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Budget 2017: wishful thinking

While Scott Morrison’s 2017 Federal Budget has been praised for some of its big announcements for freight and infrastructure, the shortage of immediate commitment has earned it the moniker of the “planning to plan budget”.
The positive
The Australian Logistics Council’s Michael Kilgariff heaped praise on the budget.
“The Government should be commended for making clear commitments to two significant infrastructure projects crucial to the freight and logistics industry,” said the ALC managing director.
“The transformative potential of the Inland Rail project has been talked about for decades, with incremental progress being made over the past several years, including a positive assessment of the business case by Infrastructure Australia. The $8.4 billion commitment announced in the Treasurer’s speech will finally allow its construction. At long last, we can stop merely talking about this project’s potential, and instead begin to witness it.
“Establishing a safe, reliable port-to-port rail link for freight between Melbourne and Brisbane is the only way we can simultaneously meet Australia’s burgeoning freight task, alleviate congestion on existing freight networks, create regional jobs and boost growth,” he said.
“To fully unleash the benefits of this project, the line must run to the ports of Melbourne and Brisbane, and comprise efficient rail linkages to the ports of Botany, Kembla and Newcastle in NSW. We must also support the development of intermodal freight hubs at appropriate intervals along the route.”
The Australian Railway Association was more reserved.
“The Government’s renewed commitment to rail, including through its $10 billion National Rail Program for urban and regional passenger rail, underscores its importance to Australia and is welcomed by the rail industry,” said Danny Broad, chief executive officer of the ARA.
“Inland rail is fundamental to boosting rail freight efficiency in Australia, and given Australia’s freight task will grow 26% by 2026, its delivery is important to all Australians.
“We note the Government’s intention for a public private partnership to progress the Toowoomba to Kagaru tunnel section, which is the most challenging aspect of this project.
“While this capital injection into the ARTC is welcomed, the fact remains that significant work needs to occur to ensure the Inland Rail project comes to fruition.”
The negative
While the commitment to build Sydney’s Badgerys Creek airport was generally welcomed, the lack of any commitment to building a rail link to the airport, which will be some 60km from the Sydney CBD, was loudly noted by many.
And both South Australia and Queensland were vocal in their displeasure of the budget’s infrastructure allocation for their states.
“Scott Morrison is writing undated cheques with no figures filled in,” Queensland Treasurer Curtis Pitt said. “Instead of solid funding commitments we repeatedly see a plan for a plan.
“We have no firm funding commitment for Cross River Rail despite the Turnbull Government already having our business case.”
Mr Pitt said the Budget’s forward estimates only include $600 million of allocation for this National Rail Project, and that funding is not until 2019-20 and 2020-21.
“The Budget says projects such as Cross River Rail and the Lord Mayor’s Brisbane Metro could potentially be supported through the program subject to a proven business case,” he said.
“The Budget also mentions a list of other potential multi-billion-dollar projects such as Adelink, Tullamarine Rail Link, and the Western Sydney Airport Rail Link, so it seems we will need to fight off projects in other states to get even a small share of the new funds.
South Australian Treasurer Tom Koutsantonis was equally scathing: “This Federal Budget completely ignores South Australia in favour of voters in the Eastern states and WA,” the state treasurer said.
“Of the $70 billion allocated for infrastructure, SA will receive no new funding. No new projects, no new roads … further extensions to the AdeLINK tram network … and the completion of the Gawler Electrification are ready to be progressed.”
And the last word…
… must go to Megan Motto, chief executive of Consult Australia. In a statement entitled “Infrastructure budget 1.0 begs for a budget 2.0”, Ms Motto said: “This was a budget big on planning for longer term infrastructure dividends.
“It recognised infrastructure as a tool to increase productivity, the importance of business case development to get the right projects off the ground, and the role of government in being able to drive economic growth.
“Over $14 billion of direct government equity in major infrastructure delivery and financing agencies. Major projects like Snowy Hydro, Inland Rail, a National Rail Program, and Western Sydney Airport, all point to a government that understands the long-term nature of infrastructure projects.
“Yet in the short term there is a sense of missed opportunity.
“Historically low bond rates and a triple-A credit rating means there has never been a better time to borrow, to take on more good debt, yet as share of GDP spending will drop from 25.5% to 25.2% in 2020-21.
“Real spending on infrastructure delivery will fall.”

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