Prime Minister Malcolm Turnbull believes his new Infrastructure Financing Unit will help deliver more infrastructure development despite tougher financial times. The unit, announced in this year’s Federal Budget, will utilise government grants and private co-financing to finance infrastructure development.
Turnbull has stated that his government are committed to working with state and local governments on the projects listed on Infrastructure Australia’s Priority List, however not all of these projects will receive government funding.
The Commonwealth has committed to 15 out of 18 projects on the IA Priority List. Turnbull recently criticised the Labor Party for cancelling contracts for the Perth Freight Link and Melbourne’s East West Link, “costing taxpayers billions and delaying vital transport for these growing cities for years”.
The unit has received criticism, however.
“There is a contradiction in the Government’s position on this fund,” said Labor MP Anthony Albanese.
“On the one hand, it wants financing to be available where private financing is not. But on the other hand, it claims this unit would work on projects that would be taken off Budget as they would produce a return for government.”
Infrastructure Partnerships Australia (IPA) has also criticised the proposal, stating that public infrastructure like passenger railways, highways and most motorways need government budget grants or subsidies because they cost more than they earn.
“If infrastructure projects were commercially feasible without government funding, they would already have been done by increasingly desperate state governments,” said IPA chief executive Brendan Lyon.