In their opposition to the Rudd Government’s nation building agenda the Liberals and Nationals have reminded the Australian public that infrastructure development remains a fundamental distinction between Labor and our conservative opponents.
A fundamental fact that the Coalition has never understood is that infrastructure investment is not just a cost – it is a long term investment in the productive economy.
Investment in infrastructure generates higher returns than investment in other sectors of the economy.
Addressing Australia’s infrastructure backlog will lead to significant economic benefits including an increase in GDP and a more efficient export sector. In their recent report Going for Growth released in March, the OECD confirmed that investment in energy, water, transport and telecommunication networks can boost long-term economic output and productivity to a greater extent that other types of physical investment.
Infrastructure investment has also been shown to ease inflationary pressures on the economy and improve living standards.
In short, investment in infrastructure pays back big time.
To have neglected infrastructure investment, as the coalition did when in government, was both irresponsible and short sighted.
The simple fact is that when the mining boom delivered prosperity and surpluses to our shores, the Howard government did not invest in the long term productivity of the economy.
Good economic managers would have invested in infrastructure – and we would have been reaping the rewards today.
Instead they left Australia ranked 20th out of 25 OECD countries when it comes to investment in public infrastructure as a proportion of national income.
Their legacy was capacity constraints that have placed incredible strain on the Australian economy.
Despite some 20 warnings from the RBA about inflationary pressures due to capacity constraints, the previous government sat on their hands.
This is because their vision never extended beyond the next election.
And that lack of foresight meant that under their watch, well before the global economic recession, productivity growth had declined.
Over the last 5 years of the Howard government, productivity growth averaged its lowest in more than 16 years. Productivity growth fell from 3.3 per cent over the five years to 1998-1999, then to 2.2 per cent over the five years to 2003-2004. Over the subsequent 4 years, it averaged just 1.1 per cent.
The previous government’s infrastructure inaction has not only hurt the economy, it’s had negative impacts on the quality of life of all Australians.
Infrastructure investment drives productivity.
And productivity drives national living standards.
The infrastructure deficit is having a real impact on Australians, as a result of issues such as urban congestion.
It is a tragedy that for many working families more time is spent in their cars travelling to and from work than at home with their family.
It also means the task of transporting goods to the supermarket shelf takes longer and is more costly and a greater source of carbon pollution.
That is why Labor is investing $35.8 billion in nation building transport infrastructure.
These projects are supporting jobs and the economy today, while building the infrastructure we need for tomorrow.
The Government’s Nation Building Program will support over 120 road and 26 rail projects.
On top of that we have more than doubled the funding for the Black Spots Program which targets dangerous roads and we have established new programs to install boom gates at 292 high risk level rail crossings and construct additional rest stops for truck drivers.
The Opposition continues to criticise the Rudd Government’s economic stimulus, yet they offer no alternative.
The opportunism of Malcolm Turnbull is emerging as the biggest threat to the nation’s economic recovery and the modernisation of the nation’s economic infrastructure. Not satisfied with having left a massive infrastructure deficit, now the Coalition is attempting to thwart our efforts to act.
The Rudd Government has established structures and systems which take short-term political expediency out of the decision making process.
Our response is built around structures like Infrastructure Australia and the Major Cities Unit.
We have broken the nexus between the electoral cycle and the infrastructure delivery cycle.
Investing in the national road network including $3.1 billion for the Pacific Highway, $2.6 billion for the Bruce Highway and $950 million for the Hume Highway is good for jobs in the short term and good for the economy into the future. This is part of the vision outlined in the budget of modernising Network 1 all the way from Melbourne to Cairns.
On rail the Rudd Government is investing more in 12 months than the previous Government spent in 12 years.
Our Nation Building for Recovery Plan will ensure that Australia emerges from the challenge imposed by the global economic crisis in a strong position to make the most of our opportunities in the future.