Hundreds of Coalition government’s infrastructure projects under scrutiny in new review
An obsession with “pork barrelling” has rendered Australia’s infrastructure pipeline ineffective, prompting a wide-scale review.
Federal Budget
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The former government’s “obsession with pork barrelling” has left Labor with no choice but to commission a wide-scale review of hundreds of infrastructure projects across the country, Anthony Albanese says.
Projects big and small will be probed, and some potentially scrapped, as part of a 90-day independent review announced by Infrastructure Minister Catherine King.
The 10-year, $120bn infrastructure pipeline has blown out from 150 projects in 2013 to nearly 800, including many “press release projects” announced by subsequent Coalition governments without adequate funding.
With Australia’s core inflation rate now sitting higher than any G7 country, and infrastructure projects routinely suffering cost blowouts, the Prime Minister said his government was committed to being a party of nation building.
“The former government was obsessed with pork-barrelling. What we’ve been obsessed with is delivering productivity-enhancing projects,” he said.
“There are no cuts in the budget in eight days’ time. All the funding that had been allocated is still there – but we want to make sure that the sort of disasters that have occurred, whereby projects that might have cost hundreds of millions of dollars, $80m or $50m attached to them – with no prospect of being included.
“The other thing that was occurring was that projects were being announced with no consultation with state governments, with no state government funding, that couldn’t possibly be delivered as well.”
Supply chain pressures are also drastically forcing up the cost of major projects, with many needing additional funding to ensure timely delivery. Meanwhile, there is a shortfall of about 95,000 workers on public infrastructure projects across the country.
Ms King said projects already under construction would proceed.
But the Australian Constructors Association has expressed “serious concerns” that the review will result in significant cancellations and deferrals.
“Delivery of infrastructure is not like a tap. It can’t simply be turned on and off,” chief executive Jon Davies said.
“It is vital that industry is consulted in the review to avoid inflicting further pain on an industry that is already doing it tough as a result of having to absorb significant rises in material and labour costs.
“If projects are cut, governments must take action to reallocate a proportion of the saved funds to help industry by compensating contractors who have incurred significant additional costs without any fault of their own and currently lack contractual relief.
“Construction currently accounts for 26 per cent of all business insolvencies in Australia and the implications of these failures on the wider economy are huge.”
Ms King said if any projects were deemed undeliverable, money could be routed elsewhere.
While the government has not committed to any savings target, Finance Minister Katy Gallagher on Sunday said the government had found billions more in savings ahead of next Tuesday’s budget.
Ms King said the review was prompted by discovering projects committed to by the previous government were left without adequate funding or resources, projects that offered little benefit to the public were approved, and the “clogged” pipeline caused delays and overruns in more important, nation-building projects.
Claims of “pork barrelling” by the former governments are somewhat reinforced by the 160 projects in the pipeline worth less than $5m.
“A properly functioning infrastructure investment pipeline means projects can be delivered with more confidence about timeframes and budgets,” Ms King said.
“Easing the pressure on the construction sector will help drive inflation lower and deliver more predictable investment and delivery outcomes from governments.”
She said the government was committed to maintaining significant infrastructure investment for the medium term.
Labor’s election commitments will not be among the projects up for scrutiny.
“Communities will benefit from national significant infrastructure with shorter and safer travel, more liveable cities, suburbs and regions, while the economy benefits from the certainty brought by a smoother delivery of investment matched to project timelines,” she said.
“It is time to clean up the mess left by the Liberals and Nationals clogging the pipeline with ‘press release projects’ – announced but unable to be delivered.
“This review will put confidence back into the investment pipeline, benefiting the states and territories and the communities we all serve.”
The review was agreed to by state and territory governments when national cabinet met on Friday, with those governments to be consulted, and given the chance to have their say, throughout the review period.
The review will be undertaken by former public servants and land transport infrastructure experts Reece Waldock AM, Clare Gardiner-Barnes and Mike Mrdak.
Originally published as Hundreds of Coalition government’s infrastructure projects under scrutiny in new review
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