Federal Budget 2017: Energy investment has big implications but SA Government says infrastructure ignored

CASH will be splashed on a big energy projects that the Coalition hopes will keep the lights on in SA — but the State Government says we’ve been “completely ignored” in infrastructure spending.

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CASH will be splashed on a big energy projects that the Coalition hopes will keep the lights on in SA, as it also hints at a boost for Adelaide’s tram network.

In a Federal Budget heavy on new transport projects for other states, SA’s moment in the limelight comes as the headline act in a $265 million power plan directed at energy security.

Environment and Energy Minister Josh Frydenberg unveiled a $36.6 million pledge for new power infrastructure projects to be delivered in SA over the next two years, as well as a written commitment of up to $110 million in support for a solar thermal plant at Port Augusta.

The energy infrastructure plan, which could bring new baseload renewable power plants or batteries into the grid, is underwritten by other measures aimed at securing more gas supplies.

SA is highly reliant on gas, which became its only baseload technology after the exit of coal.

Mr Frydenberg pledged measures to encourage new gas drilling and support for possible pipelines that could connect the NT and WA to the east coast, via Moomba in SA.

Mr Frydenberg repeated his support for an expansion of NSW’s Snowy Hydro scheme, adding that he was “looking further” at a proposal that would bring the green storage technology to SA.

“The nation’s energy system is undergoing its greatest transition since electricity became widely available in Australia,” Mr Frydenberg said.

“The measures in this package will set Australia up for a modern and dynamic energy system, allowing us to keep pace with changing technologies.”

But a furious SA Treasurer Tom Koutsantonis said the state had been “completely ignored” for new infrastructure funding in the Federal Budget in favour of voters in the eastern states and WA

“This is just more proof that the Coalition just doesn’t care about SA,” he said.

Mr Koutsantonis said he had put forward bids for more South Rd upgrades, tram extensions and sealing the Strzelecki Track that had “all been ignored as there’s billions lavished on other states”.

He said the most disappointing aspect of the Budget was an opportunity for the Federal Government to make a significant investment in Whyalla.

“In the last State Budget, the State Government pledged $50 million in grant funding for the

successful purchaser of Arrium to invest in the long-term steelmaking capacity of Whyalla,” he said.

Tom Koutsantonis is not happy with how SA has been treated in the Budget. Picture: File

“To date the Federal Government has only offered a $50 million loan to support Whyalla,

despite recently earmarking $1 billion to help fund a prospective coal mine in Queensland.”

Repower Port Augusta enthusiastically welcomed the equity funding committed and said it will create up to 1000 construction jobs as well as 50 ongoing positions.

“This $110 million equity commitment to building solar thermal with storage in Port Augusta is great news for the local community and South Australians as it will create new jobs and on-demand solar power” Gary Rowbottom, former power station worker and Chairperson of Repower Port Augusta said.

“With a $110 million equity investment in solar thermal committed by the Turnbull Government, all that is needed to make this happen is for the South Australian Government to commit to purchasing power from solar thermal” Mr Rowbottom said.

Other measures in the energy package include deeper studies of potential risks to waterways from fracking, amid new bans on the practice, and incentives for developing gas for local use.

The focus on SA’s energy crisis comes less than a year before a state election in which the SA Opposition will attempt to capitalise on surging prices and frequent blackouts, and as the Federal Government faces warnings that the disease will soon spread to the eastern states.

The Budget continues funding for three major South Rd projects — the Northern Connector, Darlington Interchange and Torrens to Torrens — as well as more minor regional upgrades.

There is also hope that the Whyalla steelworks could be part of another major national contract and potentially supplying rail for a new $8.4 billion link between Brisbane and Melbourne.

The Federal Budget does not commit new funding to SA’s tram system, despite big new rail spends interstate, but says local projects could be in line for a slice of a new $10 billion pie.

The new “national rail program” will consider bids to back the State Government’s AdeLINK project, which imagines new tram lines to suburbs including Port Adelaide and Henley Beach.

The Federal Budget again shows a huge boom in the amount of money that flows from Canberra to SA through a range of different sources, including the GST.

SA is forecast to receive $9.9 billion from Canberra this year, more than half the State Budget’s $18 billion annual revenue. That figure will surge again in the 2017-18 financial year to a total of $10.6 billion.

The Productivity Commission will report in January on whether the current GST system, which gives SA more money than other states to offset its sluggish local economy, should change.

Senior SA Liberal, Defence Industries Minister Christopher Pyne, said the Budget was also delivering on the $89 billion Adelaide-based plan to build new ships and subs for the Navy.

To help deliver the multi-decade spend, Mr Pyne also announced a crackdown on consultants and contractors used by the department in a bid to save $300 million over four years.

The Budget has also confirmed the establishment of a $100 million fund which will be released to companies to help boost innovation and jobs in advanced manufacturing.

The Government says it will help soften the blow when Holden’s Elizabeth factory closes on October 20.

Apprentices working in under-pressure industries, including carmaking, get access to skilled mentoring under a new $60 million scheme aimed at increasing training completion rates.

Mr Koutsantonis hands down his fourth State Budget in six weeks.

It will be his final before the state election in March next year, and is also expected to have a heavy focus on energy as the State Government rolls out its own power security plan.