The industry body says the budget’s freight funding is good but slams the fuel excise cuts
Industry think tank Infrastructure Partnerships Australia says this week’s Federal budget delivers the good, the bad and the ugly on infrastructure for the nation.
Infrastructure Partnerships Australia (IPA) says ahead of the upcoming election in May, the budget is a mix of both good and bad for the infrastructure industry.
“We welcome the significant $9 billion increase in funding for infrastructure, lifting total spending to $66 billion over the next four years,” IPA CEO Adrian Dwyer says.
“This is a substantial 16 per cent increase on last year’s Federal budget allocation to infrastructure, which was already at a historic high.”
The IPA points to a focus on freight in Victoria as a prime example of the Federal budget delivering positively to the industry, as well as planned faster rail works in New South Wales and Queensland.
“Our freight sector plays a vital role in keeping Australia’s economy moving, so it is essential we have the infrastructure in place to make rail freight a preferred long-haul mode over the longer term,” Dwyer says.
However, the IPA says despite these positives in infrastructure funding, there is still taxpayer money “chasing sub-economic projects in this budget”.
“The Federal government must get out of the habit of allocating money for projects that have limited evidence of taxpayer value and little to no proper planning,” Dwyer says.
“The shine has been taken off the good infrastructure commitments in this budget by the decision to cut fuel excise in half for the next six months.”
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The IPA describes the temporary halving of the fuel excise as “poor policy, plain and simple”, saying it will reduce receipts by almost $6 billion with a net impact to the budget of around $3 billion.
It also says the cutting of the fuel excise sends the wrong signals about the types of cars the government wants people to drive and will make no different at the bowser.
“With volatile prices, any cut you make to fuel excise is likely to be chewed up in the next price rise at the pumps,” Dwyer says.
“Instead of tinkering at the margins on fuel excise, the government would be far better placed using its funding power to encourage states and territories to follow the lead of Victoria, NSW and South Australia and apply a road user charge on electric vehicles.”