Setting the bar high: Expectations for infrastructure in the Federal Budget

Tuesday 9 May, 2017 | By: Default Admin | Tags: Federal Budget, infrastructure, nation building, Cross River Rail

All signs are pointing towards a Federal Budget which will significantly boost infrastructure investment, particularly in light of Treasurer Scott Morrison’s speech on “good debt” and “bad debt”.

While infrastructure investment is considered to be “good debt”, the conversation needs to shift from a year-on-year funding model to a long-term, sustainable funding model for nationally-significant projects.

Public infrastructure investment by the Federal Government, similar to spending by State Government, has varied over the years, which offers little confidence for businesses.

With no certainty around the amount of infrastructure investment each year, government spending in this space has been rapidly declining in Queensland since 2008-09.

This decrease in infrastructure spending has impacted almost all categories of infrastructure, mainly transport and utilities, with the exception of telecommunications, largely due to the privatisation of Telstra.

Where current infrastructure spend in Queensland is sitting at around $6 billion for 2016-17, this represents the lowest investment level since 2005-06.

Engineering graphicRightly so, Queensland businesses have called for greater investment into infrastructure as one of the top five priorities in tonight’s Budget.

With the Federal Government building up anticipation for a Federal Budget that will include a $50 billion infrastructure package, expectations among the business community are high.

This is in light of the pipeline of committed infrastructure work in Queensland being at its lowest level in a decade. Commencements for transport and utilities were especially weak compared to the average of the past decade. 

The main factors are to do with the downturn in the resources sector, tropical cyclone damage, the gold plating of our infrastructure, desalination plans and the completion of major roads projects such as upgrades across the state.

However, we believe Queensland may be at a potential turning point in the infrastructure cycle, shown by the uptick in 2015, with a number of projects moving through the pipeline and being announced.

construction graphicProjects that have progressed to the list of ‘priority projects’ in Infrastructure Australia’s 2017 Priority List certainly provided a boost of confidence for Queensland businesses. These projects, to which CCIQ will continue to advocate for, include:

•             Ipswich Motorway Rocklea–Darra

•             M1 Pacific Motorway – Gateway Motorway merge upgrade

•             Bruce Highway Upgrades (Cooroy to Curra Section C and Mackay Ring Road Stage 1)

•             M1 Pacific Motorway upgrade – Mudgeeraba to Varsity Lakes

•             Inland Rail (Melbourne to Brisbane via inland NSW)

•             Cross River Rail

•             Port of Brisbane dedicated freight rail connection

•             Preserve Corridor for East Coast High Speed Rail

We also know that the Beerburrum to Nambour rail upgrade project has moved through Building Queensland’s pipeline and should be accelerated in next year’s Infrastructure Australia’s Priority List.

Nevertheless, CCIQ will continue pressuring the Government and reminding it that despite growth in the Queensland economy, the share of public funding on infrastructure has declined to its lowest level since 1990. In investment per capita terms, spending has declined to the lowest levels in a decade.

public graphic

What businesses want is certainty around infrastructure investment, not the funding rollercoaster we have seen over the past few decades.

That’s why we are setting the bar high for tonight’s Federal Budget release and looking attentively for a long-term plan on sustaining an infrastructure pipeline - with funding attached.







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