2021 Federal Budget: What it means for Infrastructure and Transport

Federal Budget 2021 delivered $15.2 billion in infrastructure spending over the next 10 years – including a new freight hub in Melbourne.

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Overview

Since the end of the mining construction boom, public infrastructure has become an important support for the Australian economy, particularly in Victoria and NSW, driven by rapid population growth and catchup for limited spending in previous decades. Although infrastructure spending is already at a high level, there are a number of transport projects announced by state governments that need a Commonwealth contribution to proceed. 

While infrastructure investment remains at a high level, ABS engineering construction surveys show that road spending has plateaued since 2018, while rail has continued to grow, driven largely by spending in Victoria. 

Transport infrastructure is largely delivered by (or behalf of) state governments, although due to vertical fiscal imbalance (i.e. the Commonwealth raises most of the revenue) Commonwealth funding contributions are a key element of new projects. 

What did the Budget deliver? 

The budget delivers an additional $15.2 billion in infrastructure spending over 10 years as part of its commitment to provide $110 billion in infrastructure spending over the next decade. It is important to note that the full phasing of this spending is not available beyond the five-year budget and forward estimates period. More detail by state is included below. 

 

Victoria 

The budget commits $3.0 billion for projects in Victoria, with the major projects being: 

  • Up to $2 billion for the Melbourne Intermodal Terminal, although funding and potential Commonwealth equity is yet to be fully determined. The proposal seeks equivalent funding from the Victorian Government.  
  • $380 million for Pakenham Roads Upgrade 
  • $250 million for Monash Roads Upgrade  

 

New South Wales 

The budget commits $3.3 billion for projects in New South Wales, with the major projects being: 

  • $2.0 billion for the Great Western Highway from Katoomba to Lithgow 
  • $500 million for the Princes Highway  
  • $229.4 million for the M12 Motorway  

Queensland  

The budget commits $1.6 billion for projects in Queensland, with the major projects being: 

  • $400 million for the Bruce Highway 
  • $400 million for the Inland Freight Route  
  • $240 million for the Cairns Western Arterial 
  • $178.1 million for Gold Coast light rail capacity improvement and $126.6 million for the light rail stage 3 extension 
  • $160 million for the Mooloolah River Interchange 

 

Western Australia  

There is $1.3 billion for Western Australian projects, including: 

  • $237.5 million for METRONET Hamilton St/Wharf St grade separations and $110m for the METRONET Byford extension 
  • $200 million for the Great Eastern Highway 
  • $160 million for agricultural supply chain improvements 
  • $112.5 million for the Reid Highway 

 

South Australia  

There is $3.2 billion for South Australian projects, including: 

  • $2.6 billion for the North-South Corridor 
  • $161.6 million for the Truro bypass 
  • $148 million for the Augusta Highway duplication  

Tasmania 

The budget commits a further $322.6 million for Tasmanian infrastructure projects, including $113.4 million for the Midland Highway.  

 

The Territories 

The Northern Territory has received $323.9 million, including $173.6 million for gas industry roads upgrades and $150 million for National Network highway upgrades.  

The ACT has received $167.3 million, including $132.5 million for Canberra Light Rail stage 2A. 

 

How did business react? 

Infrastructure Partnerships Australia was pleased with additional funding, with CEO Adrian Dwyer commenting that: The Federal Government has raised its high watermark of infrastructure funding in this year’s Budget … The challenge now is getting dollars out the door and diggers in the dirt. 

For more information read the full Federal Budget 2021: What does it mean for Infrastructure & Construction