Infrastructure policy group IPA has welcomed increased road and rail commitments in last week’s Queensland budget, but has warned the state against a continued reliance on mining royalties and borrowing.
Queensland’s budget includes an additional $3 billion in infrastructure funding, bringing the state’s total planned spend to $32.1 billion on infrastructure over the next four years.
However the state’s Labor Government is maintaining its policy not to fund new projects by privatising mature assets, a process commonly referred to as ‘asset recycling’.
IPA, an industry ‘think tank’ which has welcomed asset recycling in other states, says the infrastructure big build in Queensland is being built on ‘shaky fiscal foundations’ without asset recycling.
“Infrastructure funding underpinned by volatile mining royalties and increased debt is not a long-term recipe for success,” IPA chief executive Adrian Dwyer said.
“If the Queensland Government wants to sustain high levels of infrastructure spending while keeping debt in check, they will have to come back to the table on reform and asset recycling.
“Without additional capital from asset recycling and wider reform, the Queensland Government will remain fiscally constrained in the face of a rapidly growing population.”