pushed to increase effi-ciencies and boost returns.

‘‘How do you make that investmentdecision?’’ asks Peter Chamley, theAustralasian chairman of globalengineering firm Arup and an author-ity on infrastructure resilience.

‘‘Do I spend money on being moreefficient or do I spend money on res-isting a shock that might not come foranother 10 years?’’

Infrastructure resilience doesn’tjust relate to the ability of a piece ofinfrastructure to withstand a shockevent, he says, but also to adapt tochanging conditions or to be able tobounce back quickly after it hassuffered a shock.

‘‘One of the issues is really aroundshifting designers’ thinking away frombuilding something that is resistant orhas some fail-safe level of protection toperhaps softer systems that in a verycontrolled way you allow to fail safelyand designed in such a way that it canbouncebackquicklyaftertheeventhaspassed,’’ he says.

For instance, instead of buildingever higher walls to protect a flood-prone area, some parts of it might beallowed to flood, but be able to drainquickly and contain infrastructurethat can cope with some inundationfor a short period.

Importantly, resilience shouldn’tjust be considered in terms of isolatedpieces of infrastructure but as sys-tems, because so many infrastructureassets have become more complexand interdependent.

Water supplies, for instance, oncerelied solely on gravity and weretherefore straightforward. Now theyneed power for pumping, chemicaltreatment facilities and the Internetof Things for monitoring operations.

So far, the challenge of infrastruc-ture resilience is not being met. The2019 Australian Infrastructure Audit

found that Australia lacked compre-hensive resilience strategies for itsassets and networks.

‘‘Planning for resilience requires acomprehensive risk assessment, andan understanding of the potentialsocial, economic and environmentalcosts of outages, damage, disruptionor failure,’’ Infrastructure AustraliaCEO Romilly Madew said in a speechin August.

Madew also warned that climatechange-induced disasters could affectAustralia’s financial stability as insur-ers faced large anticipated payouts;emissions-intensive companiesbraced for new legal liabilities; andchanges to regulation put previouslyvaluable assets at a redundancy risk..

‘‘All of this could lead to sharpadjustments in asset prices, whichwould have consequences for Austra-lia’s financial stability and long-termeconomic prosperity,’’ she said.

David Jenkins, head of sustainablefinance at NAB, says, ‘‘Most, if not all,

of these assets are fundamental to theeconomy and the communities, andthe costs and the burden of eitherrepairing or making these more resi-lient is becoming increasingly a chal-lenge.

‘‘The stranded asset risk is very real... if you consider some of these low-lying areas that are increasingly sub-ject to rising sea levels and flood levels,at some point, in many of these areas,it’ll be either a case of retreat, relocate,or significant investment to addressthese continuing impacts.’’

Jenkins says NAB is working tochange the focus away from beingreactive to a more proactiveapproach, but funding is a challenge.

‘‘In many of the cases, the burdenhas fallen squarely onto the local gov-ernment or state government levelwhere there’s been limited opportun-ity or little consideration given to theapportionment of cost on the benefi-ciaries for this style of infrastructure,’’he says.

‘‘We’re trying to find ways in work-ing with our customers and govern-ment and private sector entities to tryand find ways to develop new finan-cing solutions to assist with these.’’

One of the challenges is how toidentify and capture streams of rev-enue to repay the investment in retro-fitting infrastructure – that is, how toapportion the benefits to the variousbeneficiaries and how to monetisesome of those benefits.

A collaborative approach betweenthe government and the private sec-tor, as well as developers and assetowners, is essential, he says.

Reboot the systemfor urban growth

From S1

funds and superannuation fundshave already said they want to investin infrastructure.

‘‘There’s absolutely no shortage offinance for infrastructure in Austra-lia. It’s an attractive sector and there’sa lot of private money – both from theequity and the debt side – to invest.’’

The timing and sequencing of pro-jects will be a challenge. Sydney andMelbourne alone have $78 billion incommitted transport infrastructure.

‘‘The money is there,’’ Stallard says.

‘‘What people need to be consciousof is around ensuring that the pipe-line of activity is undertaken in a co-ordinated fashion, such that youcan still get the right and appropri-ate expertise actually on theground.’’

Planners also need to focus oncreating liveable cities and ensurethere is sufficient green space, andthat infrastructure allows people tomake the best use of beaches orparklands. This accessibility helpssustain a healthy population.

‘‘It’s very hard to put a monetaryvalue on this,’’ says Stallard.

‘‘But if we reserve this space andcreate a park and we’ve got all thesewater features in there as well andtrees and greenery, and we know

that people are going to use that as aresult, maybe people have less sickdays, therefore there’s less demandon our health system.’’

Baynes says that in pursuing themulti-city strategy, it’s important thatplanners don’t just try to recreate theexisting CBD.

‘‘It’s how you gracefully evolve thecity to provide other centres that arefurther away but not too far away,’’ hesays. ‘‘If you can connect to it quicklywith infrastructure, you can makenew centres that don’t compete.’’

For example, California has differ-ent cities, each of which perform dif-ferent functions – San Francisco is thetech hub, while Los Angeles has astrong media sector and San Diego isa trade hub.

IndustryinsightDavid GallChief Customer Officer –Corporate and InstitutionalBanking, NAB

Achieving the positiveoutcomes describedwithin the OutlookVision is withinour grasp.

This content is produced by TheAustralian Financial Review incommercial partnership with NAB.

E arlier this year, the AustralianNational Outlook report askedwhat Australia would be like

economically, socially andenvironmentally in 2060.

The study – a combination of CSIRO’smodelling and research with input fromNAB and 19 other participants –presented a compelling view about twopossible futures for Australia.

It looked ahead 40 years and painted apicture of what life could be like for ourchildren and grandchildren.

In what is termed the ‘‘OutlookVision’’, Australia takes decisive actionand a long-term view, achieving positiveoutcomes. In ‘‘Slow Decline’’, Australiafails to adequately address the globaland domestic issues, resulting indeclining economic, social andenvironmental outcomes.

Achieving the positive outcomesdescribed within the Outlook Vision iswithin our grasp. But we need to takedefinitive action on five core shifts –across energy, land use, culture, industryand the urban landscape – to get there.

What has emerged since the reportlaunched in June is that its significancelies not just in the data and numbers.

The report is also driving healthydebate and conversation because itprioritises the long-term prosperity ofour nation through careful considerationof what these five core shifts mean andthe role each of us can play.

That’s particularly powerful at thismoment in time, when the short-termoutlook for Australians – and citizensacross the world – is indeed uncertain.

The daily news cycle is a reminder thatwe face slowing global growth,escalating US-China trade tensions andconcerns about Brexit. Capitalexpenditure is down 1 per cent from ayear ago.

NAB’s Q3 Australian ConsumerAnxiety Index shows that consumeranxiety rose 2.9 points over theSeptember quarter to 57.3 points, in partattributable to global and domesticeconomic uncertainties.

And it’s a similar story for businessowners. The NAB Quarterly BusinessSurvey for the third quarter of 2019showed confidence as being well belowaverages in 2018, falling 7 points to -2.

If we can address the challenges andopportunity within technologicalchange, climate change, demographics,social cohesion, trust in institutions andthe rise of Asia, the National Outlookpredicts Australia can set a path tohigher GDP per capita by 2060.

It’s a path where we will see strong

economic growth, greater energyaffordability, ‘‘net zero’’ greenhouse gasemissions and liveable major cities.

But navigating this path won’t be easy.For example, a growing and ageing

population is placing stress on our majorAustralian cities, particularly theprovision of housing near employment,services and amenities.

For our urban landscape, a positivefuture relies on making decisions thatshape inclusive communities wherepeople can live within easy commutes ofwork and services.

There are opportunities for both thepublic and private sectors to design andbuild higher-density living in the so-called ‘‘middle rings’’ of cities, increasingaccess to transport, health andeducation infrastructure as well asrecreation facilities within an easycommute of one or more city centres.

Higher-density planning and buildingup the middle ring can reduce the yearlydistance travelled by vehicles in our citiesby 45 per cent. It brings people closer tojobs, amenities and where they need tobe in their daily lives. It builds vibrant anddiverse communities.

But the key piece of the puzzle ishousing – and importantly, affordableand specialist housing for those thatneed it. And this is where NAB can makea meaningful contribution.

We are allocating $2 billion over thenext three years to help moreAustralians access affordable housing.

We are focusing on providing loansand developing new financing avenuesfor not-for-profit groups and otherorganisations that build crisisaccommodation, community housing,disability housing, build-to-rentproperties and sustainabledevelopments.

While we don’t have all the answers,we have deep understanding of thehousing market and the rightrelationships to have a positive impact.

Ultimately, we are here to servecustomers, to keep their money safe andenable investment. We are open forbusiness and are lending to businessesthat want to grow.

And more broadly, we play animportant role in supporting ourcustomers to create long-termprosperity in Australia. Access toaffordable and specialist housing is oneway NAB is navigating the pathway toaspirational outlook vision in 2060.

The ANO research has also led to apartnership between NAB andClimateWorks Australia to help future-proof the agricultural industry againstenvironmental challenges.

We also recently committed $2 billionin financing to help emerging technologycompanies.

Since announcing this series ofcommitments, we’ve receivedoverwhelming feedback from thecommunity and from our customers. Weall have a vested interest in whereAustralia is heading and what we can alldo about it to drive change.

We are committed to doing our parton this journey and taking meaningfulaction. We hope this special reportpromotes more discussion and positiveaction for our nation’s future.

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AFRGA1 T004

Want big investment ideas?Our Corporate & Institutional team can help

NAB Big Ideas

Australian and off shore investors have the power to change the world. That’s why we connect them with socially responsible investment opportunities

like investing in NAB’s Low Carbon Shared Portfolio and Australia’s fi rst green RMBS. After all, it’s big ideas like these that will help shape the future.

WE BRING GREENIDEAS TO INVESTORSWHO REALLY CARE

© 2019 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. A153284-1119

AFRTuesday 12 November 2019The Australian Financial Review | www.afr.com

4 Special Report

There’s wonderful life after death for waste

Veena Sahajwalla, of UNSW, says we need to consider end-of-life use for products.

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Christopher Niesche Four-fifths of wastein Australia comefrom commercialand industrial uses.

Veena Sahajwalla wants us to recon-sider how we think about end-of-lifeproducts.

‘‘It’s interesting that we refer tomaterials when they reach end-of-lifeas waste,’’ says Sahajwalla, director ofSustainable Materials Research &Technology at the University of NewSouth Wales (SMaRT@UNSW).

‘‘It’s actually missing out on a fantas-tic opportunity by simply putting it intothe problem basket.’’

Take a jam jar, for example. ‘‘Whyare we calling it a problem just becauseit no longer carries our food in it?’’Sahajwalla asks.

Many of these products are made ofhigh-quality materials and we shouldlook at possible uses for the materialsthat go beyond the same purpose, suchas another jar or bottle.

The philosophy underpins the workof SMaRT, which is developingmicrofactories to transform wastematerials into other products. They canoperate in as little as 50 square metresof space and so can be located wher-ever waste is stockpiled.

One of the factories takes end-of-lifeglass and textile products and trans-forms them into tables and counter-tops which contain up to 80 per centrecycled materials, and which are onshow at some of Mirvac’s display apart-ments.

Sahajwalla says that if turning end-

of-life products into new products is tohave a sustainable role in tackling thewaste crisis, they will need to competeeconomically with other products inthe market.

There is already some progress onthis. One of the SMaRT microfactoriesis producing plastic filaments for3D printing with an ‘‘absolutely com-petitive price’’, she says.

This relies on making products themarket needs.

There might be little point in produ-cing more glass jars, for example,because Australia might already have asurplus of jars, thanks to the large

amount of imported manufacturedfood.

Waste is a growing problem in Aus-tralia.

The National Waste Report 2018 pre-pared for the Department of the Envir-onment and Energy found that in2016-17, Australian generated2.7 tonnes of waste per capita.

The nation as a whole produced anestimated 67 million tonnes of wasteincluding 17.1 million tonnes ofmasonry materials, 14.2 million tonnesof organics, 12.3 million tonnes of ash,6.3 million tonnes of hazardous waste,5.6 million tonnes of paper and card-

board and 5.5 million tonnes of metals.It is a steep rise from 2006–07, when

57 million tonnes of waste was gener-ated. However, on a per capita basis,waste declined by 10 per cent over thistimeframe.

Despite the focus on householdwaste, Cameron McKenzie, chief exec-utive of Aspire, says about four-fifths ofwaste in Australia come from commer-cial and industrial uses and construc-tion demolition.

Aspire is working to match this sortof waste with builders and others whocan reuse the materials rather thanhaving them go into landfill.

The business – which was spun outof the CSIRO in April – works via a plat-form where it matches owners of wastewith businesses which have a use for it.

It has matched businesses withwaste Styrofoam with a company thatthen shreds it before mixing it withconcrete for thermal bricks for con-struction.

A food company with surplus pro-duce was matched with another busi-ness which picks it up and distributessome of it to disadvantaged people andsome to a piggery.

Some companies are able to sell theirwaste, but even for those that give itaway, there can be financial rewards.The food company, for instance, wasable to cut its rubbish bill from $8000 amonth to $1500.

Behind the platform lies analyticswhich do the matching, becauseproducts are not always like-for-like.The analytics also look at what theenvironmental impact of the end usewill be.

It preferences those that will emitless carbon dioxide and those whichare nearer, so require less transport.

The Melbourne-based business is inthe process of expanding nationallyand McKenzie says that in the last fin-ancial year it converted 45,000 tonnesof waste and saved over $210,000 insupply chain costs.

Also in Melbourne, a group of sub-urban councils banded together toform the South Eastern Organics Pro-cessing Facility, which will take up to120,000 tonnes of household food andgarden waste a year and turn it into50,000 tonnes of usable compost.

Carlos Gros, a director of SacyrEnvironment Australia, which willoperate the facility, says the compost-ing process at the facility will be thesame process that happens naturallybut quickened through the circulationof water and oxygen through the waste.He says that as a general rule, anythingthat can be reused or have a new useshould not end up in landfill.

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