Fed Govt injects $24.5B into infrastructure

The Federal Government has announced $24.5 billion in new funding for infrastructure projects and initiatives in its 2018-19 Budget, released last night.

Read our breakdown of the infrastructure spend and commentary from industry.

Roads

The Federal Budget outlines funding for major urban and regional road projects including: $1 billion for the M1 Motorway corridor, $3.3 billion for Queensland’s Bruce Highway, $1.4 billion for Adelaide’s North-South Corridor, $971 million to build the Coffs Harbour Bypass on the Pacific Highway in NSW.

Other big-ticket projects include:

$1.75 billion for the new North East Link in Melbourne
$560 million to deliver Stages 2 and 3 of the Bunbury Outer Ring Road in Western Australia
$280 million for regional road works in the Northern Territory
$461 million to build a new Bridgewater Bridge near Hobart
A $200 million investment in the Barton and Monaro Highway corridors linking the Australian Capital Territory to New South Wales.

In addition to major road projects, the Budget also outlined $744.5 million from 2013-14 to 2021-22 to deliver safety improvements through the Black Spot Program.

Rail

The Budget makes significant investment in passenger and freight rail, with $7.9 billion allocated towards rail projects across Australia, including: $5 billion for Melbourne Airport Rail Link, $1.1 billion to develop further stages of Perth’s METRONET project, and $475 million to build a new rail line to Monash Precinct in Melbourne.

Other rail investments include:

$400 million to duplicate a section of the Port Botany Rail Line and construct the Cabramatta passing loop
$390 million to upgrade the Beerburrum to Nambour line in Queensland
$225 million to electrify the Frankston to Baxter line in Melbourne
$220 million to complete the electrification of the Gawler line in Adelaide
$50 million towards a business case for the Western Sydney Airport North-South Rail Link which will be jointly funded with New South Wales as part of the landmark Western Sydney City Deal
$50 million to plan and deliver further upgrades to the Geelong Rail Line.

The Australasian Railway Association (ARA) supported the $7.9 billion investment in rail, noting it is a significant boost to the sector.

“The ARA acknowledges the Government’s commitment to both passenger and freight rail in our cities and in our regions, enhancing our national and local economies, providing greater job opportunities for Australians and improving liveability in our cities,” said ARA CEO, Danny Broad in a statement.

“The ARA welcomes $400 million injected to ease congestion around Sydney Airport through the duplication of tracks on the line to Port Botany. Every single additional train with containers along this rail line will take 50 trucks off the road, creating 150 jobs during construction.

“All in all this is an investment of $7.9 billion to rail in Australia, which is good for our economy, jobs and our cities.

However, with the significant pipeline of work over the next decade, Mr. Broad said it is imperative that Commonwealth, State and Territory Governments work collaboratively with industry to identify the long-term labour skills required, ensuring training methodologies are leading edge, as well as enhancing traineeship and apprenticeship opportunities and capabilities.

“If we do not get this right and invest now in the skills needed tomorrow, we will be putting the cart before the horse, resulting in projects not being delivered on time, delays and congestion to our networks – ultimately not solving the problems we are there to fix,” he said.

In a statement, CEO of Consult Australia – a body representing consulting firms in the built environment – Megan Motto, “cautiously welcomed a continued emphasis on infrastructure” in the Federal Budget.

A statement from the organisation noted that of the $24.5 billion committed to new projects, less than a fifth is projects to be spent in the next four years, leaving projects susceptible to economic or political change.

“That a government can move from ‘budget emergency’ to personal tax cuts in less than five years, highlights political variability in the economy. Of the $5bn allocated for the Melbourne Airport, for example, just $250 million is projected to be spent over the next four years, and even this is subject to the project’s approval by the Victorian Government,” Ms. Motto said.

“Consult Australia welcomes the focus on infrastructure, but we do cautiously, knowing a great deal of spend is based on future projections and externalities outside the Treasurer’s control.”

Chief Executive of industry body Infrastructure Partnership Australia Adrian Dwyer noted that it was concerning to see that the Federal Budget has reduced real infrastructure funding by $2 billion over the forward estimates.

“This will be disappointing to the states, because the warm infrastructure narrative pre-budget has not been met with cold hard cash in the budget papers,” he said.

“Infrastructure projects like metro in the major cities, better freight connections and safer roads will need much greater focus from all sides of politics in the run up to the next election.

He said Australia faces a complex task in finding the money we need for the infrastructure we want.

“At a time when our population is growing and our cities are more congested than ever, we need to see infrastructure dollars trending up not down. We need to see $10.7 billion put back into the budget for infrastructure,” Mr Dwyer said.

Infrastructure initiatives

The 2018-19 Budget has outlined a number of initiatives to help deliver Australia’s infrastructure, including $1 billion investment in an Urban Congestion Fund. The Government said the fund will focus on alleviating the burden of traffic congestion by investing in projects in urban areas that address pinch points and last-mile access to ports, airports and freight hubs.

Another $250 million has been allocated to a Major Project Business Case Fund, which the government said will enable it to work in partnership with state and territory government to develop business cases for major projects.

The first business cases under the fund include $15 million to support planning for passenger rail between Toowoomba and Brisbane and $10 million for EastLink WA (Orange Route).

This Budget also includes $3.5 billion to establish the Roads of Strategic Importance initiative, which will upgrade key freight corridors in regional Australia.

The Government said the initiative will also benefit urban areas where the primary focus will be last-mile access to ports, markets, airports and intermodal facilities.

Some of the funding from this initiative is earmarked to support a number of regional projects, including: another $1.5 billion for Northern Australia to deliver better access for industry and communities, $400 million to upgrade regional highways in Tasmania, including the Bass Highway, $220 million to deliver a bypass of Bindoon on the Great Northern Highway in Western Australia, and $100 million in additional funding for the Barton Highway corridor to improve access from regional NSW to the ACT.

Commenting on the new initiatives in a statement, Ms. Motto said that it is surprising to see separate funds for congestion, roads of ‘strategic importance’ and a major project business fund.

“All are welcome if they support existing work by Infrastructure Australia who already prioritise projects on this basis,” she added.

A further $200 million has been allocated to deliver a third round of the Building Better Regions Fund, while the Stronger Communities Programme will be extended for a fourth round with an injection of $22.5 million.

The Budget also includes a number of decentralisation initiatives, which the government said will boost economic growth and provide more opportunities for secure and high-paying jobs outside the “traditional public-service strongholds of Canberra, Melbourne and Sydney”.

Six Government entities will be relocated, including:

The Office of the Registrar of Indigenous Corporations moving from Canberra to Darwin
Department of Prime Minister and Cabinet Indigenous Affairs Group Regional Network moving from Melbourne to Shepparton in Victoria and from the Sydney CBD to Parramatta in the city’s west
The Unique Student Identifier Registrar moving from Canberra to Adelaide
The Office of the National Rural Health Commissioner to be established in Adelaide
Department of Infrastructure, Regional Development and Cities Indian Ocean Territories from Canberra to Perth
Department of Infrastructure, Regional Development and Cities Inland Rail Unit from Canberra to Toowoomba in Queensland, Dubbo in New South Wales and Wodonga in Victoria.

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