Freight Rail, Passenger Rail

Infrastructure spending debate heats up

Airport. Photo: Department of Infrastructure and Regional Development

Urban infrastructure minister Paul Fletcher has defended the Turnbull Government’s infrastructure program, amid claims the 2017 Budget cuts real infrastructure funding by $7.4 billion.

Analysis from industry body Infrastructure Partnerships Australia suggests the latest Budget cuts real infrastructure spending over the forward estimates by $7.4 billion compared to the 10-year average, dropping Commonwealth funding to its lowest level since the early 2000s.

“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,” IPA boss Brendan Lyon said.

“The Commonwealth must commit to a long-term and predictable budget funding stream at the decade average of circa $6 billion per year and use that money to fund the more-than 100 national priority projects sitting idle on Infrastructure Australia’s list.”

Lyon recognised the direction to State Governments to provide the Commonwealth with detailed business cases, but said the Federal Government needed to provide “a long-term, stable and real funding stream” to boost confidence.

“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,” he said.

Shadow minister for infrastructure Anthony Albanese latched onto the IPA analysis, asking for an explanation from the Government during Question Time on Wednesday.

“[IPA] have said the Budget cuts real budgeted capital funding to its lowest level in more than a decade, using a mix of underspend, reprofiling and narrative to cover this substantial drop in real capital expenditure,” he suggested.

Minister Fletcher rejected the analysis, saying it was flawed to ignore the equity investments the Government was making in Inland Rail and the Western Sydney Airport.

“Misleading claims made by Mr Albanese and others focus on one component of the infrastructure spend, Payments to Support State Infrastructure Services,” he said.

“This is part of, but not the same thing as total infrastructure spending. The numbers are clear—under this budget, the Coalition is investing on average $2.1 billion more per year than Labor.”

Fletcher said a $5.3 billion equity commitment for a Government Business Enterprise to build and operate the Western Sydney Airport, and an $8.4 billion equity commitment to the ARTC for Inland Rail end “decades of indecision”.

“Our commitment of equity to these two projects reflects a clear and deliberate shift in the way the Turnbull Government is funding and financing major, nation-building pieces of infrastructure, with a greater use of equity and loans.”