A closer look at budget funding: how the industry responded

Over the next decade more than $75 billion will be invested in transport infrastructure projects, with $24 billion allocated as part of the 2018/2019 Federal Budget to be spent over the next four years. The major road and rail investments that received funding aim to reduce congestion in the face of a rapidly growing population.

This year’s Budget aims to demonstrate the government’s commitment to a credible, decade-long pipeline of infrastructure projects, with freight and rail receiving the biggest share.

Prime Minister, Malcolm Turnbull, said the budget delivers a record investment in infrastructure.  “The budget also outlines the most significant infrastructure investment in our nation’s history, with $24.5 billion worth of new projects,” Mr Turnbull said.

“Right across the country, you will see that funding is committed in a manner that fairly represents the interests of the various parts of Australia and their infrastructure needs. So nobody has missed out,” Mr Turnbull said.

The major new investments in public transport infrastructure include the Melbourne Airport Rail Link, Perth’s METRONET program, the Port Botany Rail Line duplication, the Brisbane Metro project and the electrification of the Gawler Line in northern Adelaide.

Improving freight through rail and ports
The Federal Budget allocated $7.9 billion towards rail projects across Australia for both passengers and freight rail in order to reduce road congestion. This includes a commitment of up to $5 billion for a future Melbourne Airport Rail Link, the biggest infrastructure commitment in the budget.

$400 million will be provided to duplicate the remaining single‐track section of Sydney’s Port Botany Rail Line. Listed by Infrastructure Australia as a High Priority Initiative, this project will strengthen rail connection efficiency, improve freight transit times and increase service reliability — reducing traffic congestion in and around Sydney Airport and Port Botany, and is a major part of the National Freight and Supply Chain Strategy.

The Australian Logistics Council (ALC) was particularly pleased with the Port Botany duplication and the support of Australia’s freight network.

ALC Managing Director, Michael Kilgariff, said, “The Budget contains $5 million over four years to assist in the implementation of the National Freight and Supply Chain Strategy. This is a positive step which will hopefully promote close government engagement with industry participants throughout the implementation phase of the strategy.”

The National Freight and Supply Chain Strategy will guide the development of freight logistics infrastructure and regulation over the next generation, and prioritise decreasing congestion and increasing efficient and safe delivery of freight.

However, Mr Kilgariff also raised concerns over the government not establishing a dedicated Freight Strategy and Planning Division within the Department of Infrastructure, Regional Development and Cities.

“Such a body is essential to ensure that the movement of freight is effectively monitored, analysed and prioritised in policy-making.”

The Australasian Rail Association (ARA) also welcomed the commitment to freight and rail, but raised concerns over the challenges in skill development.  ARA CEO, Danny Broad, said it is imperative that Commonwealth, State and Territory Governments work collaboratively with industry to identify the long-term labour skills required, ensuring training methodologies are leading edge, as well as enhancing traineeship and apprenticeship opportunities and capabilities.

“If we do not get this right and invest now in the skills needed tomorrow, we will be putting the cart before the horse, resulting in projects not being delivered on time, delays and congestion to our networks, ultimately not solving the problems we are there to fix,” Mr Broad said.

Ports Australia CEO, Mike Gallacher, said there are a number of good measures in the budget being directly spent improving the supply chain to the country’s ports and economy.

“The rolling $75 billion infrastructure spend needs to address areas of inefficiencies in the supply chain, but we can also increase efficiencies without spending taxpayer dollars which is why a National Freight and Supply Chain Strategy is crucial.”

A national approach to road funding
The Budget includes various national road initiatives that prioritise reducing congestion and increasing safety.

The government will establish a targeted Urban Congestion Fund that will invest in projects in urban areas that address congestion points and last mile access to ports, airports and freight hubs.

A further $3.5 billion was allocated to establish the Roads of Strategic Importance initiative which will upgrade key freight corridors in regional Australia and increase productivity by connecting major agricultural and resource areas with cities and ports.

“Urban road congestion is not just an irritation for commuters in Australia’s major cities, but it has an enormous impact on the efficiency and cost of road freight movement,“ Mr Kalgariff said.

“Accordingly, the expansion of the Urban Congestion Fund to tackle this problem across all capital cities is an enormously welcome step, as are the investments to upgrade key freight routes through the $3.5 billion Roads of Strategic Importance initiative.”

Other road project funding investments included:

  • $1.5 billion to upgrade Northern Territory infrastructure
  • $400 million to upgrade regional highways in Tasmania, including the Bass Highway, to improve safety and freight efficiency
  • $220 million to deliver a bypass of Bindoon on the Great Northern Highway in Western Australia
  • $100 million in additional funding for the Barton Highway corridor to improve access from regional New South Wales to the Australian Capital Territory

Roads Australia Chief Executive, Ian Webb, said, “The Budget reaffirms the government’s commitment to the funding of significant infrastructure projects that will have a meaningful impact on people’s lives.”

“The rail and road projects being funded are sorely needed, nation-building projects that will provide long-term community benefit, kick-off growth and encourage further investment from the private sector, and attract more tourism to our cities.”

The National Road Transport Association (NatRoad) also welcomed the Federal Budget measures which NatRoad CEO, Warren Clark, said have the potential to improve the safety and efficiency of the road transport industry.

“Spending to reduce congestion in our cities has the potential to reduce expensive delays for operators, particularly in terms of the frustrating last mile access to ports, airports and freight hubs,” Mr Clark said.

Concerns over focus of infrastructure spend
However, Infrastructure Partnerships Australia (IPA) Chief Executive, Adrian Dwyer, was disappointed with the outcome, saying the Federal Budget reduced infrastructure funding by $2 billion over the forward estimates, meaning less cash for projects and more congestion for commuters.

“This will be disappointing to the states because the warm infrastructure narrative pre-budget has not been met with cold hard cash in the budget papers.”

“Infrastructure projects like metro in the major cities, better freight connections and safer roads will need much greater focus from all sides of politics in the run up to the next election.”

In contrast, PwC Chief Executive, Luke Sayers, said it’s pleasing to see a significant focus on infrastructure to cater for the growth in cities, including investment in transport networks in Sydney and Melbourne.

“Our cities are feeling growing pains due to infrastructure bottlenecks causing congestion and infrastructure gaps making it difficult for people to access essential services. There is also the ongoing challenge of linking up remote communities with our cities,” Mr Sayers said.

Overall, this year’s Federal Budget supports a decade-long pipeline of infrastructure projects focused on driving economic growth, increasing productivity and connectivity, and creating new employment opportunities. These projects are expected to create approximately 50,000 additional direct and indirect jobs over the next ten years.

Funding by state and territory

National

  • Roads of Strategic Importance (ROSI) initiative: $3.5 billion, including $2.2 billion to be provided to specific regions or corridors
  • Urban Congestion Fund: $1 billion
  • Major Project Business Case Fund: $250 million
    New South Wales
  • Coffs Harbour Bypass: $971 million
  • Nowra Bridge construction: $155 million
  • Port Botany Rail Line Duplication: $400 million
  • Western Sydney North-South rail: $50 million to joint fund a business case with the New South Wales Government
  • Barton Highway corridor: $100 million for the continued upgrade of the highway, which is an important
    link between regional New South Wales and the Australian Capital Territory

Victoria

  • Melbourne Airport Rail Link: Up to $5 billion
  • North East Link: $1.75 billion
  • Monash Rail: $475 million
  • Frankston to Baxter Rail Link Electrification Upgrade: $225 million
  • Victorian Congestion Package: $140 million
  • Continued investment in regional rail (Geelong Line): $50 million
  • Completion of the duplication of the Princes Highway East (Traralgon to Sale): $132 million
  • The government also remains committed to the East West Link and its offer of $3 billion stands

Queensland

  • Bruce Highway: $3.3 billion for continued upgrades to the Bruce Highway:
    $880 million Pine River to Caloundra corridor upgrade
    $800 million for the Cooroy to Curra—Section D
    $200 million for additional safety works
  • M1 Pacific Motorway: $1 billion towards upgrades between Varsity Lakes and Tugun, and between Eight Mile Plains and Daisy Hill
  • Beerburrum to Nambour Rail Upgrade: $390 million
  • Brisbane Metro: $300 million
  • Cunningham Highway (Amberley Interchange): $170 million
  • Toowoomba to Brisbane Passenger Rail Business Case: $15 million to support planning
  • Queensland will also receive a share of the $1.5 billion ROSI initiative—Northern Australia Package, and a share of the $160 million commitment to the Outback Way, both to be allocated across the three northern jurisdictions

Western Australia

  • METRONET: An additional $1.1 billion, taking total Australian Government funding to $2.3 billion, including new projects announced in the budget:
    $500 million for Morley-Ellenbrook Line
    $241 million for Byford Extension
    $83 million for the Midland Station project
    $2 million for Lakelands business case
    $226 million for further projects to be agreed
  • Road Projects: $1.5 billion including:
    Bunbury Outer Ring Road (stages two and three): $560 million
    $252.5 million for Tonkin Highway stage three Extension
    $145 million for Tonkin Highway Gap
    $183 million for Tonkin Highway interchanges
    $107.5 million for Mitchell Freeway Extension—Hester Avenue to Romeo Road
    $46.5 million for Leach Highway (Welshpool Road interchange)
    $144 million for Roe Highway/Great Eastern Highway Bypass and Abernethy Road/Great Eastern Highway Bypass
    Interchanges)
    $65 million for Stephenson Avenue Extension Bindoon Bypass—Great Northern Highway: $220 million though the ROSI initiative EastLink WA (Orange Route) Business Case—$10 million
  • Western Australia will also receive a share of the $1.5 billion ROSI initiative—Northern Australia Package, and a share of the $160 million commitment to the Outback Way, both to be allocated across the three northern jurisdictions
  • The government also remains committed to the Perth Freight Link and its offer of $1.2 billion stands

South Australia

  • North South Corridor Future Priorities:
    North-South Corridor—Regency Road to Pym Street: $177 million
    Future Priorities: $1.21 billion
  • Joy Baluch Bridge: $160 million
  • Gawler Rail Line Electrification: $220 million
    Tasmania
  • Bridgewater Bridge Replacement: $461 million
  • Freight Rail Revitalisation: An additional $59.8 million to be provided from 2019–20
  • Tasmania will also receive dedicated funding of $400 million from the ROSI initiative for a Tasmanian Roads Package, focusing on the Bass Highway
    Australian Capital Territory
  • Monaro Highway Upgrade: $100 million
  • ACT will also benefit from the increased connectivity with NSW generated through the ROSI initiative to upgrade the Barton Highway

Northern Territory

  • Central Arnhem Road Upgrade: $180 million
  • Buntine Highway Upgrade: $100 million
  • The Northern Territory will also receive a share of the $1.5 billion ROSI initiative—Northern Australia Package, and a share of the $160 million commitment to the Outback Way, both to be allocated across the three northern jurisdictions

Northern Australia

  • ROSI initiative—Northern Australia Package: $1.5 billion to be shared across Queensland, the Northern Territory and Western Australia
  • Outback Way: $160 million to be allocated across Queensland, Northern Territory and Western Australia
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