'Good election news: No more fake government infrastructure ads' by Michael Pascoe, The New Daily
There’s immediate upside in the unofficial election campaign becoming official: It should mean no more misleading, taxpayer-funded election advertising about federal infrastructure investment.
Despite the impression the government ads tried to give, no, the Morrison government has not increased real infrastructure spending.
And the vast majority of the cranes and lollypop people working on transport infrastructure around the nation are being funded by state governments, not the feds.
The blatantly political ads were annoying before the federal budget, as was Treasurer Josh Frydenberg’s claim to be boosting the federal infrastructure spend.
They’re still annoying because the boost is fake.
In real terms, the treasurer is only promising to restore federal spending to a bit less than what former treasurer Joe Hockey promised five years ago.
And there’s another problem: The projects the federal government chooses to spend money on.
There’s a tendency to select the project first and try to get Infrastructure Australia to justify it later.
Ready, fire, aim!
Nearly all media swallowed Mr Frydenberg’s budget night line of “increasing” the federal infrastructure pledge to $100 billion, albeit over 10 years.
This was an advance on former treasurer Morrison’s promise of $75 billion over 10 years, which in turn had been given a little snake oil treatment to sound better than Mr Hockey’s promise of $50 billion over six years. It wasn’t.
Barnaby Joyce’s pet project, inland rail, was singled out as an example of a political project and belatedly trying to justify it with a business case. Photo: AAP
You can see the pattern here of picking a big figure and adding up how ever many years are required to justify it, thus making promises about spending three elections away.
What everyone but The New Daily missed is that the latest “big number” only goes close to getting back to Mr Hockey’s original smoke-and-mirrors effort.
As explained here on budget night, tucked away at the end of a bigger story: The big “$100 billion over 10 years” obviously is an average of $10 billion a year. Joe Hockey’s 2014 budget promised $50 billion over six years – $8.3 billion a year.
By the middle of Mr Frydenberg’s grand decade – 2024 – the $10 billion spend will represent compound growth of 1.9 per cent over Mr Hockey’s $8.3 billion a decade earlier.
That’s about the inflation rate. And the construction inflation rate has been running ahead of the consumer price index.
Mr Frydenberg is not promising any real growth in federal government infrastructure investment. He’s only going to stop cutting it the way Mr Morrison did.
By way of comparison, the NSW government alone is spending $90 billion on infrastructure over four years.
And Mr Hockey deserves credit for the “asset recycling program” – tax incentives for state governments to privatise assets and use the money for new investments. That program is no more.
How the federal money gets spent is another worry.
Graham Bradley is chairman of Infrastructure NSW. Speaking after the budget at the KPMG/Australian British Chamber of Commerce breakfast, he highlighted the problem of the feds picking a political project and belatedly trying to justify it with a business case.
Mr Bradley cited one of the federal government’s biggest spends as an example: Barnaby Joyce’s pet inland rail.
A smaller but sharper example is the $155 million of federal money pledged by Malcolm Turnbull before last year’s budget for a new bridge across the Shoalhaven in the very marginal NSW seat of Gilmore.
Some of the government’s announced projects are low on Infrastructure NSW’s priority list. The Shoalhaven bridge didn’t even make the list.
The irony is that the MP whom Malcolm Turnbull was trying to save, Ann Sudmalis, subsequently decided to quit Parliament anyway.
Labor claims the government has been going through taxpayers’ money on dodgy election ads at the rate of $5 million a week.
The government claims it’s not that much, but has refused to disclose how much.
On the dodgy infrastructure ads, the stuff of failed marketing stunts, any amount is outrageous.
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