More than 700 infrastructure projects set up by the former government face possible cancellation as a three-month investigation is ordered by the federal minister.
- The federal government has warned hundreds of projects announced by the former government may not be possible to deliver
- The infrastructure minister says the previous government did not properly fund the projects
- Their future will be determined after a three-month review
Infrastructure Minister Catherine King said the former government added hundreds of projects to the infrastructure pipeline without committing funding for their completion, including 160 projects with less than $5 million attached.
“A lot of them are completely underfunded,” Ms King told the ABC’s AM program.
“There’s billions of dollars that are needed to actually deliver all of the projects in the pipeline.
“That’s new money we would have to find, and we’re just simply not in a position to say today, ‘Can we deliver each and every one of those projects, and have we got enough money to do so?'”
Since 2013, the Infrastructure Investment Program has grown from about 150 projects to 800, the majority of which have $50 million or less committed to them.
Infrastructure Australia has also estimated public infrastructure projects across the nation are currently short of 95,000 workers, and raw material costs have risen considerably since many of the projects were added to the list.
Shadow minister warns scrapping projects would undermine economy
Shadow Infrastructure Minister Bridget McKenzie told the ABC that cancelling or downsizing projects would undo preparations that had already begun.
“The 10-year infrastructure investment pipeline from the Coalition, was a pipeline investment that was targeted with state governments and local councils, and companies have geared up to actually deliver on that pipeline over the next 10 years, they have bought kit … they have geared up their own workforce,” Senator McKenzie said.
“Any notion that these are wasteful projects shows that the Labor party hasn’t got on the ground and talked to these communities.”
The Infrastructure Investment Program pipeline is not a publicly available document, and the federal government has not stipulated which projects will be reviewed.
Ms King warned that certain projects with limited funding committed were missing a cost-benefit analysis, and those alone could be costly to complete.
“If it’s a small project under $5 million, it can be quite costly to do a cost-benefit analysis — is it worth doing one for it, or is the project just simply not able to be delivered?” Ms King said.
Senator McKenzie said $5 million was “a lot of money in some places”, and those projects were critical to improving the amenity and safety of communities.
“Continually cutting back on infrastructure projects will be a handbrake on economic growth,” Senator McKenzie said.
Projects already under construction and were included in the government’s first budget in October last year are unlikely to be affected.
The inland rail will not be subject to review, as it was recently reviewed separately and recommitted to despite a $31 billion cost blowout.
Senator McKenzie said if it was a genuine review, it would assess all projects in the pipeline, including the Tasmanian stadium, the Mickleham Road upgrade in Melbourne’s north, the Outback Way and upgrades to Port Hedland.
“These are critical projects that are actually going to enhance our productivity over coming decades,” Senator McKenzie said.
“At the very time when the government’s budget repair strategy should actually be to invest in productivity-enhancing capital and cut back on unnecessary recurrent expenditure … Labor seem determined to do the opposite.
“They’re taking the razor to infrastructure projects and failing to address the structural challenges on the spending side of the budget.”
State and territory governments agreed to support the review at a meeting of national cabinet.