The Queensland Government has been urged to establish a program of infrastructure renewal over the next few years, timed to offset the decline in mining-related infrastructure construction investment.
In its Pre-Budget Statement released yesterday, the Australian Industry Group says that, even though governments are facing acute budget constraints, “sustained and strategic infrastructure investment is essential if governments are to avoid storing up a costly backlog of projects for the future”.
The body goes on to say that “Continued investment in well planned infrastructure is key to maintaining productivity. Long-term infrastructure deficits pose very significant issues for the broader economy and a forward pipeline of major infrastructure projects should be maintained, underpinned by robust State-wide infrastructure planning based on a framework of statutory regional plans.”
This echoes the unprecedented funding levels for major construction announced in the Victorian 2014-15 State Budget earlier this month. The Queensland Budget will be handed down by Treasurer and Minister for Trade Tim Nicholls on Tuesday, June 3.
Ai Group Queensland Director Jemina Dunn says that, with Queensland’s productivity and competitiveness under significant pressure and growth still sluggish,” the forthcoming State Budget is an opportunity to boost business confidence which is currently taking a battering”.
“A recent Ai Group survey of industry found the majority of Queensland businesses see infrastructure investment and tax cuts as the key budget priorities for Australian governments,” she says. “”Ai Group’s pre-budget statement focusses on these areas, recommending both a reduction in the payroll tax rate [and] asset recycling to drive investment in high-quality, productivity-lifting infrastructure.
“Investment in skills and training, along with innovation to underpin growth, together with reorganising training and skills arrangements to ensure they are led by industry are also key components of Ai Group’s prescription for increased productivity.”
Ai Group is a peak industry association which represents the interests of more than 60,000 businesses in sectors including engineering, construction and mining equipment and supplies.
Some other points in its summary of recommendations are:
- Additional rail capacity – Prioritise delivery of the Bus and Train Tunnel (BaT) to provide critical rail capacity in the State post-2016.
- Asset sales – Investigate on a case by case basis, and undertake, where appropriate, carefully targeted asset sales that will deliver increased competition or improved efficiency in asset management, whilst leveraging the federal initiative that will provide the State with additional funds for infrastructure investment.
- Reducing the regulatory burden – Continue to work closely with industry to reduce the regulatory burden on Queensland business. This focus should not be restricted to the ‘four pillars’ of resources, construction, tourism, and agriculture but also prioritise high-employment-generating sectors such as manufacturing.
- Industry engagement – Provide genuine opportunities for meaningful industry engagement around government reforms to maximise the likelihood of robust workable solutions that enhance rather than impair business competitiveness.
The full Australian Industry Group Pre-Budget Statement can be viewed here.