In response to a review jointly completed with the State and Territory Governments, the Federal Government has announced the decision to remove funding totaling $7 billion from 50 infrastructure projects across Australia.
The decision comes after the review found that the projects were not realistically going to be delivered with the funding available, have made little to no progress over a significant amount of time, or did not align with government priorities.
The review found that while local government programs are a critical funding mechanism for local roads and infrastructure, they are administratively burdensome and lack sufficient funding or certainty.
As part of responding to the findings of the review, the Federal Government has made necessary decisions to no longer provide funding at this time to some projects.
The Federal Government has also said that it knows that there continue to be significant cost pressures in the system and that it will work collaboratively and proactively with the states and territories to manage these.
Over the next ten years more than 400 individual ongoing projects are expected be completed or substantially developed, including:
- North South Corridor – Torrens to Darlington
- Logan – Gold Coast Faster Rail
- M1 Pacific Motorway Extension to Raymond Terrace
- Tanami Road in Central Australia
- New Bridgewater Bridge
The Federal Government has also acted on the review recommendations to improve efficiency and flexibility in project deliverability on nationally significant road and rail corridors.
Many projects located along strategic national freight routes are now grouped into corridors. This approach will allow State and Territories to more flexibly manage project delivery schedules according to their priorities.
The Federal Government has guaranteed $27 billion for a range of strategic freight and road safety corridor upgrades in regional Australia, including the Newell, Princes and Bruce Highways.
From now on the Federal Government’s investment in infrastructure will focus on productivity, sustainability, and liveability.
The review report’s executive summary, the Final Report of the Independent Review of the National Partnership Agreement on Land Transport Infrastructure Projects and a summary of changes to projects funded under the Infrastructure Investment Program are available at here.
Industry bodies and representatives have responded to the news:
Australian Constructors Association
The Australian Constructors Association (ACA) has welcomed the publication of the findings of the Independent Strategic Review of the Infrastructure Investment Program, but said a cloud of uncertainty still hangs over the industry.
Australian Constructors Association CEO, Jon Davies, said the review has provided some answers, but there’s still much more to figure out.
“The critical question remains: How will state governments respond to the withdrawal of funding on some projects and the new equal funding split going forward? There is also a big question concerning when the Melbourne Airport Rail Link will proceed,” Mr Davies said.
“The uncertainty has to end. It’s time to redirect focus from the rearview mirror where we question past decisions and instead concentrate on improving industry productivity to deliver these projects more cost-effectively and without the need for additional resources.”
In a positive step forward, a review of the funding mechanism for transport infrastructure between the Federal Government and the states, the National Partnership Agreement (NPA), was also released today, setting clear signals to drive better value to taxpayers.
“It is encouraging to see the Federal Government plans to use its buying power to drive improved outcomes on all projects,” said Mr Davies.
“Moving away from focusing on lowest price at tender and transferring as much risk to the contractor to achieving best overall value will have significant positive flow on effects to both industry and taxpayers.
“If there is to be an upside to the reviews, it must be that Australia finally has a more transparent and stable pipeline of projects, but we must also improve how these projects are delivered.
“We’re calling on the Federal Government to work with the states, industry and unions to create a ten-year National Construction Strategy to improve the productivity and financial sustainability of the industry that is critical for Australia’s future prosperity”.
Australasian Railway Association
The Australasian Railway Association (ARA) has welcomed a funding boost for key rail projects set to deliver critical transport for the future under the Federal Government’s infrastructure review released today.
The independent strategic review of the Infrastructure Investment Program confirmed an additional $1.75 billion to be invested in the Logan-Gold Coast Faster Rail, $1 billion more in Western Australia’s Metronet project, as well as confirming funding of $61.8 million for planning and development of the Western intermodal freight terminal at Truganina, Melbourne, to connect Inland Rail.
Today’s announcement confirms the Federal Government’s commitment of more than $18.6 billion for the construction and planning of critical rail projects across the country captured by the review.
ARA CEO Caroline Wilkie said it is also encouraging that the independent review recognised the Melbourne Airport Link as an essential project that must go ahead.
“As a major global city experiencing considerable population growth, the Melbourne Airport Rail link is a critical project that must proceed as soon as possible,” Ms Wilkie said.
“It is an essential piece of transport infrastructure that will not only provide an important public transport link for commuters and businesses but support the local tourism industry.”
Ms Wilkie said the review provided much-needed certainty around the pipeline and, importantly, an increased focus on delivering significant rail projects that enable economic growth and thriving communities.
“We are in the midst of a once-in-a-generation infrastructure pipeline that will greatly enhance how Australia moves its people and freight and it is critical that we have the right planning and processes in place to make the most of this opportunity,” Ms Wilkie said.
“Having certainty around infrastructure projects ensures a viable and sustainable local rail supply chain which minimises disruptions to contractors and suppliers and enables better workforce planning and capability and reduces costs.”
Ms Wilkie said the additional investment in faster rail from Logan to Gold Coast is a welcome boost, with much of Australia’s regional rail infrastructure being slow by world standards.
“With a ballooning population and increasing congestion on highways, immediate investment in existing networks will improve the speed, reliability and frequency of regional rail services between the Gold Coast and the south of Brisbane,” said Ms Wilkie.
“It has been shown overseas that small travel time improvements can have a significant impact on increasing patronage and supporting the economies and communities of cities.”
Infrastructure Partnerships Australia
Infrastructure Partnerships Australia CEO, Adrian Dwyer, said that the Government has delivered much needed clarity for the infrastructure sector to get back on track, identifying the projects and programs it will prioritise over the next decade.
“Reviewing the program was always a prudent move, and the Government has rightly concluded that the core aspects are vital to meet Australia’s economic aspirations and population growth demands,” Mr Dwyer said.
“This announcement answers some important questions on the pipeline, but it also poses new questions that will need answering.
“Australia has enviable population growth and unmet demand for infrastructure. That’s a high-quality problem to have, but it’s a problem nonetheless.
“You need to build the infrastructure for the economy you want, not the one you’ve got.
“Where a project remains necessary, but the Commonwealth will no longer contribute to delivery, that leaves an unmet demand on state dollars.”
Mr Dwyer said that Australia’s states and territories have acute fiscal constraints and severely limited capacity to raise revenue.
“In short, they don’t have the big wallets, but they do have big responsibilities.
“If the practical effect is to transfer an ever-greater share of necessary infrastructure funding demand to the level of government that can least afford to pay, then the net outcome is less infrastructure.
“It seems counter-intuitive to move the funding balance to the level of government least able to bear that cost.
“Ultimately, taxpayers care little which pot of their money investment comes from – but they care greatly that they have high quality infrastructure.”
Infrastructure Association of Queensland
Infrastructure Association of Queensland (IAQ) CEO, Louise Van Ristell, said that there is no doubt that infrastructure delivery across the country has been challenging in recent times.
“The cost blowouts of the Varsity-Tugun M1 upgrades are illustrative of this.
“Queensland has experienced significant increases in building, labour and resource costs in the last 12 months.”
Ms Van Ristell said that Infrastructure Australia found that public infrastructure projects faced a shortage of close to 214,000 skilled workers in 2023, which was more than double the available supply.
Further, Ms Van Ristell said that the cost of labour inputs increased by an average of 17 per cent in 2022 while the cost of construction inputs has risen by an average of 24 per cent.
“As Australia’s fastest-growing region, Queensland, particularly the Southeast, needs a clear, credible and agreed pipeline of investment now. With the 2032 Olympic and Paralympic Games only nine years away, Queensland needs to deliver its critical projects.
“Labour supply constraints are forecast to ease in coming years and Southeast Queensland does not have the luxury of time to deliver its necessary future infrastructure program. The ‘growth state’ will need to expand its transport, energy and critical services sectors to facilitate the rapidly increasing demand that comes with a booming population.
“Increased cost of living and inflationary pressures are affecting our communities.”
Ms Van Ristell said that with forecasted growth in Queensland set to continue over the next decade, establishing an iron-clad infrastructure commitment that delivers on the existing infrastructure pipeline is fundamental to delivering on 2032, achieving legacy outcomes and providing Queenslanders with the foundation to grow and improve their daily lives.
“The review and its outcomes have also highlighted the need for the Government to work with the private sector to manage any future labour, cost and supply chain challenges early on.”