Economy-wide and employment impacts of road construction and maintenance investment

摘要

In an depressed economic climate, infrastructure investment has the potential to stimulate economic growth and employment. The recent global financial crisis led to underutilisation in the Australian labour market. The Commonwealth Government's cash stimulus temporarily boosted consumer spending, but this may not translate to appreciable longer-term benefits. To avoid an unemployment crisis, road investment in new construction and maintenance was earmarked for injecting employment momentum in the economy. This paper discusses a formal impact analysis undertaken to examine the economy-wide and employment effects of road investment. It uses a modified version of the MMRF-Green CGE (computable general equilibrium) model of the Centre of Policy Studies at Monash University, and updated data, in order to assess the economic and employment impacts of road expenditure for the state of Queensland. Key findings on the economy-wide and employment effects of road investment are presented. Labour effects using employment multipliers determining the labour-capital mix are examined. The paper identifies a strong case for road investment in new construction and maintenance, which is one way where community benefits are realised both in the short and long term.