The budget’s infrastructure announcements are pleasant, but not exciting.
Certainly, the government’s infrastructure plans received a major jolt from the global recession. In his 2008-9 Budget, Treasurer Wayne Swan heroically announced a major stimulus to Australia’s infrastructure rollout through the Building Australia Fund. This fund was to be financed by an injection of $40 billion. Of this $20 billion was to be spent on transport and communications infrastructure. These not inconsiderable sums were to have come from anticipated budget surpluses.
But, of course, the surpluses never eventuated. What we are left with, instead, is a fairly modest government contribution to infrastructure spending. Very little of the $22 billion infrastructure package will be spent in 2009-10. Most will be forthcoming in the years when the economy is predicted to be expanding once more.
The government has been aware of its infrastructure funding plight for some time. Twelve months ago it would have planned to make a big deal of a favoured list of projects arising from the Infrastructure Australia selection process. Instead, on budget night this week Infrastructure Australia quietly dropped its final report on its web page leaving the treasurer to announce a limited number of relatively inexpensive projects in his budget speech. Infrastructure minister, Anthony Albanese, watched on, shrugging off the disappointment of what might have been.
The chosen infrastructure projects are what you would expect from a complex, staged selection process: a national call for proposals; a cull by Infrastructure Australia bureaucrats and its 11 member expert panel; a final list filtered through the federal Department of Infrastructure; its evaluation by Treasury; and a final decision by a small political scrum involving, probably, prime minister Rudd, treasurer Swan, finance minister Lindsay Tanner, infrastructure minister Albanese and, perhaps, deputy prime minister Julia Gillard.
What was announced in the budget reflects the cumulative weight of these bureaucratic and political deliberations.
Primarily, we should be aware that what Australia got from the process is a list of projects, not a solution to our infrastructure crisis. The infrastructure crisis has a number of dimensions: funding, approval processes, coordination, the nature of public-private partnerships, pricing mechanisms, sustainability outcomes and maintenance responsibilities. These issues still need addressing. Infrastructure Australia still has much work to do.
That said, there are some clear patterns in the budget announcements. The orderliness of the list is quite enchanting. In respect of the rail projects, we see a clear preference for projects that build capacity for people movements across the major metropolitan areas — with the exception of Sydney — mostly involving improved passage through the suburbs from nearby regional areas.
In respect of road projects, we see a clear focus on building the capacity and efficiency of highway one along Australia’s east coast especially as a freight transit facility. Here, though, we see the continuing reluctance of the feds to have anything to do with major roads once they reach inside the boundaries of the capital cities.
Another common element across the chosen projects is that they do not involve difficult planning and approval processes. This is typical Rudd-Swan politics: do good things, but not bold things; go forward, but not radically; build and strengthen the nation, but don’t alter it much.
The road and rail announcements add up to $8.5 billion expenditure over three or four years. It’s a significant agenda, but nothing history will judge as transformational.
Then there is the already-announced National Broadband Network (NBN) initiative. The government allocates $4.7 billion to kick off this scheme. In contrast to the road and rail announcements, the NBN is uncharted territory. If this was a state scheme it would have been rejected by Infrastructure Australia for a lack of detail and proper planning. Communications minister Stephen Conroy has much to do. Maybe this is where his government can pull off something adventurous.
Finally, there is the curious case of Sydney. For once in modern political-economic history, the Emerald City is looking on. Whitlam’s city, Keating’s city, Howard’s city, Labor’s homeland city, got nothing from the infrastructure announcement. There is much untold about this extraordinary snub. On post-budget morning NSW Treasurer Eric Roosendaal explained the Rudd-Swann brush-off by claiming his state was already spending big on infrastructure, and that the other states needed federal assistance more than his state.
The only thing stopping Sydneysiders collapsing with mirth at the Roosendaal statement is that they stopped being amused by NSW Labor ministers a long time ago.