Coalition pins investment hopes on $11.6b spend

The Age: Coalition pins investment hopes on $11.6b spend. May 14, 2014. James Massola. Political correspondent

“You don’t create a new project by having a new name for an old project”: Labor infrastructure spokesman Anthony Albanese. Photo: Janie Barrett

The federal government has unveiled an $11.6 billion transport infrastructure package that will take total federal spending to $50 billion by 2019-20.

The Coalition argues investment will, in turn, spur state and private-sector investment in roads and rail and could spur up to $125 billion total investment by 2019-20.

On Thursday last week, Fairfax Media revealed the government’s plans for an asset recycling fund in the budget, which will be handed $5 billion to encourage states and territories to privatise assets by offering a 15 per cent bonus payment from Canberra.

“This spending is part of an economic strategy to build a strong, prosperous economy”: Treasurer Joe Hockey. Photo: Alex Ellinghausen

The money for that fund will be from the sale of Medibank Private and by rolling in money from the ending Building Australia Fund and Education Investment Fund.

Another $3.7 billion will be used to accelerate already announced Coalition projects such as $1.5 billion for stage two of the East West Link road in Melbourne and $866 million for the Perth Freight Link.

Other projects that will be fast-tracked include the Toowoomba second range crossing in Queensland, the North-South Road in Adelaide, upgrades for roads in the Northern Territory and more money for highway and black spot upgrades. A separate $2.9 billion package for a western Sydney infrastructure plan that links in to the development of the second Sydney airport takes the total package to $11.6 billion.

Treasurer Joe Hockey said the plan was the biggest infrastructure program in Australia’s history and would ”strengthen the economy, ease congestion, cut travel times and create thousands of new jobs”.

”This spending is part of an economic strategy to build a strong, prosperous economy and a safe and secure Australia,” Mr Hockey said. ”Proceeds from the sale of existing assets will be recycled into new productivity-enhancing infrastructure as well as expedite nationally significant projects across the country.”

The asset recycling fund would unblock productivity bottlenecks, reduce business costs and leverage nearly $40 billion in infrastructure investment.

In February, Infrastructure Minister Warren Truss announced the government would adopt many of the former government’s infrastructure projects, such as a $6.7 billion spend on the Bruce Highway in Queensland and $5.6 billion on the duplication of the Pacific Highway in NSW.

But Labor will be expected to use the release of the budget to build its argument that the government has inflated its claims about infrastructure spending and is claiming credit for up to $35 billion worth of projects put in place by the former government.

Since the September election, the Coalition has claimed credit for about 20 road and rail projects worth more than $12 billion that had already been funded by Labor in the 2012-13 or earlier budgets by sending out announcements trumpeting the government’s commitment to existing projects.

On Monday, Labor infrastructure spokesman Anthony Albanese said the government was re-announcing projects while cutting public transport funding.

”You don’t create a new project by having a new name for an old project,” he said.

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