26 Sep

'Construction industry benefits from steady pipeline of projects' Department of Infrastructure, Regional Development and Cities

Industry will benefit from news the green light has been given for works to start on the first section of the 1700 kilometre Melbourne to Brisbane Inland Rail. This follows environmental approvals for the Parkes to Narromine section by the Australian and New South Wales governments, announced in early September 2018.

The Australian Government is investing $9.3 billion in Inland Rail and $5.3 billion in the new Western Sydney Airport.

Work now underway on these two nation-shaping projects prompts the question of how the flow of public infrastructure projects is managed to guard against a boom and bust scenario for industry.

The job of advising Government on this rests, in part, with the Department of Infrastructure, Regional Development and Cities and officials engage actively with industry stakeholders on these and other issues to ensure that advice to Government is well informed. For example, they are a sponsor of the three day Infrastructure Catalyst 2018 event in Sydney, organised by the Australian British Chamber of Commerce.

The Government also receives independent advice from Infrastructure Australia and, on financing options, from the Infrastructure and Project Financing Agency.

These policy advice arrangements are in line with the Australian Government’s investment principles: –

  • projects are subject to a robust business case assessment process before the investment amount is finalised and funding starts to flow
  • our investments are predicated on state and territory governments providing their fair share of funding (50 per cent in urban areas; 20 per cent in regional areas)
  • opportunities for private investment and value capture are explored to reduce the call on Commonwealth grant funding.

Industry and the community have long called for the Australian Government to do more in the infrastructure space: to provide more long-term certainty, move beyond the short-term political cycles and put in the place the reforms which maximise the opportunities for community and private sector involvement in nationally significant infrastructure.

Through the 2018-19 Budget, the Government has not only renewed its commitment to invest over $75 billion but also identified our priority transport infrastructure projects to be delivered over the next decade.

This level of steady investment is driven by a number of factors, including Australia’s growing population – forecast to top 29 million within the decade – of which the majority will occur in Australia’s major urban centres.

This is a challenge and an opportunity.  Our urban centres remain the economic engine rooms of the economy, generating over 80 per cent of our total economic activity, but are increasingly congested.

Meanwhile, our domestic freight task is growing rapidly – by 26 per cent by 2026 – driven by our critical agricultural and mining sectors in regional Australia.

Maintaining and improving on Australia’s high quality of life means building the Australian transport networks that can maximise the benefits of these trends, while helping manage the costs.

So, for the first time the Australian Government has committed to a credible, decade-long Pipeline of infrastructure projects focused on driving economic growth, increasing productivity and connectivity, and creating new employment opportunities.

These investments form a coherent plan for Australia’s transport infrastructure future – they represent the projects and upgrades that will help shape our cities and define our regions.

This commitment builds on the Australian Government’s existing record levels of investment, recognising that in order for the Australian economy to continue to grow and be competitive, a steady flow of infrastructure investment must remain a core focus for the Government.

The Pipeline signifies a shift from the Australian Government’s historic approach to investment in transport infrastructure, where the Commonwealth was regarded as simply a source of funding for state priorities as they arose.

This Pipeline includes new major project commitments across Australia, with funding for key regional freight corridors and for targeting congestion in our cities.

However, the Australian Government cannot do this alone. It will lead the development and delivery of the projects with other partners like the States and Territories, local governments and the private sector.

The Australian Government has a key role in supporting and enabling wider investment and help  sustain and expand our world-class construction sector.

Without the Government’s injection of infrastructure funding, construction activity would suffer a significant decline by the early 2020s.

This would harm the retention of a skilled local construction sector and forgo the creation of around 50,000 new jobs, it would also create a backlog of necessary hard infrastructure upgrades.

The Government believes now is the right time to deliver this major, long-term investment strategy.

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