Daniel Hurst 

Just 10% of new infrastructure funding in Australian budget to be delivered this year

Labor questions if Morrison government is getting stimulus out the door quick enough
  
  

File photo of the Darlington roads project in Adelaide
Of the $6.7bn in newly budgeted infrastructure investment over the next four years, just $653m is allocated in 2020-21, budget papers show. File photo of the Darlington roads project in Adelaide. Photograph: David Mariuz/AAP

The Morrison government has earmarked $6.7bn in new infrastructure funding for the states and territories but just one-tenth of it will be delivered this financial year, budget papers show.

The figures have fuelled fresh concerns about whether the government is getting additional stimulus out the door quickly enough, while the Victorian premier, Daniel Andrews, has signalled he will push for more funding for projects in his state.

Of the $6.7bn in newly budgeted infrastructure investment for the states and territories over the next four years, just $653m, or 10%, is allocated in 2020-21, according to the government’s summary of key policy measures.

The level rises to $1.8bn, or 27%, in 2021-22, but most of the new funding comes later. Analysis suggests 35% of it arrives in 2022-23 and 28% in 2023-24.

The government has trumpeted the infrastructure funding under the banner of its “jobmaker” budget package, which also includes income tax cuts, youth hiring credits and business incentives in a bid to drag the Australian economy out of its first recession in nearly 30 years.

These figures reflect new funding contained in the budget on Tuesday evening, in addition to any previously announced and funded projects.

While this analysis doesn’t provide a full picture of every infrastructure development that may be under way or about to commence, it does show the commonwealth’s newly budgeted funding to states and territories is backloaded towards the end of the four-year cycle.

Labor’s infrastructure spokesperson, Catherine King, said the government needed to be judged on “how many projects it successfully delivers and how quickly it can get money out the door to circulate in the economy”.

“Even before this crisis, Labor, senior economists, industry leaders, state governments and the Reserve Bank of Australia were calling on Scott Morrison to invest in Australia’s infrastructure to get our struggling economy back on track,” King said on Wednesday.

“It’s good that Morrison has finally listened.”

King said there was need for caution on the latest announcements because the government had a record of underspending on infrastructure compared with what was initially earmarked.

“After delivering an average budget underspend of $1.2bn in each of their budgets, the Morrison government has a long way to go before we can be convinced these latest announcements will be enough to get our economy moving again and get Australians back to work,” she said.

Budget paper two suggests Victoria – which is currently charting a path out of restrictive lockdowns after getting the second wave under control – will receive $1.1bn of the newly budgeted infrastructure funding.

Asked if Victoria had missed out on adequate infrastructure funding from the commonwealth, Andrews said: “We’d always argue for more.”

The premier told reporters on Wednesday that Morrison was “always welcome to come and help me put a shovel in the ground”.

In addition to the state and territory infrastructure allocations totalling $6.7bn over four years, the federal budget also contains $1bn for road safety and upgrades around the nation this financial year and $1bn next financial year, which are clearly aimed at being rolled out quickly.

The treasurer, Josh Frydenberg, said the funding for these shovel-ready projects would be provided on a “use it or lose it basis”.

“If a state drags its feet, another state will get the money. We need works to start, not stall,” Frydenberg said in his budget speech.

Andrews signalled his displeasure with this approach on Wednesday, saying he did not believe partnerships worked well “when they begin with an ultimatum”.

“I think it’s better to find common ground and work together and that’s exactly what we’ve always done,” he said.

“And, look, to his credit, all the conversations I have with the prime minister … we focus on the things that we can do rather than quarrels about things that are well known and well understood, that we’re not going to get past.”

There is also an additional $500m for local roads and community infrastructure this financial year and $500m next year, aimed at helping local councils to upgrade roads, footpaths and street lighting.

The deputy prime minister, Michael McCormack, said the government was making a record investment of $110bn in infrastructure. This is a reference to the 10-year rolling program, much of which had been previously announced.

“This budget is one for infrastructure. It is one for the regions,” McCormack, the minister for infrastructure, told parliament.

He also tweeted that “our regions & infrastructure delivery will lead Australia’s economic recovery”.

The budget’s $2.7bn allocation for road and rail works in New South Wales includes just over $600m for the New England Highway for a project known as “Singleton Bypass and Bolivia Hill Upgrade”.

The former independent MP for New England Tony Windsor pointed out on Twitter that the former Gillard government first outlined its support for upgrading the area in the then treasurer Wayne Swan’s 2013 budget.

 

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