In June 2015 Reserve Bank governor Glenn Stevens pleaded with the government to do more to lift the economy.
In the past year “public final spending didn’t grow at all, public investment spending fell by 8 per cent. It would be confidence-enhancing if there was an agreed story about a long-term pipeline of infrastructure projects,” the governor said.
“The impediments to this outcome are not financial,” he told the Economic Society of Australia in Brisbane. The funding is readily available, at very low interest rates.
The impediments are political.
Borrowing to fund infrastructure that will earn a return makes sense even if it runs up deficits and debt. It is “not the same as borrowing to pay pensions or public servants”.
In September 2016, incoming Reserve Bank chief Philip Lowe repeated the appeal for the government to do more.
“Another option is for some entity in the economy to use the low interest rates to increase its spending. The government could either use its balance sheet or its planning capacity to do infrastructure spending.”
“That is what most businesses do; they meet their ongoing costs through their revenue flow and they borrow to build assets. So the test is: can the government, can any of us find assets to build that generate a return for society?”
Tony Abbott came to power promising to be the Infrastructure Prime Minister. We have been told over and over again that the government has engaged in record spending on infrastructure with the figure of $50 billion repeated by all.
This is, like most things this government says, a lie.
The actual money committed between 2014-15 and 2018-19 is $34 billion with another $8 billion proposed to be invested “onwards.’’ meaning into the unspecified future. And even those commitments are not being met.
In its 2014 Budget, the Coalition undertook to invest $8 billion on infrastructure in the 2015-16 financial year. But the recently released Final Budget Outcome for 2015-16 shows the Government invested $5.5 billion and $490 million of that was a one-off payment to the WA Government as GST compensation.
That underspend followed an underspend of $900 million in the previous year.
The cuts have been made to projects including the Pacific Highway, Bruce Highway, Adelaide’s South Road upgrade and Brisbane’s Gateway North project.
Forward projections from this year’s Budget show that in 2019-20 investment on rail will fall to zero (2016-17 Budget Paper Number 1, page 5-38).
To add insult to injury, Malcolm Turnbull wasted $18 million of public money prior to the election on propaganda advertisements which falsely claimed the Government had delivered record investment.
Morrison’s December MYEFO showed an even sorrier tale as pointed out by Shadow Minister Anthony Albanese.
Today’s MYEFO announcements on infrastructure represent the Government’s final abandonment of the Infrastructure Australia process of evidence-based decision making on infrastructure investment.
The closure of the Building Australia Fund, which was for projects approved by Infrastructure Australia, would be bad enough in itself, but the funding of 75 small projects, 73 of which are in Coalition-held electorates at the time of the election, is an appalling abuse of Commonwealth responsibility.
Not one of these projects has been approved by Infrastructure Australia.
While the Government has found funding for pathetic pork barrelling, it has failed to invest in major public transport projects including Brisbane’s Cross River Rail project, the Melbourne Metro, the Western Sydney Rail Line, the Peth Metronet or AdeLINK.
The Turnbull Government has at least six Ministers with infrastructure responsibility, including Infrastructure Minister Darren Chester, Urban Infrastructure Minister Paul Fletcher, Regional Development Minister Fiona Nash; Northern Australia Minister Matt Canavan, Prime Minister Malcolm Turnbull and his Assistant Minister for Cities, Angus Taylor. We could also include Communications Minister Mitch Fifield with the NBN.
The Government has rejected an application from the Opposition for charter letters from Mr Turnbull to his Ministers explaining who does what in this critical policy area.
The Opposition’s application under Freedom of Information laws was rejected on the basis that the material might reveal information before Cabinet.
Since when did the responsibilities of Ministers of the Crown become a state secret?
Why would reporting on the real state of the NBN lead to police raids?
Why are we ignoring cost benefit analyses?
What return will we get for the $400 billion they have found to spend on war toys?
Rather than listening to the advice of independent experts, this government uses infrastructure spending for its own political purposes and are consequently costing the nation dearly.