BUDGET: IA gets big funding boost and more responsibilities

Infrastructure Australia will receive a significant funding boost and new responsibilities under plans unveiled in the Federal Budget

May 11, 2011

The Federal Government’s infrastructure investment advisor, Infrastructure Australia, will receive a significant funding boost and new responsibilities under plans unveiled in the Federal Budget.

Funding for Infrastructure Australia, which is chaired by transport guru Rod Eddington, will increase by almost 40 percent to $36 million over four years.

Minister for Infrastructure and Transport Anthony Albanese says the extra cash will allow the body to expand its work on giving policy advice on reforms such as the national port and freight strategies.

The Government says the extra money will also help Infrastructure Australia develop a deeper pipeline of priority infrastructure projects.

Along with the increase in funding, Infrastructure Australia will now be tasked with producing an enhanced list of priority infrastructure projects it believes should be funded.

The Government now wants it to focus on projects worth more than $100 million or those with national significance and value.

The Australian Logistics Council has praised the announcements, which include providing greater transparency by publishing Infrastructure Australia’s assessments of projects and cost-benefit analyses.

ALC CEO Michael Kilgariff says the funding increase should allow Infrastructure Australia to expand its responsibilities and play a key role in the development of projects.

"As ALC indicated when submitting its submission on the National Land Freight Strategy Discussion Paper, if properly funded, Infrastructure Australia could play the same role in infrastructure development as the Productivity Commission in relation to advice on economic policy. Poorly funded, it could be a roadblock," he says.

The changes coincide with government efforts to attract greater private investment in infrastructure projects through the introduction of new tax incentives.

"The Government will establish special tax provisions for infrastructure projects designated to be of national significance," A joint statement from Treasurer Wayne Swan and Albanese says.

"Losses generated by designated infrastructure projects will be exempt from the Continuity of Ownership Test and the Same Business Test and will be uplifted at the government bond rate."

A schedule will also be developed to provide information on major infrastructure construction across all levels of government, while federal, state and territory governments will work together to manage forecasting and patronage risk on projects such as toll roads.

New faces will be joining the Infrastructure Australia team, including Secretary of the Treasury Martin Parkinson, AustralianSuper Chair Elana Rubin and Roebourne Shire President Nicole Lockwood.

As part of its expanded role, Albanese wants Infrastructure Australia to update its analysis of infrastructure priorities against the seven priorities it identified in the 2008 audit. These include energy, water, rail freight, international gateways and cities.

Established in 2008, Infrastructure Australia was responsible for auditing the nation’s infrastructure and developing an annual priority list to inform government investment.

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