The absurdity of the Turnbull Government’s approach to infrastructure has been underlined by its bizarre proposal to build toll roads in Australia’s north through the Northern Australia Infrastructure Facility.
Anyone who knows anything about the economics of financing roads would know toll roads will not stack up in the relatively sparsely populated areas of northern Australia.
This absurd proposal is the latest manifestation of Prime Minister Malcolm Turnbull’s campaign to cut Commonwealth infrastructure investment.
His approach is further illustrated by his creation of the new Infrastructure Financing Unit (IFU) to promote methods of financing.
The IFU has been rejected as needless by economists and the peak infrastructure sector body Infrastructure Partnerships Australia, which has repeatedly called on the Government to lift its own level of investment.
However, a report released last week by the Parliamentary Budget Office noted that Commonwealth infrastructure investment expressed as a proportion of GDP will halve over the next decade from 0.4 per cent to 0.2 per cent.
While private investment can be used to help deliver major projects, the fact is that private investors will only invest in projects which, like toll roads, produce revenue streams.
The former Labor Federal Government invested $5.5 billion on roads in Northern Australia. But since 2013 Mr Turnbull has cut infrastructure funding to the bone.
The NAIF, created amid fanfare more than two years ago, has yet to invest a single dollar in a single project.
NAIF is an appropriate acronym for the Government’s infrastructure agenda, except it should be called the No Actual Infrastructure Fund.