The Times Australia
The Times World News
The Times

Budget restraint? When it comes to transport projects, it's hard to find

  • Written by Marion Terrill, Transport and Cities Program Director, Grattan Institute
Budget restraint? When it comes to transport projects, it's hard to find

“Restraint” – that’s what Treasurer Jim Chalmers claimed as the watchword of Tuesday’s federal budget. Perhaps the claim can be made in general, but when it comes to transport infrastructure, the budget is remarkable not for how different it is to budgets past, but how similar. It has left plenty of opportunities for actual restraint for next time around, in May 2023.

The first similarity to budgets past is how much is being committed to transport infrastructure.

This year the total is about 0.6% of GDP, much like Josh Frydenberg’s budgets of the past three years. That equates to A$13.4 billion this year, rising to about A$15 billion for each of the next three years.

Chart showing level of transport spending in federal budgets, 2012 to 2022
Author provided What Frydenberg and Chalmers have in common is that they have presided over a big shift upwards in the total spend, from around 0.4% of GDP under their predecessors Scott Morrison, Joe Hockey and Wayne Swan. It’s hardly “restraint”. Headline numbers are inflated The second similarity to budgets past is the irresistible temptation to quote far bigger numbers than are actually committed in the budget. It’s all very well to say what you plan to deliver in ten years and beyond, but the budget is all about what you’re committing this year and the following three. It’s just like legislating stage 3 tax cuts in 2019; three years and a pandemic later, it’s hard to backtrack. The problem is exacerbated because the headline number includes projects already committed long ago. The claim in the budget glossy is that the Albanese government “is delivering on its election commitments as part of the more than $120 billion pipeline of investment in transport infrastructure over the next 10 years”. But what’s actually committed in the budget for additional road and rail is $8.1 billion of new money over ten years. Most of the eye-watering $120 billion predates this government. For example, New South Wales residents may applaud the promise to spend $300 million on western Sydney roads and $500 million on early works for high-speed rail, and a total NSW commitment of $1.4 billion over ten years. But it’s hard to square that with the infrastructure minister’s promises[1] of $5.25 billion for the Sydney Metro to Western Sydney Airport, and $1.6 billion for the M12 motorway. Similarly, Victorians may eagerly anticipate the $125 million for the Barwon Heads Road upgrade and $2.2 billion towards the Suburban Rail Loop. There’s a total commitment of $2.6 billion for the state over ten years. But how does that line up with the minister’s promises[2] of $5 billion for Melbourne Airport Rail, along with $448 million for Gippsland Rail? Infrastructure Australia bypassed The third similarity to budgets past is how projects are selected for funding. Prime Minister Anthony Albanese is proud of Infrastructure Australia. It’s the body he set up as infrastructure minister in the Rudd government to help elected representatives who, he said[3], struggled “with the need to take a long-term non-partisan view” of infrastructure. Yet this budget includes billions of dollars for projects that should have gone through an Infrastructure Australia assessment, but haven’t. The standout is Melbourne’s Suburban Rail Loop. It’s the signature project of the Andrews state government as it heads into a November election. The project was announced three months out from the previous Victorian election, and a business case wasn’t published until three years after the decision to invest. It’s very controversial. The state government claims[4] that building the east and north sections of the rail loop and operating them for 50 years will cost $31 billion to $51 billion. In stark contrast, the Victorian Parliamentary Budget Office calculates[5] it will cost $200 billion. What does Infrastructure Australia think? It considers[6] the project a very long way from investment-ready. Another standout is a $500 million down payment on high-speed rail. Even without a current business case, the government has declared[7] it is “absolutely committed” to the project. If the numbers run in 2013 were correct, this project will cost at least $130 billion, and will compete with the since-begun Western Sydney Airport. What does Infrastructure Australia think? Again, it considers[8] that even corridor preservation for the project is a long way from investment-ready. A third standout is $586 million to upgrade the Bruce Highway through Brisbane’s outer northern suburbs. The Bruce has had a massive program of upgrades over many years. Many sections have been assessed by Infrastructure Australia – but not this one. None of these decisions could be described as restrained, and there are many similar. Still waiting for rigorous assessments Of course, it’s not easy to inherit a swag of major projects from the previous government, many of which are begun or at least anticipated. And it’s to this government’s credit that it has moved $6.5 billion worth of these projects to beyond the budget forward estimates, in recognition that the engineering construction sector is already struggling to keep up with demand. But in this environment, it makes little sense for the government to have thrown its weight behind new commitments, such as east-coast high-speed rail and the Suburban Rail Loop, that will tie its hands for decades to come. Next time around, the treasurer should insist that each individual project up for funding consideration has been properly assessed by the government’s own independent advisory body. If the project is at too early a stage, the government shouldn’t invest public money in it. A more rigorous project-by-project assessment would help the government determine how much of the transport spend is really worth it. Let’s hope. When it comes to transport, restraint is hard to find. References^ promises (minister.infrastructure.gov.au)^ promises (minister.infrastructure.gov.au)^ he said (parlinfo.aph.gov.au)^ claims (bigbuild.vic.gov.au)^ calculates (pbo.vic.gov.au)^ considers (www.infrastructureaustralia.gov.au)^ declared (www.aph.gov.au)^ considers (www.infrastructureaustralia.gov.au)

Read more https://theconversation.com/budget-restraint-when-it-comes-to-transport-projects-its-hard-to-find-192848

Qantas engineers to stage nationwide walk-outs in escalation of wage dispute, impact to Monday’s peak-hour flights likely

More than a thousand Qantas engineers, fed up with management’s refusal to negotiate reasonable ...

Times Lifestyle

Warning to Grey Nomads - Pop Top Caravan Hidden Risks

To pop or not to pop… that is the question. Hybrid pop top caravans are a popular choice for many caravanners, but ar...

How to Ensure You Don’t Miss Out on a Ticket for the Next Huge Ev…

It can be a moment of huge excitement when a concert or huge event is announced to be coming to a nearby venue. There are l...

Coast of Gold Bursts into Australian Market with Award-Winning Sh…

An Australian brand centred on authentic West African flavours is making massive waves in the premium foods and condiment...

Times Magazine

Elevate Your Off-Road Experience with Ozzytyres’ 4x4 Wheel and Tyre Packages

The right wheel and tyre package can make all the difference between a thrilling adventure and a frustrating experience. An extensive range of high-quality 4x4 wheel and tyre packages from Ozzytyres can help you. They are designed to elevate your v...

What to Expect at Our Ultimate Indoor Golfing Venue in Rockingham

Here, dear gentlemen, is what the future of golfing looks like in Rockingham! This dream place for those who want to play golf in any weather or at any time of the day will become our ultimate indoor golfing venue. Envision a scenario where one is ...

The Power of Tech in Business and How Mobile Solutions are Changing the Game

Technology is not just an option but a necessity, particularly in today’s fast-paced business world. From mobile apps to cloud-based accounting software, businesses are now more tech-driven than ever. Whether you are running a small local operation...

Times Media

Times Men
Times Women
Times Health
Times Fashion & Beauty
The Rural Times
Times House & Garden

News Services

Times Traveller
The Business Times
Weekend Times
The Property Times
The Times
Times Food

Times Media

Times Driving
Modern Australian
Viw Magazine
New Magazine
Business Daily Media
The Bulletin