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In the recent budget, the Morrison Government pledged to spend $100 billion on road and rail infrastructure in the next decade.
In the recent budget, the Morrison Government pledged to spend $100 billion on road and rail infrastructure in the next decade.

Infrastructure, training big winners in budget

With Australia in election campaign overdrive, the Federal Government has pledged to build more infrastructure and overhaul vocational training as part of its plan to strengthen the Australian economy.

“A strong economy needs ongoing investment in roads, rail, bridges, dams and ports,” Treasurer Josh Frydenberg told parliament in his budget speech on 2 April.

“Tonight, I can announce that the Coalition Government is boosting our infrastructure spending to $100 billion over the decade.”

Of that $100 billion, around $42 billion is to be spent over the next four years. And of that 10-year total, $13.5 billion is drawn from (off budget) equity loans and $4.1 billion from contingent liabilities.

The Coalition announced it would increase the Urban Congestion Fund from $1 billion to $4 billion. It will also include a $500 million Commuter Car Park Fund aimed at improving access to public transport hubs and taking tens of thousands of cars off the roads.



“A strong economy needs ongoing investment in roads, rail, bridges, dams and ports.”
Josh Frydenberg, treasurer

The state-by-state breakdown of transport upgrades for road and rail includes $7.3 billion for New South Wales, $4 billion for Queensland, $6.2 billion for Victoria, $622 million for the Northern Territory, $1.6 billion for Western Australia, $2.6 billion for South Australia, $313 million for Tasmania and $50 million for the ACT.

In his budget reply speech on 4 April, Opposition leader Bill Shorten said the big difference between the government and opposition parties is on infrastructure. He listed numerous other projects that did not receive funding in the budget papers (see boxout below for the projects that were listed).

“Labor has transport plans and projects ready to go in every state and territory: cross-river rail in Brisbane; Western Sydney Metro; suburban rail loop in Melbourne; the Bridgewater bridge in Tassie; South Road in South Australia; MetroNet in Perth; upgrading the roads around Kakadu; and phase two of the ACT light rail,” Shorten said.

Ken Slattery, the chief executive officer of peak industry group Cement Concrete & Aggregates Australia (CCAA), told Quarry the CCAA welcomed the 2019 federal budget “as a generally positive and responsible approach to the issues facing Australia’s economy”.

“On the positive side,” Slattery said, “the return to budget surplus is a very welcome sign of government expenditure being brought back under control. This, coupled with planned reductions in taxation will help restore consumer confidence.

“We particularly welcome the government’s commitment to increased infrastructure spending with meaningful investments in rail capacity development and growing productivity that will provide welcome opportunities for the heavy construction materials industry.”

Slattery cautioned, however, that as “positive as these initiatives may be, they may not be enough to compensate for the impact of the previously announced cuts to immigration levels which will put further pressure on an already weakened housing market”.

The Federal Government recently announced that the annual migration intake of permanent migrants would be reduced from 190,000 to 160,000 in the 2019-20 financial year.

Vocational training

In his budget speech, Frydenberg announced a $525 million skills package to overhaul the Vocational Education and Training (VET) system.

The Federal Government pledged to create 80,000 new apprenticeships in areas where there are skills shortages by 2024.

“We need to ensure all Australians of all ages have the skills they need for the jobs of today and the jobs of tomorrow,” Frydenberg said.

The Coalition committed about $132.5 million over four years for the establishment of a new National Skills Commission, which would be tasked with delivering long-term reform to the VET sector and training new “skills organisations” in areas of “future job growth”.

Slattery said the CCAA also welcomed “the significant boost to investment in vocational education and training which is a vital underpinning to economic growth in the future”.

His position was echoed by the Australian Resources and Energy Group (AMMA), which welcomed increased funding for TAFE, VET and other training initiatives.

“To underpin further resources and energy earnings growth, more investment and more industry/government collaboration is required to address skills shortages and better meet the future needs of employers and the wider industry,” AMMA’s operations director Tara Diamond said.

“AMMA and our members are pleased the Government has recognised in the 2019 federal budget the need to work with industry on education and training systems to deliver a future pipeline of home-grown skills.”

Instant asset write-off

The Federal Government has expanded the instant asset write-off to businesses with a turnover of up to $50 million. It has also proposed a cap increase from the legislated $20,000 to $30,000.

“This will cover an additional 22,000 businesses, employing 1.7 million Australians. Already more than 350,000 businesses have taken up the instant asset write-off. And now, even more will have the chance to do so,” Frydenberg said.

The Labor opposition has pledged to support the policy in addition to promoting its plan for an Australian Investment Guarantee to enable companies to claim deductions of up to 20 per cent in the first year on investments in depreciable assets over $20,000.

 

Funding for key projects by state, territory

  • New South Wales, Victoria, South Australia – Princes Highway upgrades.
  • NSW – M1 Pacific Motorway extension to Raymond Terrace; M12 Motorway; Newell Highway upgrades; Hawkesbury River Third Crossing; and the Western Sydney North South Rail Link (Stage 1).
  • Victoria – Geelong Fast Rail; South Geelong to Waurn Ponds rail upgrade; roads upgrades to 13 arterial roads in Melbourne’s north and southeastern suburbs; completion of duplication works on the Western Highway between Ballarat and Stawell; sealing of the Dandenong Ranges and surrounds; and completion of Stage 1 of the Goulburn Valley Highway to Shepparton Bypass.
  • Queensland – Bracken Ridge to Pine River extension of the Gateway Motorway; M1 Pacific Motorway upgrade program from Daisy Hill to the Logan Motorway; the Warrego Highway; Cairns Ring Road; and the Gladstone Port Access Road extension.
  • SA – North-South Corridor future priorities; and SA Rural Roads package.
  • Western Australia – Oats Street/Welshpool Road/Mint Street level crossing removal; Albany Ring Road; Tonkin Highway (including Stage 3 extension, interchanges and highway gap); Fremantle Traffic Bridge (Swan River Crossing); and Stages 2 and 3 of the Bunbury Outer Ring Road.
  • Tasmania: Tasmanian freight rail revitalisation program – Tranche 3.
  • ACT: Kings Highway Corridor; and William Slim Drive duplication.
  • Northern Territory: Tiwi Islands roads upgrades.

 

Further information about these projects and funding is available at the Department of Infrastructure, Regional Development and Cities website.

 

IMAGE GALLERY

Treasurer Josh Frydenberg (left) and Finance Minister Mathias Cormann on budget night.
Treasurer Josh Frydenberg (left) and Finance Minister Mathias Cormann on budget night.


 

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