Scott Morrison’s $4bn surge to fast-track big projects

Almost $4bn in infrastructure funding will be fast-tracked for major projects as part of an economic stimulus package.

Scott Morrison says the government has provided the equivalent of more than $9bn in ‘responsible’ stimulus since being elected. Picture: Kym Smith

Almost $4bn in infrastructure funding will be fast-tracked for major, state-approved projects across the country as part of an economic stimulus package that Scott Morrison says will supercharge investment.

In his strongest statement yet in defence of the government’s economic agenda, the Prime Minister will hit out at those calling for direct cash injections to refuel the softening economy, describing them as “panic merchants” who don’t understand the situation.

The Reserve Bank has also sought fiscal intervention but has called on state governments and the commonwealth for a faster rollout of infrastructure after three interest rate cuts have so far shown little sign of stimu­lating growth.

READ MORE: Infrastructure projects to be rolled out earlier | Tax breaks to fast-track big building projects | Fiscal stimulus push a calculated decision |

In a speech to a Business Council of Australia event on Wednesday night that will also reveal the first stages of his deregulation agenda, Mr Morrison will say there is a “panicked reaction” to the current economic environment that amounts to a “serious misdiagnosis” of the situation.

He will highlight the fact that including $7.2bn in tax cuts, the government has provided the equivalent of more than $9bn in “responsible” stimulus since being elected.

APrime Minister Scott Morrison and Treasurer Josh Frydenberg speak during House of Representatives Question Time.

“A responsible and sensible government does not run the country as if it is constantly at DEFCON1 the whole time, whether on the economy or any other issue,” Mr Morrison will say, according to excerpts of his speech. “It deals with issues practically and soberly.

“The appetite for crisis popular amongst some these days, on so many issues, reflects an immaturity demanding urgent action regardless of the consequences.

“If there is a crisis, you don’t need to dot your i’s and cross your t’s. Urgency takes over reason.

“What you get is the fiscal debacle that was rendered by the Rudd-Gillard-Rudd Labor government that we are still paying for to this day, and that Labor continues to promote. We will not be following Labor’s mistakes.

“If Australians wanted to elect economic panic merchants, they would have voted Labor.”

Mr Morrison will announce that in a deal with the states and territories, the commonwealth will bring forward $1.8bn over the following year into projects that are ready to go, giving the states no excuses to delay construction.

A total of $2.8bn will be brought forward over the next four years for projects with funding already agreed under the federal government’s $100bn 10-year infrastructure plan.

An extra $1bn will go into new projects after Mr Morrison asked premiers and chief ministers to identify a range of major projects that could be started without delay or capacity constraints.

Most of the funds being brought forward are thought to be for major regional road projects, several of which will be announced on Wednesday in Western Australian and Queensland.

Mr Morrison will say the stimulus move will have twin economic effects of accelerating construction and creating jobs in the short to near term while ­providing longer-term productivity gains and avoiding a knee-jerk reaction to the downgrading of economic growth both domestically and globally.

Reserve Bank Governor Philip Lowe. Picture: Kym Smith

Last week, The Australian ­revealed that the government would provide tax incentives for foreign investment into projects worth more than $500m, which it forecast would channel billions of dollars from the global capital market into Australian infra­structure.

Population, Cities and Urban Infrastructure Minister Alan Tudge said on Tuesday that the 130 projects already under way with federal government funding had underwritten 85,000 jobs.

In his speech to the BCA, Mr Morrison will seek to broadcast the government’s economic agenda amid rising community concern about the state of the economy and internal criticism that the government has not done enough to reassure voters that it had a sound plan.

“Together with an independent RBA, with a medium-term inflation target and full-­employment objective, government must also keep a lid on debt by achieving budget surpluses on average over the economic cycle,” Mr Morrison will say.

“While returning the budget to surplus, we have been making the right choices to reshaping the budget to better support the economy, now and over the medium to long term.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg during Question Time.

Mr Morrison will say that set against the gloomy economic ­outlook, it would be “reckless to discard the disciplined policy framework that has steered us through many difficult periods, most recently and most significantly the end of the mining ­investment boom, which posed an even greater threat to our economy than the GFC”.

“This year’s election was a vote for stability and certainty in uncertain times, a vote for staying the course on a policy agenda that has worked to rebuild our nation’s finances, retain our AAA credit rating and start paying down our debt so as not to further burden ­future generations,” he will say.

“That’s the point of a surplus — it’s not extra money that lies around like coins down the back of the sofa.

“Its purpose is to reduce the more than $19bn we are paying on interest each year on the debt that has been built up by 12 years of deficits … Fixing our finances has been achieved at the same time as rewarding aspiration and enterprise in our economy through once-in-a-generation tax relief ­allowing Australians to keep more of what they earn.”