The Federal Government has made carefully managed media announcements over the past week ahead of the budget, promising $1.8 billion of measures including $220 million for the electrification of the Gawler rail line and $160 million for the Joy Baluch Bridge in Port Augusta.
A total of $1.4 billion has been promised to finish the South Road upgrade, including $177 million in federal funds to rebuild the Pym Street to Regency Road section with a matching state contribution.
But documents released by Deputy Prime Minister and Transport and Infrastructure Minister Michael McCormack show only a trickle of the pledged cash is due to flow in the next four years, with no new money for the north-south corridor in 2018-19 (apart from already announced projects at Darlington, Torrens-to-Torrens and the Northern Connector), and only $52 million in the forward estimates for Pym to Regency. The documents show $50 million for the Gawler rail project over the next four years (none in 2018-19) and $60 million for the Joy Baluch Bridge (again, none in the next financial eyar).
The revelations prompted local industry groups to slam the budget as a “misleading, untimely and inauspicious deal”.
The South Australian Chamber of Mines and Energy (SACOME), Freight Council (SAFC), Civil Contractors Federation (CCF SA) and the Royal Automobile Association (RAA) said South Australia’s three big-ticket projects had each been short-changed.
“This year’s budget is all smoke and mirrors and delivers none of the pre-budget announcements made on Monday,” said Evan Knapp, SAFC chief executive.
“It is now clear that the Commonwealths’s commitment to complete the North South Corridor by 2023 will not be met without a change to the budget.”
State Treasurer Rob Lucas said earlier today that the remaining allocation for the North-South road corridor upgrade may not be spent for more than four years because business cases have not yet been done.
The forward estimates in the budget papers released yesterday don’t detail the new infrastructure spending promised over the past week, prompting the Opposition to question whether South Australians have been “hoodwinked”.
Federal finance minister Mathias Cormann told ABC Radio Adelaide today that “the money is guaranteed” but he also conceded he didn’t know when it would start to flow.
“There are lead times and there are obviously the timeframes involved in getting these projects… shovel ready and getting them underway, but the money’s there, it’s committed and the Federal Government together with the Marshall Government in South Australia will deliver them,” Cormann said.
Lucas also conceded that the timing was not set.
“Of the $24.5 billion of new (infrastructure) expenditure, our total expenditure of $1.8 billion is about our national population share of seven per cent, so obviously we welcome that,” he said last night.
“The critical issue for us will be in terms of the timing of the various payments over the forward estimates period and beyond the forward estimates.”
The Opposition seized on that latter point to question whether South Australia had been “hoodwinked”.
Shadow Treasurer Stephen Mullighan said the fact that the budget doesn’t contain the spending in the four-year forward estimates raised questions about whether the money would be delivered at all.
“I fear South Australians have been hoodwinked by the Liberals in this year’s budget,” he said. “We were promised $1.8 billion in road and rail projects, but where is the money allocated for these projects over the next four years?
“Each year, the state Infrastructure Minister receives a document outlining exactly how much money South Australia will receive in each year for each project over the next four years.
“Infrastructure Minister Stephan Knoll should publicly release that detail to provide certainty for South Australian road users and the thousands of people employed in the construction industry.”
BREAKING: Of the promised $1.8b in new road and rail funding for SA in the federal budget, only $162m is actually budgeted to flow in the next four years, with only $52m to be spent on South Rd.
— Nick Harmsen (@nickharmsen) May 9, 2018
Under questioning on ABC Radio Adelaide today, Lucas conceded again today that timing for the funding for the South Road projects was not fixed but insisted the funding had been committed.
“Well look putting aside the issue of whether it’s four years … we’re confident that the Federal Government has made a firm, concrete commitment to the $1.2 billion for the South Road projects,” he said. “We have to now do the work which the former government didn’t do in relation to the business cases.
“The actual timing in relation to those South Road projects will be dependent on us having to do the work the former Labor Government didn’t do and that’s to complete the business cases. So we need to do that as quickly and expeditiously as possible and then we can be in a position to negotiate with the Federal Government.”
South Australia’s GST allocation will increase from $6.37 billion this year to $6.89 billion in 2018-19, representing a 10.3 per cent share of the national pool.
“We’re also glad to see that the national growth in the economy has led to an increase in the GST pool, which means that all states will see an increased benefit in terms of their shares,” Lucas said.
“Our position continues to be very strongly that we’ll fight any proposed changes that lead to cuts in proposed GST revenue to South Australia.”
– with AAP
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