Sep 25, 2017

Coalition masters art of budget underspend – Opinion – The Australian

It’s one of the oldest tricks in the political playbook. And the Turnbull Government is turning it into an art form.

It’s known in budget parlance as the underspend — the practice of governments announcing big-spending commitments on Budget night, when Australians are focused on politics, but then failing to deliver the promised investment and hoping no-one will notice.

Underspend is the polite term. What we are really talking about here is cuts.

Nowhere is this practice more widespread in the Coalition Government than in infrastructure.

In its first three years in office, the Coalition Government underspent its announced infrastructure budget allocations by $3.7 billion.

These cuts affect a wide range of infrastructure programs.

Take, for example, the successful Black Spot road safety program, under which the Commonwealth makes grants to fund safety upgrades in the nation’s worst traffic accident hot spots.

In its first three Budgets, the Government committed to invest $220 million on this important program.

Each Budget night the Abbott-Turnbull Government presented new allocations to the Black Spot program as evidence of its commitment to road safety and nation building, especially in rural and regional Australia.

However, Budget documents showing how much was actually spent, rather than what was promised, reveal that the Government in fact cut its investment by more than half, investing $105 million, not $220 million.

If investment had been delivered as promised, the Government could have improved safety on hundreds of traffic accident hot spots around the nation, based on 2012 research by the Bureau of Infrastructure, Transport and Regional Economics showing the average project cost was $157,000.

This investment would have made motorists safer. Indeed, the BITRE analysis showed that after Black Spots were upgraded under the program, the incidence of accidents causing deaths or injuries fell by 30 per cent.

The Government has also cut its investment in the Heavy Vehicle Safety and Productivity Program (HVSPP), created by the former Labor Federal Government to build or improve roadside facilities like rest stops and parking bays for truck drivers on major highways.

Australians who drive interstate will have noticed the increase in roadside facilities delivered under this program in recent years.

In opposition the current Government backed the HVSPP and, in its first three budgets, vowed it would invest $171 million.

In fact, it spent $64.6 million — a cut of $106.9 million, or almost two out of every three dollars.

The Coalition went to the 2013 election promising to create the Bridges Renewal Program, under which it would work with local communities in rural and regional areas to improve the safety and carrying capacity of bridges.

It’s a good program. It improves road safety and also boosts productivity by making it easier to move products from farms to market.

The Government promised it would invest $180 million on the bridges program in three years. But it has spent $100 million — an $80 million cut.

Cuts are everywhere.

The biggest infrastructure program of them all — major road projects — has been cut by an incredible $1.3 billion.

Likewise, in 2016-17, the Government promised to invest $100 million in the Northern Australia Roads Program.

Actual spending was just $12 million.

As a former Minister for Infrastructure, I know from experience that sometimes there are good reasons for money allocated in a particular Budget year not being rolled out in that particular year.

For example, sometimes weather delays or difficulty finalising contracts with construction firms can cause spending allocated one year to be carried forward to the next year.

However, three consecutive years of failing to deliver promised investment indicates this Government is either completely incompetent or is serially misleading Australians.

I suspect it’s a bit of both.

Australians have a right to expect that when a Government commits funding to projects on Budget night, it will actually follow through and deliver those projects.

But that is not happening in infrastructure.

It is also important to note that whenever the Government talks about the total value of its infrastructure program, the figures used are not actual investment, but the investment promised on Budget night.

Next time you hear the Prime Minister or any of his infrastructure ministers give a figure on their overall infrastructure budget, treat it with a grain of salt.

Indeed, based on the examples I have found, halving the figure nominated would take you much closer to the truth.

The annual frenzy that surrounds the presentation of the Federal Budget each May understandably focuses on big-ticket items that make for great headlines.

But based on the record of the current Coalition Government, comparing the previous year’s Budget night promises with actual spending levels would provide a far better indication of its progress.

Anthony Albanese is opposition spokesman for infrastructure, transport and regional development.