With the announcement of the Federal Budget comes the announcement of certainty for industries, businesses, individuals and families across Australia. With this year’s Budget coinciding with the calling of the upcoming election, there are more eyes on it than most.
A raft of funding announcements and promises to Australia’s broader transport sector are held within Treasurer Jim Chalmers’ fourth budget, from $17.1 billion in transport infrastructure upgrades and a $75 million divestment in the Hydrogen Highways scheme to the increase in decarbonisation incentives and energy bill relief for businesses across the country.
That $17.1 billion investment in the improvement of Australia’s transport infrastructure – much of which has been promised to road upgrades – has been broadly welcomed by those within the sector, including the nation’s peak body for roads, Roads Australia.
Within that $17.1 billion is $7.2 billion of funding awarded to safety upgrades on the Bruce Highway, over $2.3 billion for a host of upgrades across transport modes in Western Sydney, and $1.1 billion to support Western Freeway upgrades in Victoria.
Smaller commitments include $200 million to upgrade Tasmania’s Arthur Highway, $350 million for the Westport – Kwinana Freeway upgrades in Western Australia and an extra $200 million to ensure the delivery of the Rockhampton Ring Road in Queensland.
Roads Australia CEO Ehssan Veiszadeh is among those who have welcomed the significant investment to Australia’s transport system. He tells ATN the current procurement and design standards must be rectified in order to allow the variety of projects Roads Australia funds to get the most out of the budget allocations.
“It was good to see a $17.1 billion investment in transport infrastructure in the budget,” Veiszadeh says.
“We saw a significant funding announcement for the Bruce Highway in Queensland, along with an additional $1 billion to Victoria’s road blitz, $1.8 billion for the Western Sydney roads projects, $1 billion to preserve the corridor for the South West Sydney rail extension and $2 billion for transforming Sunshine Station to enable to Melbourne Airport Rail delivery.
“They’re all great announcements, but I think what we would really love to see in these budgets is for governments to embrace a strategy to tackle our waning productivity as an industry. As a nation, our productivity has not improved for 30 years.
“This is not an academic exercise. This is literal dollars that we are wasting year after year on easy wins that we can fix today, that should allow us to not delay or cancel projects.
“We know there are very easy wins in this space – the government knows, the industry knows.
“It includes everything from our ability to innovate, our ability to have a modern industrial relations (IR) arrangement to having workplaces that are safer for people, having procurement processes that make sense and having standards that don’t contradict each other across state lines.
“We need to have a national impetus to tackle this, and that is something we would like to see going forward and we’ll continue to call for that during this election campaign.”
A clear indication of Australia’s waning industrial productivity is illustrated in the OECD Compendium of Productivity Indicators 2024.
The OECD, otherwise known as the Organisation for Economic Co-operation and Development, presents a forum for knowledge, data and analysis for public policy in the aim to set international standards and support their implementation in the face of social, economic and environmental challenges.
Australia ranked 15th among OECD’s countries for labour productivity in 2022 and has since fallen to its lowest ever ranking of 16th according to Veiszadeh.
He says there needs to be greater collaboration among states and a push by the federal government to foster an improvement in productivity.
“Right now, Australia ranks 16th in the OECD for productivity, and that’s our lowest in 16 years,” he says.
“It’s a really multi-layered issue with many, many different angles to it. If we just focus on what our industry contends with for clients across the country in terms of standards and technical requirements, some of our members who operate internationally say to us that they have more certainty across international borders than they do across stakeholders in Australia in terms of what’s required across procurement, delivery, decarbonisation, and all those sorts of things.
“I think some of it is a historic hangover from the fact we’re a federation and have different states with their own rules and ways to deliver projects, but we can’t afford to do that anymore going forward.
“We know how fiscally constrained the environment is at the moment. We all know that. There are so many budget pressures and capacity challenges across the board that mean we can’t afford to accept it and say ‘that’s just how Australia works’.
“We work in one country, and our members, whether they’re consulting firms, construction firms, design firms, maintenance operators, most of them operate across the country.
“I think the push for a really nationalised and standardised approach to infrastructure.
“Australia has done some really good work around market capacity, analysing what markets are hot and allowing the market and client side of the equation to better plan their pipelines.
“We need to give credit to there, but across the board those more technical things like the technical standards and procurement models and encouraging collaboration, we should really set a national approach to that where possible.”
He says one key difference in this Budget announcement has been the way in which this $17.1 billion of transport infrastructure upgrades has been announced.
Rather than a stiff and regimented approach regarding specific timelines and regions, flexibility has been given to states to collaborate with stakeholders, assess where the funds would do the most good, and allocate somewhat accordingly.
This stark departure from the more regimented method that has become preferred in recent years has indicated, Veiszadeh says, a step towards breaking down the bureaucracy that often plagues these projects.
“The positive perspective is this federal government in this particular round of allocating money to the states, particularly here in Queensland with the Bruce Highway, is significantly different from previous rounds,” he says.
“The previous regime was very prescriptive with the scope in that you must deliver ‘x’ by this time, with this particular part to be completed before that one.
“While that sounds like better discipline, it actually led to scope creep and delays for the states, whereas this time around the federal government is taking a much more strategic approach to say ‘here are our strategic objectives for this funding. You, the states, are the experts in delivering this, you’re responsible for delivering this, go and do the work with the industry’.
“That’s why you now see TMR spending so much time with consulting and engaging with industry early to ensure the sequencing of work is done well.
“There is something to be said about how prescriptive we’ve been in the past about timelines, and the electorate expects you to give as much information as possible about these projects around when they’re due to be delivered, but often you don’t really know and you don’t have the answers until you’ve done the work and the planning.”
That key word, ‘planning’, is incredibly present in the Budget’s infrastructure project announcements, and it pertains to the construction and delivery of these projects.
Veiszadeh says funding for appropriate planning is imperative.
“In the Budget there was quite a lot of funding for planning that is absolutely crucial,” he says. “If you don’t get the planning done properly, you’re not going to get the projects done well. If that planning is done well and you’ve got the answers, then you can proceed with delivering the project effectively.
“The Brisbane Olympic Games is a good example of this. There’s three and a bit years of testing around where the new stadiums and infrastructure might be.
“Some might say that’s wasted time, but I would argue ventilating some of those ideas is important, and the planning phase is so pivotal so that when you get to the delivery phase, the scope is clear and it’s easy to go forth and deal with certainty.”
In an election year though, where there is a budget there is a counter-budget released by the opposition, and the Coalition’s plan to halve the existing fuel excise for 12 months at a cost of $6 billion has already been released as a major rebuttal to Labor’s proposed tax cuts as they pertain to cost of living relief.
As a result, NatRoad has called for Fuel Tax Credits to remain during any temporary reduction in the fuel excise to ensure all road users can feel the benefits.
The current Fuel Tax Credit for heavy vehicles on public roads is 20.3 cents per litre (until June 30, 2025). The reduction of the fuel excise from 50.8 cents per litre to 25.4 cents per litre will see a reduction of just 5.1 cents per litre for heavy vehicles should the tax credits be cut.
“Under the former Coalition Government, the decision to halve fuel excise also meant the suspension of Fuel Tax Credits. This wiped out the benefits of the tax cut, throwing cashflow for small road freight businesses into crisis,” NatRoad CEO Warren Clark says.
“We welcomed the restoration of Fuel Tax Credits under Labor back in 2022. The Coalition must now commit to protecting Fuel Tax Credits in full.
“Small trucking businesses lack the economic bargaining power to simply pass on higher costs. Fuel Tax Credits have a heavy impact on cashflow management.
“Unless Fuel Tax Credits are protected for the duration of the policy, the benefits of lower excise will not flow on to small trucking businesses. Instead, many in the industry that keeps Australia’s shelves supplied could face financial ruin.”
Veiszadeh adds any cuts to the fuel excise should be carefully considered, as the funds raised through it are often put back into Australia’s road transport system.
“A significant portion of the revenue collected from the fuel excise funds the maintenance of our roads,” he says. “Right now, we have a critical situation with the maintenance of our roads, let alone the resilience.
“We have quite a dire situation with climate risks, wear and tear, potholes and flooding.
“I would be quite concerned if any funding was reduced in that space.”
With the federal election officially being called on the morning of March 28, the road transport sector – like the rest of Australia – now has a modicum more certainty of what the nation’s immediate future looks like.
Australians will flock to the polls to cast their votes on May 3, 2025, in what Anthony Albanese is labelling a battle between Labor’s promise to “keep building” against the Coalition’s “promises to cut”, and what Peter Dutton is labelling as a plan to “get Australia back on track” after three years of Labor leadership. Time will tell on what this election will mean for Australia’s transport industry.
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