Federal government plan to review funding for delayed infrastructure projects
Cost blowouts and underfunding of major infrastructure projects will be reviewed to justify cuts or construction delays for roads deemed not nationally significant.
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Cost blowouts, supply chain issues, labour shortages and underfunding of major infrastructure projects across Australia will be reviewed as the federal government paves the way to justify cuts or construction delays for roads deemed not nationally significant.
Labor has committed to deliver $120 billion in infrastructure over the next 10-years, but will on Monday announce details of a major review expected to show many currently promised projects are not sufficiently funded to ever be delivered on time or within budget.
Projects already under construction will not be cut, but those in the Infrastructure Investment Program (IIP) without adequate funding or resources are likely to face changes under the government’s plan to concentrate on ensuring major “nation-shaping” infrastructure can actually be delivered.
The review, which was agreed to by states and territories on Friday, will take 90-days to complete, meaning cuts or alterations to impacted road upgrades would not be included in the upcoming May 9 federal budget.
Many of the 738 land transport projects currently in the IIP have not been started, do not have enough funds or are plagued with issues stemming from supply chain problems or a lack of skilled workers.
Infrastructure Australia has estimated as of May this year there is a shortfall of about 95,000 workers on public projects around the country, while since 2020 raw construction materials like gravel and bitumen have risen by up to 50 per cent in some areas.
In the past decade the number of projects under the IIP has gone from 146 under Labor in 2012-13 to 738 currently, including 162 with a Commonwealth funding commitment of $5m or less, 391 with $25m or less and 497 with no more than $50m.
The government has tasked Reece Waldock, Clare Gardiner-Barnes and Mike Mrdak – who all have expertise in infrastructure – to lead the review of the entire $120bn pipeline, with a view to making spending more sustainable and based on “national interest”.
Infrastructure, Transport, Regional Development and Local Government Minister Catherine King said a “properly functioning” infrastructure investment pipeline meant projects could be delivered with “more confidence” about time frames and budgets.
“Easing the pressure on the construction sector will help drive inflation lower and deliver more predictable investment and delivery outcomes from governments,” she said.
Ms King said projects under construction “will proceed” and the government had committed to maintain “significant” infrastructure investment over the medium term.
“This review will put confidence back into the investment pipeline, benefiting the states and territories and the communities we all serve,” she said.
Opposition Infrastructure, Transport and Regional Development spokeswoman Bridget McKenzie said Labor’s big promises had turned into “big cuts and delays”.
“A review of infrastructure projects … is code for further cuts to national infrastructure funding” she said.
“Nation building road, rail and infrastructure projects are on the chopping block again despite already cutting nearly $10bn from infrastructure programs last October, in addition to $7bn in cuts to dams and water infrastructure projects.”
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Originally published as Federal government plan to review funding for delayed infrastructure projects
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