Federal Minister for Urban Infrastructure Paul Fletcher has made an impassioned case for the federal government’s investment in critical infrastructure, stressing that it’s not just how much the Commonwealth invests that matters, it’s “how we invest”.
Mr Fletcher’s fervent defence of the government’s infrastructure investment at the Australian Financial Review’s Infrastructure Summit in Sydney came was a key presentation, explaining the process of debt and equity investment into projects.
Some projects using this method included the federal government’s commitment to a $5.3 billion equity investment in the Western Sydney Airport, and an $8.4 billion equity investment to fund the Inland Rail project.
Despite those investments, the government has come under heated criticism from the Labor Opposition that the 2017-18 Federal Budget imposed a reduction in infrastructure spending.
“In fact, it is a once-in-a-generation, $75 billion infrastructure budget that sets a long-term vision for our future and commits to game-changing infrastructure projects across the nation,” Mr Fletcher said.
However only less than a week after Mr Fletcher’s presentation to the AFR Summit, Shadow Minister for Infrastructure Anthony Albanese, commented on the Parliamentary Budget Office’s (PBO) confirmation that the Coalition has slashed infrastructure investment by half.
According to the PBO the Coalition will slash rail and road infrastructure investment by half over the next decade, from 0.4 per cent of GDP in 2016-17 to 0.2 per cent of GDP in 2027-28.
The PBO’s latest report said Commonwealth investment in railways and roads will “fall off a cliff” under the Coalition, declining by 4.5 per cent a year.
“The Coalition’s infrastructure cuts could not come at a worse time for the Australian economy,” Mr Albanese said.
“As our nation’s mining industry moves from its investment stage to production, it is critical that we increase investment in railways, roads, ports and other infrastructure to encourage growth in other industries and underpin economic and jobs growth.”
He accused the Coalition of doing the opposite – “cutting investment while pretending otherwise and banking on the private sector to pick up the slack”.
Mr Albanese cited the PBO figures as a vindication of the Opposition and the private sector’s criticism of the 2017 Budget.
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