Budget Prefers Handouts over Serious Money for Infrastructure

9 May 2012

The total amount allocated to new infrastructure projects in this Budget is more modest than previous years due to the quest to return to a surplus position and the provision extra payments to low income households.

PwC partner Scott Lennon says, "The Budget makes three significant new funding announcements for major infrastructure projects being $3.5Bn for the Pacific Highway, the Moorebank Intermodal Terminal and $232 million for the Torrens/Goodwood rail project. Whilst the budget position is tight, congestion is choking our major cities and commuters were hopeful of more support to fix our major bottlenecks. Deferral of $158m in funding for the Western Highway in Victoria by two years to 2014-15 is an example of the difficult tradeoffs which saw achieving the surplus meaning some infrastructure needed a minor deferral."

"The Federal support for the Moorebank IMT is critical as it will form a vital part of the freight logistics network with its strategic location near the M4, M5 and Port Botany rail freight lines. Over time it has potential to substantially reduce the number of truck movements through inner Sydney."

"Sydney needs over $15 billion to build the three missing motorway links, but because achieving a surplus was critical, Sydney Motorway funding was limited to $150 million for planning, design and pre-construction work for the F3-M2 tunnel and $30 million for planning work for the M4 East. Scott Lennon says, "While we had hoped the Federal Government could find more funding for rail or motorways, at least this funding for planning recognises Sydney is choking in traffic congestion which is constraining economic growth and productivity."

"Additionally, some of the infrastructure allocations are conditional on matching state contributions which could lead to delays in the delivery due to the worse budget positions of the states. The community is sick of the game playing while we endure long delays everyday. Providing half the funds for completing the Pacific Highway is welcome but because the state will find it hard to match this funding, we now have a risk of a delay to completion beyond the target of 2016. Similarly, Federal funding of $2.1 billion for the Epping-Parramatta railway remains available to the state but unspent while the state government faces big challenges funding its infrastructure projects such as the North West Rail Link." Mr Lennon said.

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