The peak business group for the infrastructure sector has slammed the Turnbull Government’s infrastructure funding model, which is expected to be a centrepiece next month’s Budget.
Infrastructure Partnerships Australia’s damning criticism of the proposed Infrastructure Financing Unit comes as Prime Minister Malcolm Turnbull continues to fail to match his rhetoric on infrastructure with actual investment in railways, roads and ports.
In April last year, Mr Turnbull announced he would create an Infrastructure Financing Unit within the Department of Prime Minister and Cabinet to work with the private sector to enlist private investment in infrastructure using “innovative financing solutions’’.
But the respected IPA has warned that this approach would put public money at risk by effectively turning the Government into a “lender of last resort’’.
There is a contradiction in the Government’s position on this fund. On one hand it wants financing to be available where private financing is not. But on the other hand, it claims this unit would work on projects that would be taken off Budget as they would produce a return for government.
The IPA is correct to point out there is no lack of finance available for good projects in Australia. It is also correct to call for an increase in actual government investment.
Mr Turnbull’s move to create the financing unit within his own department will also sideline Infrastructure Australia and the Department of Infrastructure and Regional Development.
This makes no sense. Part of Infrastructure Australia’s role is to make recommendations on financing of projects.
The IPA’s embarrassing assessment of the Infrastructure Financing Unit follows the failure of Mr Turnbull’s Northern Australia Infrastructure Fund, announced two years ago.
The NAIF has yet to invest in a single piece of infrastructure. The only money going out the door at the NAIF is to cover the expenses of its directors.
The twin failures highlight Mr Turnbull’s tendency to make grand announcements on infrastructure to avoid actually investing in the railways and roads Australians need.
Australian Bureau of Statistics figures show total public sector infrastructure investment fell 20 per cent in the first two years of the Coalition Government.
The ABS figures also show that quarterly total public sector infrastructure investment under the Coalition has been lower in all 12 quarters during its term in office than in every single quarter under the former Labor Government after its first Budget in 2008.
Australian needs a Government prepared to actually invest in infrastructure, not just talk about it.