A Shorten Labor Government will transform the way infrastructure is funded in Australia, beefing up Infrastructure Australia to unlock tens of billions in capital investment for key projects in every state and creating tens of thousands of jobs.
Labor will elevate Infrastructure Australia to an active participant in the infrastructure market, mobilising private sector finance, Australia’s superannuation industry and international investors to bring a national pipeline of investment online.
Labor established Infrastructure Australia as an independent advisor on nation-building infrastructure, and we now powering it up to create more jobs, boost our productivity and improve our competitiveness.
Infrastructure Australia will be backed by a $10 billion financing facility that will give Infrastructure Australia the ability, as required, to deploy a combination of guarantees, loans or equity to jumpstart new projects. This will not be a grants program – the Government will receive a return on these commercial investments.
By 2025, Australia’s superannuation savings will be $4 trillion – this is money we should be putting to work on nation-building.
Labor will establish this facility through the proven process for establishing the Clean Energy Finance Corporation.
Labor’s plan will leverage $10 billion of government-backed financing into tens of billions of dollars of private sector investment. For example, in the case of the CEFC, every dollar of government financing is leveraging $2.20 in additional investment.
Using a conservative analysis, prepared by Infrastructure Partners Australia, which assumes no additional leverage, a $10 billion infrastructure investment:
- Will directly create approximately 26,000 jobs.
- And add around an extra $7.5 billion every year to our GDP.
We will appoint an Expert Panel to determine a Financing Mandate and advise on the appropriate structure for the new facility within six months of coming to Government.
This will ensure that Infrastructure Australia operates as a catalyst for private sector investment, with the strictest financial discipline, commercial rigour credit risk assessment capacities and a commitment to nation-building.
Today we are announcing an initial short-list of projects that Labor supports as well as providing a commitment to work with State Government to encourage the development of an ongoing infrastructure project pipeline.
The initial list of projects that Labor will support include:
- The Airport Rail to Badgerys Creek, connecting the Western and South lines.
- The Melbourne Metro.
- The Cross River Rail project in Brisbane.
- The ‘G’ Light Rail on the Gold Coast.
- Planning work on the Ipswich Motorway Darra to Rocklea.
- Tasmania’s Midland Highway.
- Perth public transport.
- Gawler Line electrification in Adelaide.
- The Pacific and Bruce Highway packages, projects that have been underway for several years, but need to be fast tracked to completion.
These are projects that Infrastructure Australia has either assessed, or Labor will work with state government to fast-track assessments – they are Australia’s national to-do-list of priority infrastructure projects.
Right now, capital investment on infrastructure by governments is falling.
Infrastructure Australia has estimated that the economic cost of underinvestment is projected to reach $53 billion a year by 2031.
As the mining boom eases, quality infrastructure is central to driving Australia’s economic growth, creating jobs and boosting our productive capacity.
Labor will work with the private sector to overcome market failures, to get good projects up and going.
The old way of doing business, the traditional Commonwealth grant funding approach, simply cannot fund the infrastructure Australia needs. We need to look at new ways of securing private sector finance.
Australia has a need for significant investment in long term physical assets to underpin our future growth and productivity, but governments at all levels are not able to sufficiently fund them.
We have a deep pool of domestic capital in superannuation as well as significant global investors that are searching for stable and reliable assets to invest funds over extended periods.
Re-booting investment, lifting productivity and driving growth – requires us to face up to the sticking-points and stumbling blocks currently stand in the way of good infrastructure projects from being financed and taken to market.
Beyond the immediate priorities announced today, Labor will develop a long term pipeline for projects and ensuring the steady movement of projects through the assessment, development and financing phases.
By establishing an independent, funded project-broker, we will provide new and greater certainty to investors as well as creating a powerful incentive for State governments to propose and approve projects.
Just as the Reserve Bank of Australia is the independent authority at the centre of monetary policy, Infrastructure Australia will be at the centre of capital investment, driving results that are in the national interest.
A Shorten Labor Government will properly consult the Opposition on all board appointments and restore faith and confidence in the infrastructure process.
Australia’s future prosperity depends on a better way of securing investment in infrastructure.
A Shorten Labor Government will deliver better infrastructure to ease congestion, create jobs and improve productivity.
More information on today’s announcement is available here.
Leader of the Australian Labor Party, MP for Grayndler, Rabbitohs Life Member. Authorised by Anthony Albanese, ALP, Canberra.