Federal treasurer Scott Morrison reportedly plans to allocate Federal Budget funding to transport projects in states that engage with the controversial Asset Recycling Fund set by the former Abbott Government.
According to an interview with The Australian, the treasurer, who will deliver the Federal Budget on Tuesday night, plans to bring a “sharper economic focus” to the national infrastructure plan, which will include funding projects like the Melbourne Metro, the Sydney Metro, Perth’s airport railway and a light rail network in Sydney’s west.
To do this Morrison plans to lean on the Asset Recycling Fund, set up by Tony Abbott’s treasurer, Joe Hockey.
The Asset Recycling Fund gives federal money to states when they sell public assets like ports and other infrastructure in order to fund major projects.
It has been criticised by opponents for essentially forcing states to privatise significant assets if they want to build critical infrastructure.
But according to The Australian, Morrison believes this influence over state policy to be one of the benefits of the controversial approach.
“What I think the asset recycling initiative has demonstrated is we cannot only focus the state spend but we can also leverage the way that they manage their own assets to achieve that, not just to invest in the projects they invest in,” Morrison was quoted by The Australian on Monday.
“So you’re getting a multiple dividend there from fiscal and financial policy at a state level as well as the economic outcomes of the infrastructure.”
The Australian’s exclusive report suggests this year’s infrastructure budget funding will therefore go to states who have shown they will willingly privatise major infrastructure to fund new work.
According to The Australian, the budget will include $2.19 billion for NSW projects, including $1.7 billion for the Sydney Metro project and $78.3 million for the Parramatta Light Rail project.
Victoria is tipped to get $877.5 million for the Metro Tunnel project, while more spending on Victorian roads is likely to push the state’s total federal infrastructure spend to $2.4 billion.
Perth’s Forrestfield-Airport Link is also tipped to get funding.
But there are no projects listed by The Australian for South Australia, and Queensland’s only listing is funding for the Ipswich Motorway.
Queensland treasurer Curtis Pitt was angered by the news, saying his state was being mistreated.
Pitt warned Morrison – a New South Wales representative – to “short-change” those north of the border at his own risk.
“If NSW and Victoria receive the lion’s share of a suggested $5 billion for public transport infrastructure in the Federal Budget, then Queenslanders will have every right to feel drastically short-changed,” Pitt said on Monday.
“On population share alone we would expect $1 billion of that amount and we have an essential major project in Cross River Rail that should be supported.”
Pitt’s Labor Party, led by Annastacia Palaszczuk, won the 2015 state election after the previous Coalition Government vowed to sell off major infrastructure if they were re-elected.
The election was thus positioned by Labor as a referendum on asset sales, with the Queensland people voting against them by voting Palaszczuk into power.
“Voters spoke clearly at the January 2015 state election on asset sales,” Pitt said.
“If the Budget allocations for infrastructure are to reward states engaging in asset sales, then Queensland voters will make their views known at the coming federal poll.
“Queensland should not be penalised for the simple fact that the Palaszczuk Government is keeping its election commitment not to sell our revenue-generating government-owned corporations.
“Scott Morrison has a clear choice — either he allocates a fair share of federal infrastructure funds to Queensland in tomorrow night’s Federal Budget or he abandons our state.”
Australian Greens senator Janet Rice also criticised the news.
“It is disappointing that funding public transport is being made in exchange for the privatisation of vital public assets,” Rice said on Monday.
“After years of neglect of our public transport networks, something is better than nothing, but this budget measure would be no different from what Tony Abbott was proposing as Prime Minister.”