Industry responds to infrastructure investment in the Federal Budget

The Federal Government Budget held $7.5 billion for transport infrastructure funding extending to projects across every state and territory. Funding for the infrastructure sector also included apprenticeships, asset write-offs, road safety, water infrastructure and local government.

Below is a compilation of industry responses to the Budget’s infrastructure announcements.

Roads Australia

Roads Australia (RA), the peak body for roads has welcomed the Budget’s focus on investment in transport infrastructure and funding for road safety and local governments. CEO Michael Kilgariff said investment in transport infrastructure is always important, but is especially so as Australia looks to emerge from the economic effects of the COVID-19 pandemic.

“The suite of investments in major transport infrastructure projects included as part of tonight’s Budget will provide a vital injection of construction activity at a critical time,” he said.

“The funding commitments are also important in providing certainty to industry about a reliable pipeline of future work opportunities. In such a volatile global economic climate, it is essential that companies are able to plan for the future with confidence.”

The peak body also welcomed the investment incentives for businesses with a turnover up to $5 million to write off the full value of any eligible asset purchased.

“RA encouraged the government to commit to enhancing market capacity and improving skills and training regimes in its pre-Budget submission. We are pleased to see that has been acted upon in through the Budget’s provision of a 50 per cent wage subsidy for employers who take on a new apprentice or trainee, as well as through the establishment of the JobMaker hiring credit,” Kilgariff said.

“It is clear from the measures contained in tonight’s Budget that those who design, construct and operate transport infrastructure will be at forefront of driving Australia’s post-COVID economic recovery. It will be important to ensure that funds begin to flow quickly so that projects can commence.”

Australian Constructors Association 

The Australian Constructors Association (ACA) has also welcomed additional investment in new infrastructure but noted the ‘use it or lose it’ condition calls for a more collaborative approach to procurement and delivery. It cited the lack of truly ‘shovel ready’ projects across Australia as a concern.

Jon Davies, Chief Executive Officer of the ACA said our industry is ready to work collaboratively with Federal and State Governments to achieve changes that ensure projects are expedited and delivered efficiently and more productively.

“Construction productivity growth over the last thirty years lags growth in other sectors by almost 25 per cent. Through increased collaboration, we can de – risk projects through job creating advance works, ensure that there is sufficient capability, capacity and skills within both Government and Industry to undertake the work, and fully leverage the social and economic benefits of this investment. In turn this will create an environment conducive for productivity improvement that has been missing for too long,” Davies said.

He said this approach will deliver more projects, boost economic recovery and create thousands of jobs for the same investment.

“Given what is at stake, we call on the Federal Government to take a more active role in driving the reforms needed to develop a more sustainable and productive construction industry. A Federal Reform Initiative led by a newly appointed Minister for Construction could provide a lasting positive legacy from COVID-19,” he said.

“In this regard we welcome the inclusion in the Budget of additional funding to Infrastructure Australia who have announced their intention to expand the Australian Infrastructure Plan to provide a blueprint for lasting reform.”

Australian Local Government Association

The Australian Local Government Association (ALGA) has welcomed new Federal Government support for regional and remote communities hard-hit by Covid-19, drought, and last summer’s bushfires.

ALGA President David O’Loughlin thanked McCormack on behalf of local governments – hailing the initiatives as a positive development at a time when many regional communities are still reeling from the cumulative effect of Covid-19 and natural disasters. He also commended Treasurer Josh Frydenberg’s announcement of a further $1 billion investment in the local roads and community infrastructure as a vote of confidence in local government’s ability to drive local economic prosperity.

He said the extra money for local infrastructure, which will be provided to local governments in the calendar year 2021, coupled with councils’ ability access to the $1.2 billion wage subsidy program for trainees and apprentices, will enable them to green-light more “shovel-ready” projects that will employ people in regions still reeling from the combined effects of natural disasters and the coronavirus pandemic.

“These initiatives will greatly benefit their recovery from these unprecedented events, and deliver them a brighter, more sustainable economic future,” he said.

O’Loughlin said ALGA has long argued for eliminating communications and road safety blackspots and boosting investment in roads and bridges improvements to increase freight productivity and lower input costs for Australian exporters.

“All these initiatives will help deliver that and enable the regions to bounce back from what has been one of the most tumultuous periods in recent history.”

Civil Contractors Federation National 

The Civil Contractors Federation National, has welcomed the Federal Government’s infrastructure investment package in the Federal Budget and has called on governments to work with industry to distribute funds in fast and effective manner.

Chris Melham, Civil Contractors Federation National Chief Executive Officer said the body welcomes the $7.5 billion worth of new infrastructure investment, taking the total Federal Government commitment to $14 billion since the outbreak of COVID-19, in addition to the existing $100 billion rolling 10-year infrastructure investment pipeline.

“I would like to thank the Deputy Prime Minister, the Hon Michael McCormack MP and the Minister for Population Cities and Urban Infrastructure, the Hon Alan Tudge MP, for their constructive dialogue with CCF over many months leading up to the Budget and acknowledge their recognition of the important role the civil infrastructure sector can play in contributing to Australia’s economic recovery as evidenced in tonight’s budget,” Melham said.

“This investment reflects the significant productive capacity of the civil infrastructure sector, and its readiness to generate additional jobs as outlined in the CCF’s 2020-2021 Federal Government pre-budget submission.”

Melham welcomed the ‘use it or lose it’ message to the States and Territories, but he said it needs to go further by requiring ‘shovel ready’ infrastructure funds to be spent in a transparent manner across urban, regional, rural, and remote Australia – and not to be used for ‘pork barreling’ in the lead up to respective State elections.

“In addition, Federal, State and Territory government procurement policy must be more balanced by encouraging and maximising greater participation of Tier 2 and Tier 3 head contractors,” he said.  “I look forward to the Federal Government adopting this policy and its application to the release of infrastructure funds to State and Territory procurement agencies.”

“While the Government has made it quite clear that it is targeting ‘shovel-ready’ projects across all States and Territories, creating opportunities for parties to work more collaboratively is the key to contracts being awarded earlier and to identify and manage risks,” Melham said.

Please see information on the Budget announcements for infrastructure here.

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