The 2014-15 Budget delivered by the Abbott Government promises investment into a critical Infrastructure Growth Package, expected to help create jobs, strengthen the economy, ease congestion, and cut travel times.
The Budget outlines spending of around $50 billion over the next six years on roads, rail and ports. Altogether, the big projects when completed are forecast to add 1 percentage point to Gross Domestic Product.
The Abbott Government has promised to provide an initial $5.9 billion to an Asset Recycling Fund to build productive infrastructure, which will begin on 1 July 2014.
That fund will receive further contributions following the sale of any Commonwealth assets and are expected to unblock debilitating bottlenecks that hinder Australia’s productivity and increase business costs. The investment is expected to leverage nearly $40 billion in additional infrastructure.
Proceeds from the sale of existing assets are intended to be recycled into new infrastructure, as well as expedite nationally significant projects across the country. Total infrastructure investment from Commonwealth, state and local government as well as the private sector is expected to build an additional $125 billion by 2019-20.
The initial contribution of $5.9 billion will be uncommitted funds from the Building Australia Fund and the Education Investment Fund. Further contributions will be made through the proceeds from privatising Medibank Private and from other asset sales, which may include Defence Housing Australia, the Royal Australian Mint, and the registry services of the Australian Securities and Investment Commission, among others.
Payments will be made to states and territories under the Infrastructure Growth Package, and are expected to help strengthen their balance sheets through recycling capital into a dedicated funding source to build new infrastructure.
The six pages of infrastructure spending details include investment initiatives in NSW and Western Sydney totalling $14.9 billion by 2019-20. Queensland has four pages and $13.4 billion – Victoria has two pages and $7.7 billion committed. Projects include:
- Stage 2 of the East West Link in Melbourne
- North-South Road Corridor in Adelaide
- Toowoomba Second Range Crossing in Queensland
- The Perth Freight Link
- Northern Territory road upgrades
- $229 million for a new National Highway Upgrade Program
- An additional $200 million to the Black Spot Program
- An additional $350 million to the Roads to Recovery Program
- Another $2.9 billion to Badgerys Creek airport in Western Sydney
Treasurer Joe Hockey said the infrastructure spending would help "fire up the rest of economy", as investment in the mining sector tapered.
“Our Growth Package will stimulate the construction sector and create thousands of jobs as the economy transitions from resource-led growth to broader-based growth,” said Hockey.
“This new infrastructure will drive and support the next wave of national prosperity.”