Trimming existing grants and projects will help fund Labor’s $9.66 billion spend on new road and rail projects and keep its spending from being inflationary, ministers say, with just over a week to go until the government unveils its first budget.
On Sunday, the federal government announced billions in transport projects across the country, including $2.57 billion for Victorian projects, $1.47 billion for Queensland projects and $1 billion for projects in NSW.
Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King.Credit:Alex Eliinghausen
Infrastructure Minister Catherine King said the spending was about honouring Labor’s election commitments. She said part of those costs would be funded by ending other projects started by the previous government, or pushing out the timelines.
“Some of the things that the previous government funded we’ll fund, some of them we won’t,” she said on ABC’s Insiders on Sunday morning.
“There’s a lot of things that the previous government announced with a lot of fanfare, but when you actually look at the capacity constraints, you look at the amount of money available, they’re really going to take a long time to build.”
Finance Minister Katy Gallagher said the infrastructure investments should not contribute to inflationary pressures as it was only a modest increase in spending.
“Largely it is working within the envelope that has been factored into the budget. So we’re not adding in a whole lot new, but we’re reshaping and delivering on our commitments,” she said on Sky News on Sunday morning.
The government will deliver its first budget on October 25, and Gallagher said it will also be about helping ease cost of living pressures as inflation is expected to peak near 8 per cent by the end of the year as interest rates continue to rise.
“We’ve made it clear we will be finding savings – definitely you’ll see stage one of the audit into waste and roads, you’ll see the results of that [in the budget],” she said.
“But we also said it will be delivering on our election commitments, helping with cost of living pressures where we can do that without adding to inflation.”
Neither minister would reveal how much the government will save from axed grants or programs ahead of the budget, King said the commuter car park fund will not continue, and there was “a big mess” in the regional grants programs.
“I’ve had to have a really hard look at where did the previous government invest, where it’s going to actually help economic development in the regions, and really work my way through those,” she said.
The infrastructure minister said the $2 billion regional accelerator fund was an odd program, and while the government would keep some elements including the training and university funding, a large proportion of those Coalition promises would go.
The building better regions fund is also under the spotlight, King said, as many applications were not assessed before the previous government left office. The government is also working through the community development grants to see which projects are worth funding and which end up on the chopping block, she said.
“I actually recognise how important funds like that are for regional communities and for local government, in particular, to be able to supplement in terms of local infrastructure,” King said.
“So there will be a regional grants program of some sort. It will not be the sort of terrible skewed program that we’ve seen in the past.”
King said her department will also make sure any of Labor’s infrastructure commitments worth more than $5 million will be scrutinised.
“If they come to me and they say on the basis of the merits review, this project can’t proceed, then I will not proceed,” she said.
The federal government’s largest infrastructure commitment – $2.2 billion for the suburban rail loop in Victoria – is yet to be reviewed by Infrastructure Australia. King said Labor relied on the Victorian government’s business case for that election promise.
“This will be a contested project for sure, but it’s something we have confidence in,” she said.
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