To the nation?s relief, Australia is out of electioneering mode (the campaign unofficially began in January!) and a new federal government is in charge.
The Coalition?s return to federal power after six years has reportedly provided a fillip to business confidence after disenchantment with the Labor Party?s policies.
The election of the Abbott Government is potentially good news for the quarrying and construction sectors, with commercial construction at its lowest ebb in over three years.
Prime Minister Tony Abbott has said that he wants to be ?Mr Infrastructure? and the Coalition during the campaign committed to spending over $20 billion in new or upgraded infrastructure projects, including almost $5 billion of additional funding over the forward estimates on key projects.
The new government has committed to fund at least one major road project in each state: $6.7 billion on Queensland?s Bruce Highway and $1 billion to support Brisbane?s Gateway Motorway upgrade; $1.5 billion each to kick-start Melbourne?s East West Link and Sydney?s WestConnex project; $405 million for the Sydney F3 to M2 link; $500 million to upgrade Adelaide?s North-South Road Corridor; $400 million to upgrade Tasmania?s Midland Highway; $615 million on the Swan Valley Bypass on the Perth to Darwin Highway; $686 million on the Perth Gateway project; and $5.6 billion to complete the duplication of the Pacific Highway from Newcastle to the Queensland border.
This is encouraging for the quarry industry as the mining investment pipeline eases. However, it is contingent on federal and state governments generating conditions through policy that will facilitate an infrastructure boom and on businesses being more optimistic about an economy with a AAA global credit rating.
The fiscal policies of past federal and state governments have notoriously detracted from growth and recent public/private partnerships (eg Brisbane?s airport toll road and Clem 7 projects and Sydney?s Lane Cove and Cross City tunnels) have left taxpayers footing the bill. Business has also dented its own confidence by sitting idle in the last few years.
During the election campaign Consult Australia, which represents consulting firms in the built environment, urged the incoming government to consider new funding mechanisms and better value for investments in infrastructure and urban renewal.
Even Infrastructure Australia, which approves and allocates infrastructure funding for major projects, has urged state and federal governments to consider the major infrastructure challenges for the next 50 years.
As Consult Australia CEO Megan Motto remarked of both major political parties? infrastructure platforms in the recent campaign: ?With both sides only able to give mixed commitments to different projects, we again face a politicised list of projects, with no real innovation in funding to support it. The major parties must move beyond the patchwork of grants and look at alternate policies.?
The new government must take a visionary approach to infrastructure. It also faces challenges to repeal the previous government?s carbon tax. Labor and the Greens in the Senate will block legislation before the changeover in the Upper House in July 2014. Even then the Abbott Government will have to satisfy the demands of several minor right-wing parties before it can overturn that big bogey. Until that occurs, business is really no better off than it was before the election.
With its election, the Abbott Government has announced to the world that Australia ?is once again open for business?. It?s time for large and small businesses alike across the board (including quarry operators and suppliers) to back up that mantra after spending the last nine months awaiting the election outcome.
It?s still going to be at least another 18 months before the new government?s policies take effect and businesses cannot afford to sit idle.
With forecasters suggesting the national economy is set to improve in the next few years, businesses should ready themselves now for when things do improve rather than waiting on (frankly) unreliable federal and state legislatures to make something happen.