Yesterday’s federal budget contained more than whopping deficits, adjustments to pensions and controversial economic forecasts. It also saw the announcement of the Government’s infrastructure spending plans, including the winning projects to be paid for out of the Government’s Building Australia Fund.
The spending is detailed in a very glossy brochure published by Infrastructure Australia entitled "Nation Building for the Future". $22 billion has been committed to this end, although as Alan Kohler has pointed out, in spite of Wayne Swan’s constant rhetoric about the need for such projects to be "shovel-ready" only a small slice of that will be spent this financial year.
As I reported yesterday, the infrastructure announcements are principally concerned with land transport, with some additional investment in clean energy, education, health and innovation infrastructure thrown in. Urban rail is the big winner, with metropolitan Melbourne securing $3.2 billion for a dual rail link from Melbourne’s outer west all the way in to Southern Cross station, and the Gold Coast getting funding for a light rail spine to run down that city’s hopelessly congested coastal strip.
Roads aren’t neglected either, with significant investments announced in the Route 1 national highway that runs all the way along Australia’s east coast. The perennially troublesome Ipswich Motorway also gets funding and there’s money for the Kempsey Bypass on the Pacific Highway and the Bruce Highway north of Brisbane as well as $1.4 billion for the Hunter Expressway between Newcastle and Sydney.
Notice anything about these priorities? There’s a heavy commitment to emissions-intensive infrastructure projects. These big road and rail projects are utterly consistent with the Government’s "roads, rail, ports, jobs" mantra — but not necessarily with our carbon- and petroleum-constrained future.
Even the announcements about clean energy reflect this. Aside from a significant commitment to add 1GW (1000 MW) of solar electricity to the national grid, costing $1.5 billion, Labor has again put its eggs in the "clean coal" basket. The Government is pouring $2 billion over nine years into the untested and in many respects technically unproven technology of carbon capture and sequestration, or "clean coal" as it is sometimes inaccurately called. If any more evidence of the ALP’s quixotic obsession with somehow squaring the scientific reality of climate change with the political imperative of the carbon lobby was needed, this is it. By contrast, Swan announced a much smaller $465 million for renewables.
Such inconsistency is not surprising from a Government that has just postponed its own emissions trading scheme.
The "shovel ready" mantra is another inconsistency in this package, which claims to be both timely and targeted, and also the result of a rigorous assessment process put in place by Infrastructure Coordinator Michael Deegan. The result, in addition to the announcements made yesterday, is a priority list of nine infrastructure projects ready for funding with a "pipeline" of a further 28 projects that require further feasibility and pre-construction work.
It’s a good start that the Australian Government is at last systematically trying to identify the nation’s infrastructure needs. But unless Infrastructure Australia develops a far more sophisticated understanding of global demographic, environmental and natural security trends, future projects seem doomed to the current orthodoxy of concrete pouring. Indeed, in spite of Wayne Swan’s commendable effort to address the long-term demographic issues posed by Australia’s ageing population, the Rudd Government’s long-term planning horizons are still poorly researched and hazy. At least their view is slightly longer-term than the next election.
Some aspects of Swan’s infrastructure spend were positive. Several billion dollars in new investment in education and innovation, combined with the significant extra funding for the ABC, demonstrates that when it comes to matters of human capital, Kevin Rudd’s Government is more enlightened than it sometimes lets on. As John Quiggin observed in Crikey, the innovation announcements in particular were surprisingly positive, while Dan Warne at APC notes that commitments to regional broadband and to rolling ahead with the National Broadband Network make this a good budget for IT.
Even PhD students on Australian Postgraduate Awards get a fillip. Considering how difficult it is for our universities’ most gifted students to pay the rent in big cities, this will make a real difference. It’s a long way short of the recommendations of either the Bradley or Cutler Reviews, but it’s something.
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