Despite the Government trumpeting the Building Australia Fund as a means of investing in critical infrastructure projects, it is not
Despite the Government trumpeting the Building Australia Fund as a means of investing in critical infrastructure projects, it is not certain how much of the $20 billion in the fund will be used to construct road, rail and port projects.
The details of the fund remain unclear, with the Government giving no specific date as to when the governance arrangements will be finalised. There are questions mounting as to how the fund will operate in terms of management and whether it will be independent as well as bound by select criteria when determining whether to use funds to invest in infrastructure projects.
All that has been confirmed is the fund will not be running for at least another six months while money will not be allocated until the 2009-10 financial year. Although Infrastructure Australia will be responsible for developing a list of priorities for funds to be spent on, there is no guarantee the Government will follow through on the recommendations.
The Opposition has launched a scathing attack on the fund, criticising the Government of gambling with Australia’s money because it is uncertain if the fund will deliver substantial economic gains.
“How can the Rudd Government seriously propose to put $20 billion of Australians’ savings into an infrastructure fund without any indication of what kind of economic return the fund will be expected to deliver?”, shadow treasurer Malcolm Turnbull says.
“Australian taxpayers are entitled to question whether this will just be a Labor slush fund to subsidise the inefficient water, transport and energy infrastructure of state Governments,” he says.
While welcoming investment in critical infrastructure projects, Australian Road Train Association Chief Executive Duncan Bremner questions what benefits the industry will receive under the Building Australia Fund.
“It’s not difficult to interpret the Budget with an element of cynicism when… the rollout is delayed and the details are scant,” he says.
But the pressure will be on the Government to deliver for the transport industry, with the Australian Trucking Association (ATA) already calling for part of the $20 billion to be spent on removing regulatory bottlenecks. ATA chairman Trevor Martyn says the money needs to be used “to help persuade” the states to remove red tape that comes with crossing borders.
But the trucking industry will need to compete for a share of the funds, of which almost $5 billion is already in the process of being siphoned into communications and congestion projects. The Government will spend $4.7 billion to build its broadband network while $75 million will be handed to the states to undertake studies into determining ways of developing projects to reduce traffic congestion.
In handing down the Government’s first budget, Swan announced the Building Australia Fund will be used to build transport and communications infrastructure states or private companies cannot deliver.
One such project which may fall under the fund may be Sir Rod Eddington’s Investing in Transport study which called for $18 billion to fund new road and rail links across Melbourne. According to Eddington, the Victorian Government alone will not be able to fund such an ambitious project.