In the 2013-14 Budget, the Federal Government has promised to invest a further $24 billion on roads, rail and ports from 2014-15 to 2018-19. The eastern States are the big infrastructure winners in the Budget, with over $10 billion in funding for road and rail projects in Queensland, NSW and Victoria. Western Australia, South Australia and Tasmania also received significant funding commitments.
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The Federal Government has clearly prioritised funding to projects identified as “ready to proceed” in Infrastructure Australia’s 2012 infrastructure priority list. Interestingly, the Federal Labor Government has not provided funding for two key projects in Victoria and NSW which the Coalition State Governments and Federal opposition have committed to fund. Perhaps the most significant of these is the East West Link Project, which the Victorian State Government prioritised in its budget last week (above Melbourne Metro Project Stage 1, which the Federal Government is funding).
New infrastructure funding commitments
Below is summary of the most significant new infrastructure funding commitments.
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What key projects missed out?
East West Link, Victoria (estimated cost of $6 to 8 billion) – The Federal Government has provided no funding for this project, despite the State Government’s commitment to build it and recent funding of $294 million. The Federal Government has clearly prioritised Melbourne Metro Stage 1 over East West Link, consistent with Infrastructure Australia’s 2012 priority list. Notably, the Federal opposition has promised $1.5 billion in funding for East West Link. Time will tell if the Federal opposition increases that funding commitment and also promises funds for Melbourne Metro Stage 1.
Pacific Highway Corridor Upgrades, NSW (estimated cost of $6.4 billion) – This is the only project identified by Infrastructure Australia as “ready to proceed” in 2012 which has not received Federal funding. To the contrary, the Federal opposition has promised to fund 80% of the cost of the project.
WestConnex, NSW – While the Federal Government has provided $1.8 billion for this project, the preconditions may effectively mean these funds will never become available. The preconditions include ensuring that the road connects directly to the city and Port Botany and that new tolls are not imposed on existing un-tolled roads. The NSW Treasurer has been reported as saying that the road would require tolls in order to proceed.
While many of the projects selected follow Infrastructure Australia’s 2012 infrastructure priority list, others funded are not included in that list. Further, not all the projects funded follow the priorities identified by the States themselves.
In the case of both the East West Link and WestConnex projects, the relevant State Governments will clearly need to rethink their funding models if they are to proceed with their own priorities over those of the Federal Government. Of course, given the Federal Coalition’s support for both of these key projects, that dilemma may not arise after 14 September 2013.