Transport industry offers tacit approval for a range of federal budget measures
The Federal Government’s budget for the 2016 financial year has kept the promise of being low on surprises. Particularly in terms of infrastructure initiatives, most of the biggest spending items were announced prior to last night’s budget unveiling, and will carry forward into the new period.
These include the ongoing upgrade of the Bruce Highway in Queensland. Infrastructure minister Warren Truss says this ten-year plan is already providing benefits for transport operators, through reduced congestion and increased safety.
“These projects include major upgrades and realignments, strengthening and widening, and safety measures to target crash sites and provide additional overtaking lanes and rest areas. “It’s all aimed at improving the standard of this key corridor for Queensland,” he says.
The budget also includes allocations towards the Pacific Highway duplication project, which Truss says will be completed, as promised, by the end of the decade. “Upgrading the Pacific Highway has been in the works since 1996,” Truss says. “Our $5.64 billion investment over the five years to 2018-19 is making the dream a reality.”
Other infrastructure funding reaffirmed in the budget includes $405 million for the North Connex project in Sydney, $501 million for an upgrade of the Western Highway in Victoria; and $925 million for the Perth Freight Link.
The Government has also announced a concessional loan programme for projects that will further develop the Northern Australia region specifically. The $5 billion fund aims to encourage private sector investment in ports and railways, as well as pipelines and electricity generation.
Executive manager of national interest services with the ARRB Group Richard Yeo says the infrastructure spending is broadly appropriate. Giving the budget an overall seven out of 10 on behalf of the transport industry, he says it was “quite responsible” in terms of infrastructure investment.
“It’s a good balance – with a lot of spending in the pipeline,” he says.
However, he notes that further investment in transport systems research could ultimately further enhance the project spending announced. “We’d like to see that little bit of investment in research and development,” he tells ATN. “A few million in that space can ensure that they get the best value for the billions to be invested.”
Yeo is also concerned about the levels of road maintenance funding available from both federal and state governments. He says this is a less glamourous but equally important side of infrastructure spending, and can save billions in future years. He warns that a predicted El Nino-type weather pattern is set to cause drier weather in Australia in coming years, which may hide the visible effects of road deterioration until it is a much more expensive problem to fix.
“If you don’t maintain them in time, they deteriorate to the point of collapse,” he says.
The budget also provided a big win for small businesses in the road transport space, with a reduced company tax rate (to 28.5 per cent) for enterprises turning over less than $2 million a year. Small businesses will also be able to immediately claim the full cost of new assets (under $20,000 value) against their payable tax.
Australian Trucking Association (ATA) CEO Chris Melham says these measures will provide a much-needed shot in the arm for the vast majority of trucking businesses across the country.
“There are almost 49,000 trucking businesses in Australia. More than 45,000 come in under the $2 million turnover threshold announced by the government,” Melham says. “These small businesses operate on tight margins, and the ATA welcomes this reduction in their tax burden.”
The National Road Transport Association has also welcomed the changes, but believes a $5 million threshold would provide a more realistic definition of “small business”. CEO Warwick Ragg says the organisation also welcomes the overhaul of incentives for hiring older workers. Employers will be entitled to subsidies of up to $10,000 when taking on workers aged over 50.
“Importantly though, this incentive will need to be balanced by a recognition of the urgent need for reduction in red tape and unnecessarily onerous compliance and enforcement requirements that are driving many from the industry,” he adds.