There is “good” and “bad” infrastructure as well as good and bad debt, Scott Morrison has said, in a further evolution of the government’s narrative on spending.
The treasurer made the comments on ABC radio on Monday to disavow the idea that debt to pay for infrastructure would be used for unproductive “pork-barrelling” projects.
Last week Morrison said the government would change the way debt was accounted for in the budget, to separate “good debt” from “bad debt”. The move was signposted in December and marks a radical shift from rhetoric in which senior Coalition figures have compared debt to cancer and a house on fire.
On Monday Morrison said the first dollars of government revenue should go to recurring expenses such as schools, hospitals and Medicare, but when money was borrowed it should go “towards projects which have a much longer timeframe for delivering [a] benefit”.
“Infrastructure is one of the most important things you can do for your national productivity.”
When the interviewer, Sabra Lane, noted that not all infrastructure made a good return for the public, Morrison agreed, saying “that’s true”.
“There’s good infrastructure and bad infrastructure, there’s no doubt about that as well,” he said.
Morrison said cost benefit analyses and the work of Infrastructure Australia were important in choosing the right projects.
“You’ve got to focus on the projects that give you the bang for the taxpayers’ buck, but, most of all, that grows the economy, which grows wages, which puts more in people’s pockets and reduces ultimately the cost pressures on their cost of living.”
Labor’s infrastructure spokesman, Anthony Albanese, has raised concerns that the government is sidelining Infrastructure Australia with the creation of a separate infrastructure financing unit in the Department of the Prime Minister and Cabinet.
On Friday Albanese told Lateline that the government should invest in public transport projects including the cross-river rail in Brisbane and the Melbourne metro.
“I have been arguing for a long period of time about productive infrastructure being an investment, not a cost,” he said. “But it has got to be for the right projects.”
He called for objectivity in the selection of projects.
Asked if the government would return the budget to surplus in 2020-21, Morrison said projections would be updated in next week’s budget.
“What’s important is that we continue to keep control over our current expenditure and that, at the same time, we do things that drive the economy forward,” he said.
On Monday Deloitte Access Economics projected the budget deficit for the 2016-17 financial year was likely to be $38.3bn, nearly $2bn worse than projected five months ago.
At a doorstop in Canberra, Morrison refused to comment on the projection but said the budget was about “making the right choices to support the Australian economy” including to pay for services and so that businesses can “support their incomes”.
Asked if the government would dump unlegislated “zombie measures” that had been blocked by the Senate, Morrison said the government had passed $25bn in savings since the last budget, about two-thirds of those it was seeking.
He said ratings agencies had kept Australia’s credit rating at triple-A in recognition of the fact the government “had been making substantial progress on our savings task”.
“Going forward into this budget, it is important the budget is a credible document, a practical document, it’s a document that can be put forward with confidence to the Australian parliament for support.”
Asked if universities could be more efficient, after reports the government would cut their funding with an “efficiency dividend”, Morrison said there was “capacity for the sector to deliver better value” because government funding had increased faster than per-student costs.
