State Labor leaders are at odds with the Albanese government over its plan to split the cost of building nationally significant infrastructure.
On Tuesday, the federal minister for infrastructure and transport, Catherine King, announced it would no longer be “the default” for the federal government to pick up the bulk of the tab for new roads, rail and other major projects.
“We are returning to a preference of 50-50 with the states and territories, so both levels of government carry an equal share of both the benefits and the risks,” King said.
Premiers and transport ministers from the nation’s three biggest states responded with concerns.
The Queensland premier, Annastacia Palaszczuk, told parliament that Queenslanders would be “absolutely shocked” by the proposal, saying she had written to the prime minister, Anthony Albanese, regarding the changes.
“We will stand up to the federal government, we will stand up to the prime minister and say Queensland deserves its fair share and nothing less,” Palaszczuk said.
The NSW premier, Chris Minns, said he was “very concerned” about what the infrastructure funding plan would mean for Australia’s largest state.
“The commonwealth government has an arrangement with Western Australia, which means effectively that NSW could be worse off from the GST payments in the years ahead, we’ve got a state commonwealth health agreement that hasn’t been signed that sees NSW lose out an enormous amount of money because of the complete collapse of GP services in the community,” he told ABC radio.
“Taxpayers pay a lot of money in income taxes to the commonwealth government and we deserve our fair share.”
The Victorian premier, Jacinta Allan, said her state had historically struggled to secure even 50-50 funding agreements with the federal government.
“For too long on too many projects here in Victoria under the former federal Liberal National government, there was no funding split,” Allan told reporters on Tuesday morning.
“It was zero funding that we got from Canberra on Metro Tunnel, on West Gate Tunnel, we’ve removed 72 level crossings without $1 from the federal government.
“Funding splits ... and what the federal government’s thinking on that is very much a matter for them. I’m very much focused on ensuring that ... we do get our fair share of funding.”
‘Concerning’: fears for regional infrastructure
The Victorian transport infrastructure minister, Danny Pearson, said King would be turning her back on regional communities if she introduced a 50-50 split across the board, given the federal government had committed huge funds to several projects outside Melbourne.
Under the new infrastructure statement, the federal government plans to focus on a narrowly defined category of “nationally significant” infrastructure, projects which cost at least $250m, or align with national priorities, among other requirements.
“It would be concerning if the federal member for Ballarat, Minister King, sought to walk away from regional Victoria, that would be concerning and disappointing,” Pearson said.
“Generally the projects that tend to be funded 80-20 are more regional and rural projects.”
The Queensland transport minister, Mark Bailey, complained that the sunshine state had already been left behind by the former Coalition government, urging the Albanese government to maintain existing funding arrangements on “corridors of national significance”.
He also demanded the commonwealth exclude any infrastructure required for the 2032 Brisbane Olympics from any cuts and that regional and south-east Queensland be left no worse off.
“Any deviations from the currently agreed 80-20 funding split on regional corridors and 50-50 on urban corridors will significantly disadvantage our regions which are amongst the most decentralised and road transport reliant in the nation,” Bailey said.
“We are the only state with the majority of our population in regional areas.”
The Grattan Institute transport and cities program director, Marion Terrill, said previous federal governments had tended to pick up more of the bill for rural projects – but the last government had funded as much as 100% of the cost of some schemes, particularly small-scale pork-barreling schemes such as car parks at railway stations.
Terrill said as state governments are responsible for building infrastructure projects, it made sense to ask them to bear more of the risk of a blowout if they don’t do so in a cost-effective way.
“They will be on the receiving end of a more disciplined approach to commonwealth spending,” she said. “So it’s understandable that they weren’t that thrilled about it.”
Megaprojects under threat as cull looms
King said the government’s review of the commonwealth’s $120bn “infrastructure investment pipeline” found it would “not be possible” to deliver all planned projects.
Under its new infrastructure policy statement, the federal government plans to spend the same amount of money on projects but set stricter limits on which ones it funds and subsidise them less, making federal money go further, she said.
Speculation is building as to which of the 800 works budgeted by the previous federal Coalition will survive the new government’s “short, sharp” 90-day review.
At least some projects are expected to be outright cancelled by the commonwealth, when the report on the $120bn pipeline of projects is released in coming days.
On Tuesday, the Melbourne Airport CEO, Lorie Argus, stressed the airport’s dream of an underground train station linking it to the city’s rail network could not be cut nor scaled back without broader negative implications for the city.
“A rail connection is critical,” Argus told the Australian Airports Association National Conference. “We need another mass transit solution to the airport and we’re very committed to that.”
Other megaprojects under threat as part of the review include a fast train line between Melbourne and Geelong, rail serving the Sunshine Coast, Brisbane and the Gold Coast, an extension of Canberra’s light rail network, upgrades to the Great Western Highway out of Sydney, and other road upgrades across the country.
Projects such as Victoria’s Suburban Rail Loop and commitments Labor took to the 2022 election were not subject to the review.
With Benita Kolovos and Tamsin Rose
