Budget Review October 2022–23 Index
Rodney Bogaards
The Morrison Government stated in its final Budget that infrastructure
funding contributed towards a ‘… record $120 billion 10-year infrastructure
investment pipeline’ (Budget
strategy and outlook: budget paper no.1: March 2022–23, p. 9). The
Albanese Government has continued this messaging, noting in its Building
a better future: budget October 2022-23 that, ‘the Government is
delivering on its election commitments as part of the more than $120 billion
pipeline of investment in transport infrastructure over the next 10 years’ (p. 36).
This article aims to provide some clarity around the changes that have occurred
to the ‘infrastructure pipeline’ since the March 2022–23 Budget.
In the Parliamentary Library’s April 2022 Budget review
article, Infrastructure
expenditure over the next decade, the difficulty reconciling the
10-year infrastructure pipeline with the information presented in the budget
papers was explained. This issue persists in the October 2022–23 Budget. While
this article is unable to provide a full picture of the infrastructure funding
profile over the next 10 years, it is able to explain what will occur over the
first 4 years of the ‘pipeline’, which involve payments to support state
infrastructure services.
The October Budget shows a reduction of nearly $5 billion
from the March Budget in transfer payments to other governments for
infrastructure for the Budget year and the forward estimates (that is, from
2022–23 to 2025–26). This decreases total infrastructure payments to state
governments from $67.7 billion to $62.7 billion. This is reflected in
Tables 1 and 2 below. As in March, the funding for years beyond the forward
estimates is not a matter of public record.
Table 1 Payments to support
state infrastructure services, March 2022–23 Budget
| $
million |
2022–23 |
2023–24 |
2024–25 |
2025–26 |
Total |
| Infrastructure Investment Program |
15,588.0 |
17,549.0 |
15,072.3 |
10,040.8 |
58,250.1 |
| Other payments (including those
direct to local governments) |
2,140.9 |
2,529.5 |
2,696.5 |
2,072.0 |
9,438.9 |
| Total |
17,728.9 |
20,078.5 |
17,768.8 |
12,112.8 |
67,689.0 |
Source: Australian Government, Federal
Financial Relations: Budget Paper no. 3: March 2022–23, p. 56, 97.
Table 2 Payments to support
state infrastructure services, October 2022–23 Budget
| $ million |
2022–23 |
2023–24 |
2024–25 |
2025–26 |
Total |
| Infrastructure Investment Program |
12,175.4 |
14,107.6 |
14,403.4 |
14,006.2 |
54,692.6 |
| Other payments (including those
direct to local governments) |
2,058.6 |
2,071.3 |
2,124.8 |
1,763.1 |
8,017.8 |
| Total |
14,234.0 |
16,178.9 |
16,528.2 |
15,769.3 |
62,710.4 |
Source: Australian Government, Federal
Financial Relations: Budget Paper no. 3: October 2022–23, p. 54, p. 92.
From the information provided in the
October 2022–23 Budget it is unclear how much of this $5 billion has been
rolled forward beyond the forward estimates in the same projects, how much has
been rolled forward into different infrastructure projects and how much has
been re-directed to the Government’s other non-infrastructure priorities.
The Minister for Infrastructure, Transport, Regional
Development and Local Government outlined the Government’s infrastructure
strategy in a media
release accompanying the October 2022–23 Budget:
The Budget takes an important first step in ensuring the
Commonwealth’s infrastructure spending is responsible, affordable and
sustainable. We are delivering on our election commitments which takes the
total investment in transport infrastructure in every state and territory in
this Budget at $55 billion over the forward estimates for new and existing
projects…
… [O]ur first Budget takes an important step to make our
infrastructure pipeline more sustainable and to ensure we don’t further strain
a sector already facing labour constraints, inflationary pressures and cost
increases due to supply chain challenges.
Budget
Measures: budget paper no.2: October 2022–23, notes that $2.8 billion
has been re-directed ‘from the cancellation and reallocation of projects under
the Infrastructure Investment Program, Urban Congestion Fund and Commuter
Carpark Fund, the cessation of the National Faster Rail Agency and existing
resourcing of the Department of Infrastructure, Transport, Regional
Development, Communications and the Arts’ (p. 161).
In addition, the Government is ‘re-profiling’ (that is, delaying)
‘$6.5 billion of funding for existing projects within the Infrastructure
Investment Program to beyond the forward estimates, to better align the
investment with construction market conditions, while maintaining the
Government’s overall funding commitments to the projects’ (Budget
paper no. 2, p. 161).
Whilst these general statements from the October Budget give
some broad directions to funding flows they do not provide any insights into what
projects will be funded and when.
Added, re-confirmed, delayed and
abolished individual projects
This section summarises the currently available information
on the new infrastructure projects added and the Coalition-era
infrastructure projects that have been re-confirmed, delayed or abolished.
The October 2022–23 Budget does not clearly report the
status of each Coalition-era project that has been re-confirmed, delayed or
abolished so some uncertainty remains for individual projects. As reported in an
October 2022 Courier
Mail article, this has caused confusion in the community as to the
status and starting date of particular projects. Similar sentiments were echoed
by the
Australian newspaper:
The government has shown poor transparency on budget day by
not outlining each project which will be cancelled or delayed, with even
department officials claiming they were not privy to that level of detail.
According to the Courier
Mail, the Minister for Infrastructure, Transport, Regional Development
and Local Government was ‘scheduled to write to her state and territory
counterparts on Tuesday night outlining which projects had been felled by
Labor’s razor gang, which had been deferred indefinitely, and which were safe.’
New infrastructure projects added
in the October 2022–23 Budget
The October 2022–23 Budget included new commitments totalling
$10.3 billion, as set out in Table 3. The largest of these commitments
include:
- $2.2 billion for the Suburban Rail Loop in Victoria (the
funding was committed before this project was assessed by Infrastructure
Australia, the Australian Government’s independent adviser on infrastructure—the
Victorian
Suburban Loop Rail Authority (the project proponent) is yet to provide a
detailed business case to Infrastructure Australia for evaluation)
- $1.5 billion for the Middle Arm Sustainable Development
Precinct near Darwin
- $586.4 million for a major upgrade of the Bruce Highway
through Brisbane’s northern suburbs
- $565 million for enabling infrastructure in the Pilbara to
support green industries
- $540 million to upgrade major road corridors in Tasmania
- $500 million for planning, corridor protection and early
works for the Sydney to Newcastle section of the proposed high-speed rail
network
- $440 million to build regional logistics hubs in the
Northern Territory
- $400 million to upgrade the Dukes, Stuart and Augusta highways
in South Australia
- $350 million to upgrade the Northern Territory section of
the Tanami Road and the Central Arnhem Road.
Table 3 New infrastructure
project funding announced in the October 2022–23 Budget
(a) Parliamentary Library calculation.
Re-confirmation of Coalition-era commitments
in the October 2022–23 Budget
The October 2022–23 Budget reconfirmed some Coalition-era
commitments (Table 4). In addition, the Minister for Infrastructure, Transport,
Regional Development and Local Government indicated in a media
release that the ‘Australian Government
will honour existing City and Regional Deal commitments’.
Table 4 Reconfirmed infrastructure
project funding announced in the October 2022–23 Budget
(a) Parliamentary library calculation.
Coalition-era infrastructure
projects delayed
The October 2022–23 Budget also delayed several
Coalition-era infrastructure projects (Table 5). Following the Spending
Audit, the Government announced that it was ‘deferring funding’ of a range of
projects under the National
Water Grid Fund. This funding deferral is expected to generate savings of
$899.5 million for the Budget year and the forward estimates (2022–23 to
2025–26). The water projects affected by the deferral include:
- Dungowan Dam and Pipeline
- Emu Swamp Dam and Pipeline
- Hughenden Irrigation Scheme
- Wyangala Dam Wall Raising.
According to Budget
paper no. 2, these projects are ‘to be reconsidered
once business cases are completed and viable pathways to delivery are
determined and assessed’ (p. 63).
It is unclear what is happening with the
proposed Urannah Dam in Queensland. The Coalition made a $483 million
funding commitment in March 2022, but the October 2022–23 budget
papers do not provide a status update. The Australian
Financial Review suggests the dam has been scrapped. This seems
probable given that the Regional
ministerial budget statement 2022–23 (pp. 38–39)
indicates the Australian Government has committed $811 million over 5 years
from 2022–23 to the following water infrastructure projects:
- Paradise Dam
Improvement Project (Qld) – $600 million
- Cairns Water Security
Project Stage One (Qld) – $107.5 million
- Mount Morgan Water
Supply Project (Qld) – $3.5 million
- Tasmanian Pipeline to
Prosperity Tranche Three projects – $100 million.
The Regional ministerial budget statement also indicates
that Paradise Dam’s $600 million funding was not deferred. This is
consistent with Labor’s
election commitment, which matched the Coalition’s
earlier funding
commitment in the Bundaberg region. Paradise Dam funding
was subsequently confirmed in a general water infrastructure media
release and a more specific Paradise Dam media
release by the Minister for the Environment and Water.
No information
was provided in the budget papers on other projects that may have been deferred
or the extent to which they were reprofiled. Non-government senators sought
greater clarity on specific projects from the Department of Infrastructure,
Transport, Regional Development, Communications and the Arts during Senate
Estimates hearings held on Friday 28 October 2022. These
hearings provided further information about other delayed projects.
Table 5 Infrastructure
projects delayed in the October 2022–23 Budget
| Project Name |
Location |
Previous
Coalition funding announcement |
| Dungowan Dam |
Tamworth,
NSW |
$433
million |
| Emu Swamp Dam |
Stanthorpe,
Qld |
$42
million |
| Hughenden Irrigation Scheme |
Hughenden,
Qld |
Not
found |
| Wyangala Dam Wall Raising |
Central
West, NSW |
$325
million |
| Sum of all projects
(approximate) |
|
>$800.0
million(a) |
(a) Parliamentary Library calculation.
Source: Australian Government, Budget
measures: budget paper no.2: October 2022–23, p. 63.
For example, the Rockhampton Ring Road was expected to start
in late 2022 and be completed in early 2026. At the Senate
Estimates hearings, following a question from Senator Canavan, an executive
from the Department of Infrastructure, Transport, Regional Development,
Communications and the Arts stated its commencement had been deferred by three
years and outlined its reprofiled funding:
… it certainly wasn’t terminated. It has been deferred.
2025–26 is $31.6 million, 2026–27 is $164.8 million, 2027–28 is $180 million,
2028–29 is $168 million and 2029–30 is $232.5 million (p. 65).
On 31 October 2022 the
West Australian reported that the Minister for Infrastructure said
that ‘further details [of the delayed projects] will be released in due course’.
The newspaper also revealed that 7 projects worth around $1 billion that
aimed to make WA roads safer and less congested had been delayed between 12 and
24 months including:
Coalition-era infrastructure projects
and programs abolished
The October 2022–23 Budget abolished several Coalition-era
infrastructure projects and programs (Table 6).
Table 6 Infrastructure
projects and programs abolished in the October 2022–23 Budget
| Project Name |
Location |
Previous
Coalition funding announcement |
Reference |
| Hells Gates Dam |
Townsville,
Qld |
$5.4
billion |
Australian Government, Budget
paper no. 2, October 2022–23, 63 |
| Building Better Regions Fund |
regional
Australia |
Not
found |
Australian Government, Budget
paper no. 2, October 2022–23, 164 |
| Urban Congestion Fund |
urban
Australia |
Not
found |
Australian
Government, Budget
paper no. 3, October 2022–23, 12 |
| East–West Link project |
Vic |
$4.0
billion |
Australian
Government, Budget
paper no.1, October 2022–23, 260 |
| Extension of Roe Highway (Freight
Link) |
WA |
$1.2
billion |
Australian
Government, Budget
paper no.1, October 2022–23, 260 |
The Government has indicated that it will not be proceeding
with funding of $5.4 billion for the Hells Gates Dam project in Queensland (see
Budget
paper no. 2, p. 63). As mentioned above, it is not clear whether
the Urannah Dam funding of $483 million has also been scrapped.
The Government stated that the Urban Congestion Fund has
been abolished and that all remaining projects have been reassigned as discrete
projects within the Infrastructure
Investment Program (see Budget
paper no. 3, p. 12). However, it is not clear from the budget
papers whether all projects will be reassigned, particularly if they were only
in the planning stage. According to a media
release from the Minister for Finance, the abolition of the Urban Congestion
Fund (including the Commuter Carpark Fund) generated $671 million for
alternative spending opportunities.
The Government indicated that the Building Better Regions
Fund (BBRF) had been abolished in response to the Spending Audit (Budget
Measures: Budget paper no. 2, p. 164). According to a media
release from the Minister for Finance, the abolition of the BBRF generated
$252 million for ‘spending redirections and reprioritisations’.
The East–West Link Project in Victoria and the extension of
Roe Highway in Western Australia (previously known as the Perth Freight Link
Project) were also abolished. These projects were conditional on the relevant
state governments committing funding. Both projects had been included in each
Budget since 2014–15; and have contributed to the $120 billion 10-year
infrastructure investment pipeline claims. However, neither state government
agreed to fund these projects and they are no longer counted in the total.
Senate Estimates also revealed 3 Australian Capital Territory
road projects were also abolished. At the Senate
Estimates hearings, following a question from Senator McKenzie, an
executive from the Department of Infrastructure, Transport, Regional
Development, Communications and the Arts stated:
The only other jurisdiction where there were cancellations
[in the Infrastructure Investment Program] was the ACT. In the ACT, the Canberra–South
West corridor upgrade package was $50.9 million. The Kings
Highway corridor, which is an ACT–New South Wales border corridor was $30
million. The Boboyan
Road Upgrade was $5 million (p. 11).
On 29 October 2022 the Canberra
Times subsequently reported that the 3 road projects had been scrapped
and the funds reallocated to Stage
2A of the Canberra Light Rail project.
All online articles accessed October 2022
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