The fact is that this government has cut infrastructure investment and it will continue to cut infrastructure investment into the future. The Parliamentary Budget Office estimates that, based upon the government’s own figures, infrastructure investment as a proportion of GDP will fall from 0.4 to 0.2 per cent over the next decade. It will halve.
If you look at the specific budget figures, you can see why that’s occurring. The estimate of what the government would invest on infrastructure in the 2016-17 financial year, as announced on budget night, was $9.2 billion. If you look at the actual investment, it was $7.5 billion—or a $1.7 billion underspend—in circumstances when, because of the mining boom moving from the investment to the production phase, we should have been stepping up investment in infrastructure. But over the forward estimates it gets worse. Over the forward estimates, the amount of infrastructure investment will fall off a cliff to $4.2 billion.
We raised these questions this week in parliament with the hapless and helpless infrastructure minister, who happens to be the Deputy Prime Minister of Australia. What we’ve learnt is that the Deputy Prime Minister, Barnaby Joyce, does not have a clue about this portfolio, despite the fact that he was appointed to the position last year after a long period of stalking the former minister for infrastructure, the member for Gippsland. We asked the minister why, for example, Victoria, home to one in four Australians, receives only nine per cent of the Commonwealth infrastructure budget. Victoria is Australia’s fastest-growing state. Melbourne is Australia’s fastest-growing city. Yet this government chooses to allocate under 10 per cent of the budget.
In fact, in his answer he raised the $1.5 billion that was forwarded under the East West Link project, determined by the Abbott government in 2014, which the people of Victoria rejected when they elected the Daniel Andrews government. It’s not surprising that they rejected it, given it had a benefit-to-cost ratio of just 45c return for every dollar that would have been invested in that project. But, of course, because of the incompetent way in which the government have dealt with infrastructure and their budgetary policies, they’d already forwarded $1.5 billion as an advance payment to Victoria for this project before it had its business case.
This is a government that says that it had a policy of only making milestone payments once something was actually being built. But that $1.5 billion was, of course, reallocated to a range of projects just last year when they realised that it was unsustainable to have that money simply sitting in the bank account of the Victorian government and not building anything, which is what had occurred over the previous couple of years. But the infrastructure minister didn’t seem to know that that was the case—just like today, when, in answer to a question from his own side, he then went through and claimed rail projects such as the Regional Rail Link that were funded by the former Labor government and projects like the M80 as well.
We also asked him why he was cutting infrastructure investment in South Australia from $921.4 million in the current year to just $95 million in 2019-20. That represents South Australia receiving just two per cent of the national infrastructure budget in spite of the fact that the government have said they support the upgrading of the entire North-South Corridor road; in spite of the fact that the project between Torrens to Torrens and the South Road Superway is the next one ready to be progressed; in spite of the fact that the Prime Minister says he supports public transport, but the Gawler line electrification is ready to go and is waiting for funding; and in spite of the fact that the South Australian government has developed the AdeLINK light rail expansion to improve mobility and deal with urban congestion in that state. His response was to simply talk about the portfolio of the Minister for Defence Science and Personnel and defence spending rather than infrastructure and transport spending, which is what he’s actually responsible for. We asked why the government allocated $100 million to the Northern Australia Roads Program last year but actually spent $12 million, so there was an underspend of 88 per cent in that program at a time when they say they care about northern Australia. I note that the member for Solomon, who is in the chamber, can certainly identify roads that could have been funded in his electorate around Darwin and Palmerston and could have benefitted from that program. What we heard from the infrastructure minister was quite revealing in that he talked about the Nullarbor Plain. He wasn’t quite sure where the Northern Territory and northern Australia is. He talked about the Nullarbor, which says it all about his failure in this area.
Perhaps the worst response from the infrastructure minister, who showed that, frankly, he’s out of his depth in that portfolio, was his response to a question we raised about infrastructure investment in Tasmania. Since the change of government in 2013, we’ve seen a funding cut for the Midland Highway upgrade and a funding cut for the rail revitalisation program. Remarkably, for Tasmania, not a single new major infrastructure project funded by the federal government has begun—nothing in 2014, 2015, 2016, 2017 or 2018. The infrastructure minister referred to the Inland Rail project. If you look at a map of Australia, between the north island, where we are now, and the south island of Tasmania is the Bass Strait. I’ve got news for the minister for infrastructure: inland rail does not cross the Bass Strait. He should know that because, in fact, inland rail goes nowhere near water at all. It doesn’t go to the Port of Melbourne and it stops 38 kilometres short of the Port of Brisbane, at Acacia Ridge. It’s quite remarkable.
Today we asked why the government had spent $1 billion less than promised in Queensland in the past four years. Again, there was no response. There was no understanding that what we were talking about wasn’t what Labor thought should happen in Queensland. What we were talking about were their own budget papers in their first four budgets and what they said they would spend, and matching that up with actual investment. That cut is due to a failure to invest in programs in Queensland and right around the country. Money was allocated for things such as the Mobile Black Spot Program and the Heavy Vehicle Safety and Productivity Program. At a time when, after decades of a declining road toll, we’ve had the road toll increase, we have an underspend of half the funds that were allocated for heavy vehicle rest stops. That is a remarkable indictment of the incompetence of this government. That is this government’s record on infrastructure.
The total underspend between the 2014-15 budget—its first budget—and 2017-18 has now hit $4.8 billion. Now, occasionally, it may well be that a road project or a rail project has to be deferred slightly because of weather events or because of circumstances beyond the government’s control. I accept that that can happen. But this is happening across every state and territory every year, for road and rail projects large and small. That comes down to a simple case of incompetence. The difference between the budget that they announced in May 2017 and the MYEFO that they put out at the end of last year showed a reduction of $914 million—and we’re not even there yet. That’s what they cut from when they made the big announcements in May, and now we see what’s actually happening. On major road projects alone, the underspend is $2.8 billion. That is why Infrastructure Partnerships Australia said, ‘The budget confirms the cut to real budgeted capital funding to its lowest level in more than a decade—using a mix of underspend, reprofiling and narrative to cover this substantial drop in real capital expenditure.’ There are two ways you can grow an economy: invest in infrastructure or invest in people through education and training. This government is doing neither, which is why it’s not creating the conditions for growth in the future economy and for future employment and opportunity for Australians.
Leader of the Australian Labor Party, MP for Grayndler, Rabbitohs Life Member. Authorised by Anthony Albanese, ALP, Canberra.
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