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Infrastructure boost in NSW state Budget

Like Victoria and Queensland before it, the New South Wales Budget handed down yesterday is big on infrastructure spending, giving a $15 billion boost to the construction industry in 2014-15, with about a third allocated to roads and public transport.

Saying the NSW Government was just getting started, Treasurer and Minister for Industrial Relations Andrew Constance told the House that “over the coming four years $61.5 billion will be spent on productive infrastructure projects. These will modernise, de-congest and renovate the state.”

The program will be partly funded by the $20 billion to be raised by the privatisation of 49 per cent of the state’s electricity distribution network.

“The money to rebuild New South Wales must come from somewhere,” Constance said in his Budget speech. “Our best option is to recycle capital from our existing infrastructure. It doesn’t place a debt burden on our children, or a tax burden on enterprise.”

This year the Government is budgeting:

  • $863 million for the North West Rail Link
  • $103 million for South West Rail Link
  • $265 million for the CBD South East Light Rail, and
  • $398 million for the 33km WestConnex motorway.

And in the years ahead, it has earmarked:

  • $400 million for the NorthConnex project — “a long needed road to take trucks off suburban streets”, and
  • $3.9 billion for water and waste water projects to service urban development across Sydney, the Illawarra and Blue Mountains.

“They’re all projects that will get people moving; they’ll accelerate New South Wales,” Constance said.

He also announced the funding of feasibility studies for a Northern Beaches motorway tunnel, an extension of the F6 and a route corridor for the M9 – North, South and West.

Turning to the Government’s Restart NSW Fund, Constance announced a range of funding reservations including:

  • $400 million for stage 1 of Parramatta Light Rail
  • $100 million for the Hunter Infrastructure Fund
  • $83 million for a South Western Sydney Housing Acceleration Fund
  • $177 million for a second Clarence river crossing at Grafton
  • $325 million for Water Security for the Regions
  • $110 million for Regional Tourism Infrastructure, and
  • $200 million for a Regional Freight Pinch Point and Safety Program, which will target the Bells Line of Road, Golden Highway, Kings Highway and GoCup road.


NSW Budget reaction

Ai Group NSW Director Mark Goodsell said it was was a solid and forward-looking Budget that was strong on building infrastructure and supporting growth and, at the same time, highlighted “the opportunities that are being missed until value from the state’s electricity network is unlocked”.

“We commend the NSW Government for driving investment in infrastructure,” he said. “This will add significant value across the state economy, given its importance in lifting productivity and its potential for substantial flow-on effects for businesses in the state’s manufacturing, services and construction sectors.

“However,” Goodsell added, “the State’s ambitions on infrastructure are clearly constrained until capital can be released from the electricity network. This underlines the good sense in the Government’s proposals for the electricity network to be taken to next year’s state election.

“This reform is long overdue and represents the best opportunity to fund a sustained increase in infrastructure investment while also applying downward pressure on electricity prices.

“Quality spending initiatives in regional infrastructure are particularly welcome, including the extra funding for health infrastructure, water security and road upgrades. These new investments will pave the way for a boost to productivity, employment and economic growth in regional NSW.”

New South Wales Business Chamber CEO Stephen Cartwright said “the decision to recycle part of the electricity poles and wires network is one that is welcome by the business community in NSW, and one that will provide the State Government with the funds it needs to provide the new infrastructure urgently required across NSW”.

Cartwright said the large infrastructure projects would also create jobs — especially through apprenticeships — and would provide “crucial employment pathways for young workers”.

On the mining side, NSW Minerals Council CEO, Stephen Galilee said the Budget contained “some welcome additional funding for mining region infrastructure”.

“Today’s allocation of an additional $100 million the Hunter Infrastructure Investment Fund (HIIF) is welcome,” he said.” However, unlike the pattern of previous HIIF funding allocations, it is important that the Upper Hunter receive its fair share of funding.

“Investing an additional $87 million in the important Resources for Regions Program will also provide a boost to infrastructure in mining communities in the New England North West, Central West, Hunter and Illawarra.

“This is a good start, but more is needed,” Galilee said. “Mining communities will be looking for increased and ongoing funding for the Resources for Regions program before the next state election. The eligibility for Resources for Regions funding should also be increased to enable more mining communities to participate.”

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