Budget 2020: Another $2bn to build our recovery

Scott Morrison will unveil more than $2bn in extra infrastructure projects in Tuesday’s federal budget.

Deputy Prime Minister Michael McCormack, with assistant finance minister Zed Seselja, left, and ACT opposition leader Alistair Coe, announces a $7.5bn infrastructure budget package. Picture: Getty Images

Scott Morrison will unveil more than $2bn in extra infrastructure projects in Tuesday’s federal budget, as his government relies on road and rail investment to create jobs and help drive the COVID-19 economic recovery.

The Australian has confirmed the new funding will be announced on Tuesday on top of the $7.5bn infrastructure package – covering 82 new projects, 33 existing projects and creating up to 30,000 direct and indirect jobs – revealed on Monday.

The budget measures will increase the Coalition’s 10-year infrastructure plan price tag from $100bn to more than $110bn.

While it will be up to state governments to decide who they hire for the work, Deputy Prime Minister Michael McCormack said there would be time limits on some of the projects in a bid to stimulate the economy faster.

“We do want money to hit the ground, that’s why many of the projects are shovel-ready,” Mr McCormack, who is also Infrastructure Minister, said.

“It’s about getting hi-vis workers on the ground. It’s also about the cafe providing egg-and-bacon rolls near the worksite. It’s about the motel providing accommodation for those workers who may be finding themselves in rural and remote Australia, a place they’ve never been before.”

Opposition infrastructure spokeswoman Catherine King said it was essential the funding was “delivered now, not years down the line”.

Her warning came after the final budget outcome for 2019-20 confirmed the federal government’s payments to the states and territories for road and rail infrastructure was $1.7bn less than estimated, largely due to COVID-19 and the black summer bushfires.

“With Australia in its deepest recession in a century, we cannot see more of the same. The Morrison government is always there for the photo op, never there for the follow-up,” Ms King said.

“This year’s budget might be full of big promises but, in the end, it is delivery that matters.”

Echoing Ms King’s call for immediate construction and stimulus, Master Builders chief executive Denita Wawn said the scope of the infrastructure spend should extend beyond roads.

“Building new hospitals, university campuses, social housing, research and defence facilities must also be part of building us out of recession,” Ms Wawn said.

EY Oceania chief economist Jo Masters said infrastructure, which was effective at generating jobs and improving productivity, would play an important role in Australia’s recovery and COVID-19 reforms. She said the government should keep focused on building infrastructure that paid a social dividend.

“There’s capacity to think more broadly to social infrastructure, environmental infrastructure, digital infrastructure,” Ms Masters said.

“Those maintenance-type projects, we do need them, we need to maintain capital stock … but we need to make sure we’re thinking more broadly.”

Infrastructure Partnerships Australia chief executive Adrian Dwyer said funding labour-intensive road and rail upgrades that could be deployed to market quickly was a “smart step”.

In the medium and longer term, he said, spending on strategic projects that responded to population growth and boosted productivity must also be prioritised. “The commonwealth can and should use their funding to encourage the states to accelerate infrastructure projects and reform markets,” Mr Dwyer said.

“That includes encouraging states to open services to competition for delivery, modernise planning systems, and make the best use of private capital.”