The federal government is set to splurge more than $50.3 billion on road and rail investment over the next six years including $11.3 billion in new money as Tony Abbott attempts to deliver on his promise to be an ‘infrastructure Prime Minister’.
Unveiling the Federal Budget on Tuesday night, Treasurer Joe Hockey said the government would spend an aggregate of $50 billion on infrastructure over the next six years, including $35.1 billion over the four year forward estimates project.
Key areas of investment (six years) include:
- Sixty-one new and existing work packages improving safety under the 10 year Fix the Bruce Highway Plan ($6.7 million – though only $2.7 billion in next four years)
- Completing duplication of the Pacific Highway ($5.64 billion)
- Stage 1 and accelerated delivery of Stage 2 of Victoria’s East West Link ($3 billion)
- Upgrade of South Road between the Southern Expressway and Sturt Road in Adelaide to Expressway Standard under the North South Corridor in Adelaide ($944 million)
- Widening and upgrading interchanges on the Tonkin Highway and Leach Highway nearby Perth Airport under the Gateway WA program ($611.4 million).
- Upgrades to the Midland Highway in Tasmania ($400 million).
Around $2.5 billion will also be spent on repairs under the Roads to Recovery Program whilst $565 million will go toward the Black Spots program and $300 million will be spent upgrading and renewing bridges.
Hockey said the he expected the combined total federal, state and private investment on infrastructure to amount to $126.3 billion over the next six years, whilst work on the WestConnex Project in Sydney and East West Link Project in Melbourne (set to start before Christmas) alone would generate 16,000 construction jobs between them.
“These projects will mean real activity and real jobs in local communities” Hockey said in his speech.
“Shovels will start moving within a matter of months.”
The money comes as the government has embarked on a medium term path to fiscal recovery, which sees the budget deficit fall from $45.1 billion in 2013/14 to $25.9 billion over the next financial year and dropping to $1.0 billion by 2017/18.
Business lobby groups cautiously welcomed the infrastructure measures as well as broader steps to address fiscal imbalances, albeit with concerns being raised about a radical overhaul of business support programs and some changes regarding training support.
"The government has big fiscal ambitions for this budget and is backing them with decisive steps to put the budget on a firm long-term footing,” Australian Industry Group Chief Executive Officer Innes Willox said, adding that the commitment to new infrastructure addressed a deficit of spending in this area and that properly managed, the investment would raise productivity and absorb capacity released as mining projects wind up.
“However, with the economy at a pivot point characterised by fragile confidence; flat lining productivity; and below-trend growth, the budget also carries some risks to Australia's short-term economic health."