Transport & Logistics

Winners and Losers of the Federal Budget 2013/2014

17 May 2013, by Informa Insights

The release of the Federal Budget on Tuesday the 14th May, has brought about questions on whether or not state governments will match expenditure dollar for dollar. The winners and losers of the budget have been welcomed in the media; but Treasurer Wayne Swan states that the focus of his latest budget will be to maintain a surplus and implement spending cuts.

This year’s budget has been particularly controversial, as the Opposition Leader Tony Abbott has criticised the budget for making ungrounded promises. Half way through an election year, there is also no guarantee that a Coalition Government will commit to many of the proposed budget allocations.

OVERLOOK
With $24 billion of the Federal Budget being allocated to infrastructure expenditure over five years, experts have hailed the government for including the need for private investment in this year’s budget. The inclusion of public-private partnerships (PPPs) has received mixed reviews as the Institute of Chartered Accountants Australia has warned against them, while the Industry Super Network has pledged their support for them.

One thing that is for sure is that this budget has brought about the age-old debate on funding for railway versus funding for roads. This year’s budget left out any funding for the East-West Link in Melbourne; a priority project for the state Victorian Government. Similar situations have arisen in NSW and WA, as states are trying to contend with which projects to prioritise while also adjusting to a reduction in GST revenue.

So what are some of the industry responses to such a complex budget release? And which projects have been prioritised by the Federal Government. We’ve broken down the budget allocations by state, and prepared an outlook from key players in the industry.

SA

  • $448 million to upgrade the South Road
  • $31.5 million for the Tonsley Park Public Transport Project
  • $8 million to install an Advanced Traffic Management System on the Eastern Freeway
  • $85 million for upgrades to the Stuart Highway and Pukatja

There are mixed reviews in South Australia amidst the release of the Federal Budget, as Premier Jay Weatherill is pleased about the investment the Federal Government has given South Australia for infrastructure projects, but is disappointed the GST revenue will fall $300 million. He states: “it is, to say the least, challenging for us to have to deal with such a large revision of revenue in the next five years.”

NSW

  • $1.8 billion for the WestConnex
  • $400 million for the linking of the F3 and M2
  • $195 million to widen the F3
  • $40 million upgrade for Port Botany
  • $75 million upgrade to the Port Botany rail line
  • $60 million for the construction of a Bega bypass
  • $42 million for Mount Ousley Road upgrades

Although funding for NSW may seem adequate, the NSW Business Chamber has stated that NSW is the loser out of this Federal Budget. According to CEO of the NSW Business Chamber, Stephen Cartwright, the funding for NSW just isn’t adequate enough;

“while the Federal Government announced a $20 billion increase in much needed infrastructure spending, NSW will receive just 10% of this, despite representing a third of the national economy.”

He continues; “in fact, $1.8 billion of the funds allocated to NSW is for the Westconnex project, which has no hope of proceeding with the unrealistic conditions that have been attached by the Federal Government to the design of the road and its funding model.”

VIC

  • $3 billion for the Melbourne Metro rail tunnel
  • $525 million for the completion of the Melbourne M80 Ring Road Widening
  • $110 million for the redevelopment of the Port of Hastings
  • $280 million for the maintenance and upgrade of roads
  • $52 million for the removal of railway crossings
  • There will also be a drop in $180 million reduction in GST revenue

Victoria failed to secure federal funding for the east-west link, however Treasurer Michael O’Brian states that the project will still move ahead stating; “we intend to proceed with East West as best we can, but obviously it’s a major road project for this state and we deserve a fair share of federal funding for it.”

This sentiment is not shared by President of the Public Transport Users Association Anthony Morton who has criticised the government for putting roads ahead of rail. “The Victorian Coalition Government, defying everything it said before the 2010 election, is intent on putting roads ahead of rail”.

Victorian Employers’ Chamber of Commerce and Industry Chief Executive, Mark Stone, said there was no reason why the federal government could not have allocated money to both the Melbourne Metro rail tunnel and the East West Link.

QLD

  • $4.1 billion for the Bruce Highway
  • $715 million for the Brisbane Cross River Rail
  • $720 million to upgrade and widen Brisbane’s Gateway North Motorway
  • $2.79 million to widen the Ipswich motorway
  • $317 million for upgrades to the Warrego Highway

The ARA’s CEO, Bryan Nye was encouraging saying that, “With Brisbane’s inner city rail network reaching its absolute capacity within the next five years, this priority ranked project is the only medium to long term solution available that will ensure Brisbane’s entire transport network doesn’t grind to a halt within the decade…With federal funding now in the picture, this could be the best opportunity the Queensland Government will ever have to step up and ensure this project gets underway.”

WA

  • $500 million for the Perth Light Rail
  • $140 million for upgrades to the Tonkin Highway
  • $59 million for upgrades to the Leach Highway
  • $307 million to widen the Great Northern Highway
  • GST returns will drop from 55cents to 45cents in the dollar

There have also been mixed responses in Western Australia to the Federal Budget with President of the WA Farmers Association describing it as a “non-event“.

However, Treasurer Wayne Swan has stated he has committed millions for infrastructure investment in WA. “These investments will boost productivity, build capacity, improve safety and relieve congestion,” he said.

NT

Northern Territory Treasurer, Delia Lawrie is pleased with the allocation of funding for Darwin Port stating: “This will allow a significant expansion of the port’s capacity – including new berthing and ship loading facilities.”

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