Federal Budget 2022: North-South Corridor underfunding revealed
The North-South Corridor’s plagued final stretch remains billions of dollars underfunded in the budget, putting it on a rocky road to being completed. See all the SA road project splurges and delays.
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The final stage of the North-South Corridor remains underfunded as the federal government’s first budget contains no new cash for the project, while nearly $900m of other road investments across the state have been delayed or thrust into doubt.
Budget papers unveiled on Tuesday night showed Labor had kept federal funding for the 10.5km Torrens to Darlington at $4.9bn, despite latest cost projections running as high as $14bn.
The project, equally funded with the state government, has been plagued with controversy and warnings of major blowouts above its original price tag of $9.9bn.
The federal government will spend $2.3bn on the project over the next four years, but could be forced to stump up billions of dollars in extra cash after Premier Peter Malinauskas’s government completes its review of the design later this year.
Last week, Treasurer Stephen Mullighan warned the state would struggle to complete construction unless the federal government stepped in to cover a potential blowout, maintaining its 50:50 funding commitment.
The start of construction has been pushed back from 2024 to 2025, and the completion date also pushed back a year to 2032.
Infrastructure and Transport Minister Catherine King previously said she would “consider any proposal for additional funding in line with usual budget processes”. The federal government is expected to hand down its next budget in May 2023, which would likely contain the full cost of the project.
Tuesday’s budget papers revealed $730m has been slashed from SA’s share of road investment as part of the Infrastructure Investment program over the forward estimates. This fund “targets nationally significant projects that will provide the efficiency and safety of Australia’s road network”.
Infrastructure officials explained many road projects under this initiative had been “re-profiled”, meaning much of the funding had been pushed back beyond 2025-26.
A further $130m earmarked for SA under the national Urban Congestion Fund over the forward estimates has also been cut after the federal government abolished the controversial scheme due to concerns the Coalition was pork-barrelling electorates with commuter carparks.
A planned $30m upgrade of two Brigthon Road intersections at Edwards Street and Wattle Avenue and Dunrobin Road will go ahead after it was transferred from the Urban Congestion Fund to the “Infrastructure Investment Program” as it had “clear benefits”.
“Our first budget takes an important step to make our infrastructure pipeline more sustainable and to ensure we don’t further strain a sector already facing labour constraints, inflationary pressures and cost increases due to supply chain challenges,” Ms King said.
“After discussions with the states and territories, some spending has been moved into future years when the market will have greater capacity to support elevated levels of investment.”
According to a handout by Mr Albanese’s office, the federal government is expected to spend $13.5bn in SA this year – a 10.1 per cent increase on 2021-22 funding levels.
On top of existing infrastructure projects, Labor will spend $8.1bn over 10 years on high-priority rail and road projects across the country, including $400m for vital upgrades to the Dukes, Stuart and Augusta highways in South Australia.
The federal government will also fund a $200m upgrade to fix the notorious bottleneck at the Marion and Cross roads intersection, originally promised by the Coalition in March.
Incognito Cafe owner Brett Dowsett, who travels through the nightmare intersection every day to his business on Anzac Highway, said the upgrade would shave at least 10 minutes off his commute time.
“It’s traffic lights, tram stop, traffic lights in pretty much (every) 100 metres – obviously it takes forever to get through there,” Mr Dowsett, 38, said.
“It just needs the full overhaul, (the level crossing) just doesn’t need to be there because it’s chaos.”
The federal government reaffirmed commitments to establish a Defence Industry Workforce and Skills Taskforce in partnership with SA – but the budget papers did not include any funding.
The taskforce, yet to be fully established, will examine how to build up a workforce capable of building a fleet of highly advanced nuclear-powered submarines.
Environment and Water Minister Tanya Plibersek promised the budget would act on Labor’s election pledge to return an extra 450GL to the Murray-Darling Basin by June 2024 – fulfilling a promise made to SA a decade ago.
However, “significant funding” that was set aside to return water to the environment was hidden from the papers due to “commercial sensitivities”.
Budget papers show $22m has been allocated to “update the science to ensure the impacts of climate change are accounted for in managing Murray-Darling Basin water resources”.
Nearly $30m was also committed to improving metering and monitoring of water use.
“We are delivering over $1.1bn in water infrastructure projects around the country, to help deliver water security to communities and for industry,” Ms Plibersek said.
$1.5bn windfall for SA
South Australia will collect an extra $1.5bn in GST revenue over the next three years.
In the previous budget, the state had been due to receive $31.12bn in the years between 2022-23 and 2025-26.
The budget revises that figure up to $32.6bn.
State GST entitlements were adjusted based on changes to the distribution of the population. The federal government has providedan additional $5.2bn in GST top-up payments over the next three years while the states transition to a new system of distribution.
The transition guarantees that states will be “no worse off” until 2026-27.
The budget said the new system would “reduce volatility in states’ GST payments”.
gabriel.polychronis@news.com.au
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