Jun 15, 2017

Black spots on road to fixing infrastructure – Opinion – The Australian

You can always tell when a government is losing the battle of ideas — it abandons its own policies and imitates those of its political opponents. It’s a dead giveaway. So it is with infrastructure policy in Australia.

In the recent budget the Turnbull government went to extraordinary lengths to recast its position on infrastructure after years of cuts and inaction.

Almost overnight, it appeared to have embraced long-held Labor positions such as the need to borrow to invest in productivity-enhancing infrastructure as well as the desirability of commonwealth investment in public transport and the potential of high-speed rail.

But the Coalition’s big infrastructure shift is entirely rhetorical. It is not backed by actual investment. Indeed, the budget cut national infrastructure investment by $1.6 billion this year alone. And spending will fall off a cliff over the next four years from $7.6bn this year to $4.2bn by 2020-21.

The budget included cuts to the Bruce and Pacific highways, the Black Spot Program, the Bridges Renewal Program and the delivery of new and improved roadside rest facilities for interstate truck drivers.

In his budget speech, Scott Morrison made much of the creation of a $10bn National Rail Fund, which he said could be used for public transport projects such as the Melbourne Metro, Brisbane’s Cross River Rail project, Western Sydney Rail and AdeLINK light rail. This, too, seemed to represent a major shift.

After taking office in 2013, the Coalition cancelled all public transport projects not under construction at the time. Since then, it has failed to deliver new investment anywhere in the country.

But the government’s National Rail Fund is a con.

It won’t yield a dollar for public transport until well after the next federal election.

There is no funding this year, next year or the year after that. Finally, in 2019-20, $200 million will be made available.

The need for public transport is urgent. Traffic congestion is a handbrake on economic growth and a misery for commuters.

The fund is not a serious investment vehicle. It’s a political fix designed to create the appearance of action by a government that has come to realise Australians are sick of its excuses.

What is needed is actual investment — now.

The government’s major announcement was its recommitment to deliver the Inland Rail freight link from Brisbane to Melbourne with an equity injection into the Australian Rail Track Corp, the government-owned entity that runs the national freight network.

Labor supports this project.

In government we invested $600m upgrading parts of the existing rail network that will form part of Inland Rail and provided $300m to take the project forward in the 2013 budget.

In the 2013 election campaign, the Coalition vowed construction would begin in 2016.

Not only has construction not begun but, after four years in office, the Coalition also has not put in the work to address the fact the proposed line won’t meet its stated purpose of taking freight to the Port of Brisbane. It stops 38km short of the port at Acacia Ridge.

The government’s capital injection into the ARTC to deliver the project has been made on the assumption that Inland Rail will provide a financial return to taxpayers over time.

But a business case produced in 2015 by former deputy prime minister John Anderson warned that the revenue generated by the rail line in its first 50 years would not cover the cost of its construction.

Anderson wrote: “Hence, a substantial public funding contribution is required to deliver Inland Rail.”

The budget included no such funding. The government simply ignored Anderson’s advice about how to deliver the project.

Once again, we have a political fix, not a serious funding plan.

The infrastructure sector is underwhelmed by the budget.

Infrastructure Partnerships Australia — the nation’s peak infrastructure industry group — was not seduced by the government’s spin. Spotting the con a mile away, IPA said that the budget ripped $7.4bn from the federal infrastructure budget over the next four years.

“The budget confirms the cut to ‘real’ budgeted capital funding to its lowest level in more than a decade — using a mix of underspend, re-profiling and narrative to cover this substantial drop in real capital expenditure,’’ it says.

This piece was first published in The Australian on Thursday, 15 June, 2017: http://bit.ly/2sBVWfT