The Turnbull Government’s failure to invest in new infrastructure is now constraining economic and jobs growth.
National Accounts released today state: “Public capital expenditure detracted 0.5 percentage points from growth as it declined from elevated levels in the June quarter”.
The warning follows earlier Australian Bureau of Statistics figures showing that total public sector infrastructure investment fell by 20 per cent in the Coalition’s first two years in office.
It also comes after news that in the 2015-16 financial year, the Government invested only $5.5 billion in infrastructure, despite having promised in its notorious 2014 Budget that it would invest $8 billion.
Because that figure included $490 million handed to the West Australian Government as GST compensation, the actual infrastructure cut was about $3 billion, or more than 35 per cent.
As Australia moves out of the investment stage of the mining boom, the Government needs to invest in infrastructure to support economic growth and jobs in the short term, while boosting productivity in the long term.
But the Coalition has been cutting infrastructure investment ever since it took office and pretending otherwise.
Indeed, as the National Accounts were being released today, Infrastructure Minister Darren Chester was touring coastal NSW looking at projects on the Pacific Highway that were designed, funded and in some cases completed by the former Labor Government.
In the 2016 Budget, the Federal Government cut its Pacific Highway investment by $351 million against what it committed in its 2015 National Partnership Agreement with the NSW Government.
Today’s economic figures represent a clear warning that the Government must stop talking about infrastructure and support investment in productivity boosting infrastructure.
In particular, Malcolm Turnbull should stop taking selfies riding on trains and actually invest in trains to address the traffic congestion that is acting as a hand brake on productivity and economic growth in our cities.