The Federal Government has wasted at least $70 million in interest on debts raised to give the NSW and Victorian Liberal Governments road funding grants they did not even need.
This is the conclusion of the Government-dominated Joint Public Accounts Committee after its investigation into Commonwealth grants for Melbourne’s ill-fated East-West Link and Sydney’s controversial Westconnex toll road project.
After taking office in 2013, the Government gave the Victorian Government a $1.5 billion advance payment for the East-West Link. It gave a $500 million advance payment to the NSW Government for Westconnex, as well as a $2 billion concessional loan.
The Public Accounts Committee found that at the time the grants were made, the Victorian Government had already allocated all funding necessary for the East–West Link for 2013-14, while the NSW Government had told the Commonwealth it required no more than $46 million for Westconnex.
“The committee was not presented with any material that it considers provides a proper basis for these advance payments and the committee noted the payments were not required to progress either project at that time,’’ the report said.
“The Government’s decision to make these payments resulted in significant extra costs to the taxpayer in terms of interest on borrowing.
“These costs were estimated as being around $70 million at the time the two audits were completed.’’
Since then, the total interest payments on this needless debt would be more than $100 million and counting.
The report also found the Coalition breached its own election promises by funding the projects without cost-benefit analysis from the independent Infrastructure Australia.
This finding is particularly damning.
After the Government funded the East-West Link, it emerged the project was a dud that would have delivered a paltry 45 cents in public benefit for every dollar invested. That is why the project later collapsed.
The former Labor Government created Infrastructure Australia to protect public money.
But the Coalition has sidelined the organisation, ignoring its advice to invest in public transport and instead funding dud toll roads on the basis of its political requirements, rather than the national economic interest.