The 2014 federal budget has set Tony Abbott on the self-appointed path of becoming the infrastructure prime minister.
The budget outlines spending of about $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.
As Treasurer Joe Hockey says: “Shovels will start moving within a matter of months.”
Much of the funding will come from reintroducing indexing of the fuel excise, an effective tax on road users, and from future federal asset sales such as Medibank Private.
The government is targeting transport bottlenecks which are a drag on business and communities.
“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,” Hockey says.
“This new infrastructure will drive and support the next wave of national prosperity.“
The Infrastructure Growth Package in the budget provides an additional $11.6 billion. This will bring the Government’s investment to $50 billion by 2019-20 which, combined with state and private sector funding, will drive over $125 billion of additional infrastructure investment nationwide.
The budget package consists of a $5 billion Asset Recycling Initiative to unlock capital from state and territory assets, an additional $3.7 billion for the Infrastructure Investment Programme and $2.9 billion for the Western Sydney Infrastructure Plan.
These initiatives are designed to expedite critical infrastructure, create real activity at a time when the economy is going through a significant transition, and boost long-term productivity and living standards.
The Government is reintroducing indexation of fuel excise from August 1 to create a more stable source of Commonwealth road funding. The Asset Recycling Fund will be set up July 1 to facilitate the Government’s investment in new infrastructure.
It will include unspent funds from the Building Australia Fund and Education Investment Fund and proceeds from the sale of Medibank Private and other possible privatisations. A substantial amount of the new funding will go to major roads and highways.
- 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 Programme;
- An additional $200 million to the Black Spot Programme
- A further $350 million to the Roads to Recovery Programme.
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