Infrastructure expenditure in Commonwealth Budgets is
usually large and tends to attract attention.
This table sets out total payments to the states for
infrastructure under the last two Budgets including $9.18 billion in this
year’s Budget for the coming financial year.
Total payments to the states for
However, the presentation of the Budget documents can make
it difficult to separate new and existing projects and ascertain whether
expenditure is growing, or shrinking. The Parliamentary Library’s assessment of
several measures is set out below.
New money, new measures
The only new project that has new money is the Forrestfield
Airport Link project in Western Australia which will receive $490 million. 
This project is to compensate Western Australia for its low share of GST
New money, existing measures
An additional $119 million is allocated, over 2016–17 and
2017–18, for two existing measures; Keys2drive (a learner driver education
program) and the Badgerys Creek Airport.
Old money, new measures
A number of projects were announced as ‘new’.
These include Stage 2 of the Perth Freight Link for which
$261 million was allocated from the existing resources of the Infrastructure
Investment Programme and the Ipswich Motorway in Queensland for which $200
million is allocated from the same source.
Four states have (or will), receive funds from the existing Asset
Recycling Initiative (ARI). The ARI was originally
included in the 2014–15 Budget and funded through the sale of Medibank Private.
Both the Sydney and Melbourne Metro rail projects have (or will) received these
funds. While the Budget does not contain details about which projects will
receive funding through the ARI, media reports state that the Melbourne Metro
will receive $857 million, and the Sydney Metro $1.7 billion.
In June 2014, Victoria received a grant from the
Commonwealth of $1.5 billion for the construction of phase one and two of the
East West Link road. Following the 2014
Victorian election, the newly elected Labor government cancelled the East West
Link project, but retained the $1.5 billion payment from the Commonwealth.
The 2016–17 Budget releases the Victorian Government from
the obligation to apply these funds towards the East West link and re-allocates
them to various new infrastructure projects including:
- $350 million for the Western Ring Road
- $220 million for the Murray Basin freight rail upgrade and
- $500 million for the Monash freeway.
New money, capital measure
From 2017–18, the Australia Rail Track Corporation will
receive additional money of up to $593.7 million over three years in the form
of equity to progress the Inland Rail project, including for land acquisition.
This figure is not, however, included in the table above, or the chart below,
as it is a capital measure and does not affect the underlying cash balance.
Two savings measures relating to infrastructure are
contained in the 2016–17 Budget. The Infrastructure Investment Programme
will achieve $162.7 million in ‘efficiencies’ over four years from 2016–17.
Savings will also be achieved from the $853.6 million in uncommitted funds from
the ARI, which will close on 1 July 2016.
There has been considerable debate in the last few years about
the need to depoliticise infrastructure decision making in Australia and to
ensure objective assessments of projects are conducted.
However, it appears that some projects contained in the Budget have not been
assessed by Infrastructure Australia (IA). For example, the
business case for neither the Victorian Monash Freeway nor the Victorian
Western Ring Road projects has been assessed (although the IA Priority List, at
May 2016, records the Western Ring Road proposal as a potential solution to an
identified congestion problem and that a business case is being developed).
Chart: State/Territory share of infrastructure spending 2016–17 Budget (per
The chart shows infrastructure spending shares for each
state and territory for 2016–17.
The budget figures in this brief have been taken from the following
document unless otherwise sourced: Australian Government, Federal Financial Relations: budget paper no. 3: 2016–17,
2016, pp. 48–56.
Ibid., p. 150.
Australian Government, Budget paper no. 2: 2016–17, 2016, pp. 150.
Australian Government, Budget
measures: budget paper no. 2: 2008–09, 2008, p. 267 and Budget paper no. 2: 2016–17, op. cit.,
Australian Government, Budget Measures: budget paper no. 2: 2016–17, 2016, pp. 131–2.
Australian Government, Overview:
budget 2016–17, p. 22. For further details on the ARI, see R Dossor, Asset
Recycling Fund Bill 2014, Bills digest, no. 90, 2013–14, Parliamentary
Library, Canberra, 2014.
Australian Government, Budget
measures: budget paper no. 2: 2014–15, 2014, p. 114 and ‘Medibank
Private sale earns Government more than $5.6 billion: proceeds to be reinvested
in infrastructure’, ABC News, 23 November 2014.
M Ludlow, ‘Turnbull
grabs leftover asset recycling funds’, Australian Financial Review,
4 May 2016, p. 6.
Australian National Audit Office (ANAO), Approval
and Administration of Commonwealth Funding for the East West Link Project,
Audit report, 14, 2015–16, ANAO, Barton, ACT 2015, p. 7.
L Keen, ‘Andrews
government looks to road project in the west’, Australian Financial
Review, 23 April 2015, p. 5.
Ibid., p. 131.
Ibid., p 171.
Ibid., p. 131.
Ibid., p. 147.
For example see, M Terrill, Roads
to riches: Better transport investment, Grattan Institute, Melbourne,
April 2016 and R Dossor, Infrastructure
Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014, Bills
digest, 28, 2014–15, Parliamentary Library, Canberra, 2014.
Infrastructure Australia (IA), ‘Project
Assessment’, and ‘Infrastructure
Priority List – May 2016’, IA website.
All online articles accessed May 2016.
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