The Morrison government will launch a powerful inquiry into Australia's migration program, opening the door to further cuts in immigrant numbers and moves to push more migrants into the regions to take pressure off congested areas in Sydney and Melbourne.
The comprehensive review, to be led by Parliament's joint migration committee, which usually examines the nation's detention centres and visa laws, will take in population and infrastructure pressures. It comes a day after Infrastructure Australia warned the cost of lost productivity due to congestion would double to $38.8 billion by 2031 if the government did not act.
Members of the Coalition backbench last year called for a review of the migrant intake, which has given Australia one of the fastest-growing populations in the developed world.
The population is expected to grow almost 24 per cent to 31.4 million by 2034, according to Infrastructure Australia, and most new residents are expected to live in Sydney or Melbourne.
The government has announced plans to slice permanent migrant numbers, but April's federal budget figures show total net overseas migration migration will peak at 271,000 this year, up to 50,000 more than was assumed in the 2018-19 budget.
The parliamentary inquiry, expected to be announced on Wednesday, sets up a contest between the Treasury, Infrastructure and Home Affairs portfolios over the direction of immigration policy for the second term of the Morrison government.
Treasury has historically backed a large migration program, despite resistance from the other portfolios, to allow increased tax revenue to flow to the budget and push Australia through 28 years of economic growth.
The broadly structured inquiry will enable committee members, drawn from both sides of politics, to interrogate Australia's migration rate, its impact on infrastructure, the broader economy and methods of encouraging regional migration outside of Sydney and Melbourne.
It is expected Tuesday's Infrastructure Australia audit will form a key part of deliberations after the regulator told the government to ramp up its spending on key transport, roads and other services to maintain the nation's quality of life.
Prime Minister Scott Morrison claimed Infrastructure Australia had failed to take into account an extra $23 billion in promises made since the federal budget.
"We've had a 50 per cent increase, and more, in what we are investing as a government in infrastructure and we've put in place the population management practices and frameworks to support that. So that's what's required," he said on Tuesday. "That's what we'll keep doing."
But Infrastructure Australia's report shows few of the projects announced in April directly address the most congested roads it identified in either Sydney or Melbourne.
Of the $7.3 billion in extra NSW spending announced in the federal budget, $3.5 billion was earmarked for the western Sydney north-south rail link, with another $1.6 billion for extending the M1 to Raymond Terrace.
Another $700 million was pledged for work on the Newell Highway in the state's west, $500 million for a third crossing of the Hawkesbury River and $500 million on the Princes Highway on the south coast.
None of the projects deal with the most congested roads in Sydney as identified by Infrastructure Australia. They included the 4km route between North Sydney and the CBD via the Harbour Tunnel, the M4 between Mount Druitt and Westmead and the M5 between Liverpool and Sydney Airport.
Of the $6.2 billion in extra spending announced in Victoria in the federal budget, $2 billion was for the Geelong-Melbourne fast-train project on which work is not slated to start until at least 2023-24.
Another $360 million was earmarked for the Western Highway between Ararat and Stawell, $208 million for the Goulburn Valley bypass of Shepparton and $300 million to seal roads in the Dandenong Ranges.
Mr Morrison cited the 30 commuter car parks across Melbourne promised by the government in the run-up to the May election as examples of efforts to combat congestion. Almost none of the car parks were in areas identified by Infrastructure Australia as facing major congestion issues, with most going into Liberal-held electorates in Melbourne's south-east.
Labor leader Anthony Albanese accused the government of not "lifting a finger" for commuters stuck for hours in gridlocked traffic.
"Scott Morrison should listen to the experts at Infrastructure Australia and fast track investing in the rail and road projects that will get our economy moving again," he said.
The Prime Minister has ruled out sacrificing some of the forecast $7.1 billion surplus to help manage the infrastructure pressures, leading the private sector to plead with Mr Morrison to let them get involved.
IFM Investors, the investment arm of Industry Super, said on Tuesday the government's ideological bias was preventing it from accessing up to $140 billion in funds held by the union and employer-aligned giant.
IFM chief economist Alex Joiner said there needed to be a build-up of trust after several years of tension between the sector and the government. The government has accused super funds of failing to act in the best interests of their members.
Mr Joiner said IFM funds could be used by the government to avoid reducing the forecast surplus while delivering key infrastructure projects.
"We want to do this, we have the capital to do this and we want to do the best by our members," he said.
"It is a pretty powerful story for the superannuation savings of Australians to be invested in the productive capacity of their country."
- SMH/The Age