NSW and Queensland push back as infrastructure cuts on the cards

NSW and Queensland are pushing back against Jim Chalmers for suggesting state and federal governments need to delay or axe infrastructure projects to help bring down inflation.

Jim Chalmers has flagged a cut to infrastructure spending. Picture: Aaron Francis/The Australian

NSW and Queensland are pushing back against Jim Chalmers for suggesting state and federal governments need to delay or axe ­infrastructure projects to help ­reduce inflation, as the Treasurer guarantees Michele Bullock’s authority in his shake-up of the Reserve Bank of Australia.

The Treasurer on Sunday said the International Monetary Fund made an “important point” in warning the massive infrastructure pipelines of state governments were making it harder for the RBA to cut inflation.

Dr Chalmers said the government’s review into infrastructure spending – due to be released by the end of the year – would look at federal and state projects that could be delayed or axed.

“The IMF, I think, has made an important point, which is that we need to roll out our infrastructure investment in a way that gets us value for money, but also in a more measured and co-ordinated way,” Dr Chalmers told the ABC’s Insiders program on Sunday.

“I do think we’re going to need to make some difficult decisions about the infrastructure pipeline, which factors in those $33bn of blowouts from projects announced by our predecessors and which factors in our inflation challenge.”

Queensland Treasurer Cameron Dick said his state should not be asked to delay or axe any of its infrastructure proposals, signalling the pressure should be on Victoria and NSW to re-evaluate their spending.

“Queensland is Australia’s growth state and we need more infrastructure, not less,” Mr Dick said on the social media platform X.

“If infrastructure cuts are needed, they should be made to southern states with low growth and high debt.”

Queensland Treasurer Cameron Dick. Picture: Glenn Campbell

NSW Treasurer Daniel Mookhey. Picture: Richard Dobson

But NSW Treasurer Daniel Mookhey said it was his state that was “doing the most to accommodate the federal government’s ­immigration numbers”.

“The fact of the matter is that record immigration requires homes and infrastructure,” Mr Mookhey said.

“NSW expects that any savings from the infrastructure ­review to come back to NSW to support this effort.”

Victorian Premier Jacinta Allan was open to supporting changes to her state’s pipeline based on the outcome of the federal government’s review.

“We will have to wait for the federal government to conclude their review process and give us their feedback in terms of the ­future of different projects in that pipeline,” she said.

“There are pressures across every industry when it comes to workforce shortages and that is why having a pipeline of projects is critically important to support a pipeline of workers to stay here in Victoria.”

Victorian Premier Jacinta Allan. Picture: NCA NewsWire/Valeriu Campan

Federal Opposition Leader Peter Dutton. Picture: Steve Pohlner

Peter Dutton lashed out at the Albanese government for backing infrastructure cuts.

“The Prime Minister had a choice to make: you can fund local congestion-busting road projects in the suburbs, or you can employ 10,000 new public servants in Canberra. But you can’t afford both,” the Opposition Leader said.

“This Prime Minister once again has gone with the elites, this time the public servants in Canberra, over ordinary Australians.”

Dr Chalmers also revealed Ms Bullock would be the chair of the RBA’s new governance board for at least five years, amid concerns the central bank’s shake-up would diminish her authority.

“I intend to legislate the governor chairing that new governance board, at least for the first five years until we review it and make sure it’s working as we intended,” he said.

The Treasurer said a new deputy governor would be ­appointed by December, with ­internal and external candidates being considered, including from overseas.