Budget 2017: federal infrastructure spending queried

SARTA and IPA question priorities but NFF loves Inland Rail cash

Budget 2017: federal infrastructure spending queried
Steve Shearer says SA has been dudded


While much has been made of the federal Budget’s focus on infrastructure, questions are being asked about unevenness in total and specifically for South Australia.

The state, which already has prickly relationship intergovernmental relations with Canberra, has seen ire raised on the freight front already and that has been amplified by the South Australia Road Transport Association (SARTA), which sees the state Liberal opposition’s chances at next year’s being sacrificed.  

SARTA believes that, despite a promise and commitment by the federal  government to fund completion of the crucial Northern Connector within 10 years, "the failure to provide any new funding for that project, or any other SA infrastructure project, means that the Northern Connector project will not be completed.

"They have not even gestured at a pretence of honouring their ongoing commitment to the Northern Connector."

SARTA executive director Steve Shearer points to pending harm to the state economy of growing congestion in Adelaide’s freight routes.

"The claim by the federal government … that the case for the next components of the Northern Connector project has not been made is simply farcical … because they accepted the entire project proposal before funding the initial stages and they have been provided with everything required regarding designs, business cases and cost-benefit analysis, something which can’t be said for all major projects funded in Western Australia, Queensland and New South Wales," Shearer says.

"This appears to be a cold and simple case of the federal government dumping SA and saying that SA does not count; especially when compared with the massive infrastructure funding allocated to other states."

Meanwhile, according think tank Infrastructure Partnerships Australia (IPA), the federal Budget cuts real infrastructure by $7.4 billion compared with the 10 year average, and sees Commonwealth funding at its lowest level since the early 2000s.

"This budget cuts federal infrastructure funding by $7.4 billion over the forward estimates and sees infrastructure funding at its lowest level in more than 10 years," IPA chief executive Brendan Lyon says.

"Real funding matters because state governments and companies cannot build projects or employ a workforce for projects beyond the Budget’s forward estimates, which are several federal elections in the future."

Lyon critiques Canberra’s commitment to a long-term and predictable budget funding stream, saying there needs to be a decade average of about $6 billion a year to fund the more than 100 national priority projects sitting idle on Infrastructure Australia’s list.

"States need to provide Infrastructure Australia with better levels of detail about their projects, but it would be a much stronger incentive if they could see a long-term, stable and real funding stream," he says.

"Beyond Western Sydney Airport and Inland Rail, federal government ‘equity’ and federal government project ‘loans’ can’t help, because they can never be repaid.

"Everyone from the Productivity Commission to Infrastructure Australia have found that public infrastructure like passenger railways, highways and most motorways need government budget grants or subsidies, because they cost more than they can earn.

"If infrastructure projects were commercially feasible without government funding, they would already have been done by increasingly desperate state governments.

"The federal government has a hard job to balance its books and fix flagging productivity, but we need to be transparent about the problems and the solutions because Australia is fresh out of easy answers."

More positive was the response from farmers on the promised $8.4 billion Inland Rail spend.

National Farmers Federation (NFF) president Fiona Simson describes it as "the real crown jewel" of the budget for the farm sector.

"The government says coupled with private sector participation, this funding will see the project through to completion in 2024-25," Simson says.

"This is a significant investment in the efficiency of our industry, better connecting our farms with new markets here and overseas."

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