Infrastructure fund is big on money, short on detail
Wednesday, May 14, 2008/
Shadow finance minister Peter Dutton has slammed the $20 billion Building Australia infrastructure fund as a “slush fund” that will be used by the Rudd Government to fund its 2010 election promises.
Speaking at the official post-budget breakfast in Parliament House’s Great Hall, Dutton said the lack of detail around the fund – the Government has not nominated infrastructure projects that will receive funding nor even the criteria by which projects will be chosen to receive funding – means the fund is essentially a blank cheque.
He also points out that the Rudd Government will spend the seed capital in the fund, rather than just spending the income earned on this seed capital. “What they have done is create the biggest slush fund in Australian political history. I suspect the first of their infrastructure initiatives will roll out six weeks before [the next election in] November 2010, or before if needed,” Dutton says.
But Finance Minister Linsday Tanner has rejected the criticism, saying infrastructure projects will only be funded after careful research, consultation with the states and territories, and approval from an arms-length advisory body, Infrastructure Australia.
Tanner also says that any spending will have to be recorded in that year’s budget as a spending measure, which will prevent the fund being raided for pork-barrelling. “We’ve got a great opportunity with the revenue from the mining booms. It’s important we don’t blow that chance.”
While most business groups have applauded the infrastructure funding, there are some concerns about when projects will actually receive funding. The Government says it will not start spending before 2009-10, which, given the long construction timeframes of most infrastructure projects, means business faces a few more years of clogged roads, rail and ports.
Engineers Australia, which has published a series of report cards on Australian infrastructure in the past decade, is also worried that the establishment of separate funds for education, health and infrastructure will mean infrastructure projects will not be delivered in an integrated way. Chief executive Peter Taylor says: “The risk is that the ability to deliver an integrated program will be made more difficult that it should be by the announcement of separate funds and some predetermined infrastructure projects.”