A high-powered agency that oversees major infrastructure projects has waded into an explosive political debate over slashing migration levels.

Infrastructure Australia is warning it is neither feasible nor desirable for the country to turn its back on the opportunities presented by population growth.

In a report released on Friday, the independent statutory body lays out different options for how cities plan for, encourage and manage this growth.

But Infrastructure Australia is warning failing to prepare for population growth will see cities including Sydney and Melbourne suffer from congestion and a lack of access to jobs, schools, parks and hospitals.

Tony Abbott lobbed a grenade into the immigration debate this week by calling for Australia's permanent migration intake to be slashed by 80,000 places per year to 110,000.

He blamed migrants for headaches including traffic jams, house prices and job vacancies.

Senior coalition colleagues, including past and present immigration ministers, the acting prime minister and the minister for trade, all slapped down Mr Abbott.

But their public rebukes only encouraged Mr Abbott to dig in deeper, insisting he never accepted Treasury "orthodoxy" that immigration was good for growth.

Australia's population is expected to grow by 11.8 million people by 2046, which is equivalent to adding a new city roughly the size of Canberra each year for the next 30 years.

Three-quarters of this growth is expected to occur in Sydney, Melbourne, Brisbane and Perth.

"A growing population is an exciting opportunity to increase our economic prosperity and livability. The potential benefits are immense," Infrastructure Australia said in its report.

Australia faces a complex set of choices about the future of cities, each requiring trade-offs and compromise.

"But inaction is not an option, nor is business is business as usual," the report warned.

"If we fail to effectively anticipate and respond to growth, the likely results will be declining economic productivity, increasing environmental pressures and a marked reduction in each city's quality of life."

The agency called on the federal government to establish consistent frameworks to drive infrastructure development, underpinned by better planning.

It urged early community consultation, the better use of existing infrastructure, the introduction of light and heavy vehicle road user charges and an increase in public transport investment.

It also called for a focus on employment centres in larger cities serviced by public transport, rather than a scatter-gun structure reliant on private vehicles.

Infrastructure Australia recommended governments improve access to jobs, health services, schools and green spaces in outer areas of the largest cities.