Budget Hub 2022
Find all you need to know aboout the latest Budget papers from Federal, State and Territory Governments. We provide insights into their infrastructure investment programs beyond the headline figures.
October Federal Budget
In handing down his first Budget, Federal Treasurer Jim Chalmers has effectively replaced the pre-election Budget. The Albanese Government has laid out its fiscal strategy, characterised by commitments taken to the May election and some cuts, with a range of priorities from the past government put on the chopping block.
The Budget can best be framed as ‘no-frills’ from an infrastructure perspective. While total infrastructure commitments moderate the spending outlined in the last government’s pre-election Budget, the outlay over the next four years remains higher than the FY2021-22 Budget and will be a high watermark for federal spending on infrastructure once legislated.
The 2022-23 October Federal Budget maintains a strong federal focus on transport infrastructure, headlined by $2.2 billion for the Suburban Rail Loop East, representing the first Federal support for project, as well as $500 million for planning of Sydney to Newcastle High Speed Rail. This Budget also broadens the Federal Government’s focus across the infrastructure sector, including an additional $2.4 billion in equity for the NBN to expand its fibre rollout. The Albanese Government’s headline commitments in housing and electricity are also confirmed in this Budget, but remain largely unfunded within the forward estimates.
A range of commitments made by the previous Federal Government have been cut. Chief among these is the $5.4 billion Hells Gate Dam, while a further $1.1 billion in water funding has been withdrawn or reprofiled pending the completion of project business cases. In transport, the Albanese Government has scrapped or reallocated $2.8 billion of projects, including the Urban Congestion and Commuter Carpark funds, while a further $6.5 billion in transport spending has been pushed beyond FY2025-26 with the aim of mitigating current labour market and supply chain pressures.
CHALMERS DELIVERS MEASURED, NO-FRILLS INFRASTRUCTURE BUDGET
March Federal Budget
Treasurer Josh Frydenberg has handed down the Federal Government’s pre-election Budget. For a third year running, the Federal Budget has delivered another significant increase in infrastructure funding, with a strong focus on passenger and freight rail connections in NSW, Queensland, and Victoria. Despite the scale of spending, the FY2022-23 Budget includes few surprises, with the bulk of funding for infrastructure projects announced ahead of the Budget lock-up.
The Federal Budget delivers welcome commitments to faster rail, including $1.6 billion for the Brisbane to Sunshine Coast rail connection and $1.1 billion for Kuraby to Beenleigh rail improvements in Queensland. In addition, $1 billion has been allocated to the Sydney to Newcastle faster rail upgrade.
In another welcome move, the Federal Budget allocates $3.1 billion to deliver the Melbourne Intermodal Terminal Package. According to Federal Treasury officials, as part of this commitment $1.9 billion in equity will be injected into the Government’s newly created National Intermodal Company, which includes $1.2 billion for the Beveridge Interstate Freight Terminal and $740 million for the Western Interstate Freight Terminal. In other headline commitments, $2.3 billion has been allocated to the North-South Corridor – Torrens to Darlington – Stage Two in Adelaide, finalising the funding envelope for the $9.9 billion project.
Beyond transport, the Federal Government will provide $6.9 billion over 12 years from 2021-22 for water infrastructure projects, including $5.4 billion for Hells Gate Dam, which has little to no proper planning and does not have a completed business case.
2022-23 Federal Election Budget delivers the good, the bad, and the ugly on infrastructure
The 2022-23 Victorian Budget continues the State’s investment in a major pipeline of projects, with $85.3 billion in general government spending on infrastructure over the next four years. The Budget includes few new major commitments, with the majority of funding flowing to projects which have previously been announced or under delivery, including the West Gate Tunnel, North East Link,Suburban Rail Loop and Level Crossing Removal Project.
The Budget includes a strong focus on social infrastructure. This includes an additional $2.9 billion over four years in capital spending on health infrastructure, including a commitment to build the $1 billion New Melton Hospital and up to $525 million for the Barwon Women’s and Children’s Hospital – though much of this spending is likely to come beyond the forward estimates. The Budget also includes $1.6 billion in additional funding to build and upgrade schools.
Acknowledging the challenges of a heated infrastructure market, the four-year allocation for infrastructure has been reprofiled. The 2022-23 Budget delivers a $4.9 billion reduction in infrastructure funding from the record levels set in last year’s Budget. This is compounded by a $5.3 billion or 22 per cent underspend on the planned outlay in this financial year. It will be essential for the Victorian Government to work closely with industry to ensure the next four years of pipeline is delivered in line with this year’s Budget’s allocations.
Victorian General Government
Victoria maintains strong infrastructure spend in the face of growing pressures
Northern Territory Budget
The Northern Territory (NT) Government released its 2022-23 Budget this week, allocating $4.1 billion in general government infrastructure expenditure over the next four years, including $1.1 billion in FY2022-23. The projected spend represents a $315 million reduction in forecasted expenditure in the 2021-22 NT Budget. Regardless, the 13.8 per cent share of total government expenditure apportioned for infrastructure over the next four years remains higher than the 10-year average of 12.8 per cent – representing a $287 million boost over the long-term trend. The Territory’s fiscal position is also improving, with the net operating balance forecast to return to surplus in FY2024-25.
The NT’s capital program includes a continued focus on transport, comprising 50 per cent of committed infrastructure expenditure. Investments in housing and community assets account for 27 per cent of infrastructure spending, with other social infrastructure sectors making up 11 per cent. The geographic breakdown of total budgeted infrastructure funding sees 60 per cent allocated to regional and remote projects, including $690 million over four years to build and refurbish remote Aboriginal housing.
Northern Territory Government
Western Australia Budget
The Government of Western Australia handed down its 2022-23 Budget, allocating $14.9 billion in general government expenditure to infrastructure spending over the next four years, including $3.6 billion in FY2022-23. This represents a $1.8 billion, or 14 per cent, jump in funding compared to last year’s four-year projection and equates to 9.9 per cent of general government expenditure over the next four years. Included in the Budget is the WA Government’s announcement of a $60 million Clean Energy Car Fund, coupled with the introduction of a distance-based road user charge for zero and low-emissions vehicles, commencing on 1 July 2027. Further details are outlined separately in this week’s Infrastructure Report.
Despite this budget delivering an infrastructure funding share of 9.9 per cent of general government expenditure, above the 10-year average of 9.5 per cent – the first time this has occurred in over a decade – WA is still apportioning significantly less to infrastructure than other states. With a budget surplus of $5.7 billion and notwithstanding the current climate of materials and labour supply constraints, the WA Government has an opportunity to considerably increase its infrastructure funding levels. By doing so, WA would be able to catch up with other major states who have made greater investments in infrastructure while improving service delivery to taxpayers across a range of economic and social infrastructure.
Western Australia Government
WA joins the pack with sensible zero emission transport and road user charging reform
New Zealand Budget
New Zealand Government has handed down its 2022 Budget, allocating NZ$61.9 billion (AU$56.1 billion) in infrastructure expenditure over a five-year budgetary horizon. This includes net capital expenditure of NZ$19.5 billion (AU$17.7 billion) allocated for FY2022-23. The Budget also outlines an improved economic and fiscal outlook compared to last year’s Budget, with Gross Domestic Product (GDP) growth and net debt rebounding faster than previously expected, with net debt expected to peak in FY2023-24 at 19.9 per cent of GDP.
The Budget includes a continued focus on rail, public transport, and social infrastructure, which is headlined by an additional NZ$1.3 billion (A$1.2 billion) of funding towards health infrastructure, NZ$1 billion (AU$906 million) to the Public and Transitional Housing initiative, NZ$855 million (AU$775 million) towards education infrastructure and NZ$349 million (AU$316 million) for rail infrastructure. In addition, NZ$1.7 billion (AU$1.5 billion) has been set aside for projects in a contingent allocation but has not yet been profiled.
The Tasmanian Government handed down its 2022-23 Budget, allocating $4.9 billion in general government infrastructure spending over the next four years, including $1.3 billion in FY2022-23. This four-year infrastructure spend is around $1.1 billion higher than the previous Tasmanian Budget. The 13.5 per cent of general government expenditure apportioned to infrastructure is 1.8 percentage points higher than last year and remains significantly higher than the state’s ten-year average of nine per cent.
Headlining the funding allocations in the Budget is a total of $2.7 billion over four years for roads and bridges, including funding to complete the $786 million New Bridgewater Bridge project over the next four years, with main works to commence this year. The Budget also allocates $538 million for housing, $490 million for health infrastructure, and $314 million for education infrastructure in the next four years.
South Australian Budget
The South Australian Treasurer, Stephen Mullighan, has handed down his and the new Labor Government’s first Budget, allocating $15.3 billion in general government infrastructure expenditure over the next four years, including $3.5 billion in FY2022-23. The four-year infrastructure spending represents a $573 million increase on the previous SA Budget. The 14.3 per cent share of total government expenditure apportioned for infrastructure over the next four years is significantly higher than the 10-year average of 10.8 per cent. The SA Government’s fiscal position has rebounded slower than expected, estimating a deficit of $1.7 billion for FY2021-22, $336 million worse than forecast in last year’s Budget.
New South Wales Budget
The NSW Treasurer, Matt Kean, handed down his first Budget and the first with Dominic Perrottet as Premier. Total state infrastructure spending continues to grow, with the 2022-23 NSW Budget allocating $88.4 billion in general government infrastructure expenditure over the four years to FY2025-26. This is a $2.8 billion increase on the planned outlay in last year’s Budget. In line with Infrastructure NSW’s recommendation in their recently released State Infrastructure Strategy, the 2022-23 Budget contains no new mega project investments, instead focusing on the delivery of the existing pipeline of major projects in addition to smaller and medium-sized capital investments, digital upgrades, and network enhancements.
Despite the increase in infrastructure funding, the NSW Budget outlines a $3.5 billion underspend on infrastructure in FY2021-22, showing the NSW Government is beginning to bump up against delivery capacity constraints. These pressures have been brought into stark relief on the Sydney Metro – City and Southwest Line, which has seen its total cost increase to $18.1 billion. With cost pressures continuing to grow across the labour market and down the supply chain, compounded by global supply constraints, the Government will need to work closely with industry to see these dollars deployed.
On the reform front, the NSW Government has committed to legislate the early steps of a shift away from transfer duty towards an annual property tax. This landmark reform has the potential to improve the efficiency of transitioning land to more productive uses around key infrastructure projects and development precincts. The first step will be to allow first home buyers purchasing a property worth up to $1.5 million to choose to pay an annual property tax instead of transfer duty.
The previously announced Toll Rebate Scheme sees the NSW Government tip $520 million into tolling relief over the next two years – a move that will inevitably be welcomed by motorists, but one that should be replaced by a proper discussion on comprehensive tolling reform. With the Government prepared to allocate substantial sums of taxpayer money to toll customers, it should consider how this money could be better allocated to tolling reform to deliver an enduring system of fairer, more efficient and more sustainable tolls.
Kean delivers big infrastructure spend and landmark reform in another record setting budget
Queensland Treasurer Cameron Dick handed down his third Budget, laying out the Government’s economic and fiscal plans for the next four years. The 2022-23 Queensland Budget outlines a total of $37.6 billion in general government infrastructure spending over the four years to FY2025-26 – a $5.7 billion increase on last year’s outlay.
Despite the increase in aggregate funding, the Budget includes few new announcements or surprises. The vast majority of funds flow to previously announced but underfunded initiatives. The major recipient of additional funding will be the state’s health infrastructure, with a Capacity Expansion Program to see $5.7 billion in funding over four years for a range of capital works, including new hospitals in Bundaberg, Toowoomba and Coomera, and a New Queensland Cancer Centre. The total funding commitment is $7.8 billion over six years, however, only $25 million is allocated to this program in FY2022-23.
In transport, the Budget sees no new major announcements. Funding is allocated to progress previously announced major priorities, including the $2.1 billion Coomera Connector – Stage One, $1.2 billion Gold Coast Light Rail – Stage Three, $1.1 billion Rockhampton Ring Road and $1 billion Cooroy to Curra Section D.
Those looking for the Queensland Government to front load investment on initiatives for the 2032 Brisbane Olympic and Paralympic Games will be disappointed, with just $59 million over four years to support further planning. The Budget outlines a series of key priorities for the Organising Committee for the Brisbane 2032 Olympic and Paralympic Games (OCOG), including securing ‘third party’ funding for major capital investments required to support Brisbane 2032, but provides no detail on the full scope of that investment.
While industry understands the need for the Queensland Government to reach an agreement with the new Albanese Government on the scope of projects to be funded as part of Brisbane 2032, the runway for delivery of these projects will evaporate quickly, especially in an already constrained infrastructure market. As such, the Queensland Government will need to move decisively in consecutive Budgets to outline the full program of infrastructure investment for the Olympics – backed by concrete funding – to ensure the market can fully commit to the delivery task ahead.
QLD Government delivers significant boost to infrastructure funding, but treads water on olympics investment
Australian Capital Territory Budget
The Australian Capital Territory’s (ACT) Chief Minister and Treasurer Andrew Barr has handed down the 2022-23 Budget, marking the final instalment of this year’s State and Territory Budgets. The 2022-23 ACT Budget includes an infrastructure investment of $4.4 billion in general government expenditure over the four years to FY2025-26. This capital commitment to infrastructure is $163 million more than the 2021-22 Budget, representing an increase of four per cent. The share of total government expenditure on infrastructure is now 12.8 per cent, down from 13.1 per cent last year.
This year’s Budget continues to follow a five-year budgeting and reporting cycle for its capital works program, including for general government sector infrastructure spending. This approach – introduced in last year’s Budget – has a stated aim of providing a longer-term view in planning and delivery of the Territory’s capital works program. The five-year total commitment for infrastructure is $5.4 billion. However, to maintain comparability of commitments – both as a share of total spending, and across State, Territory and Federal levels – Infrastructure Partnerships Australia’s Budget analysis will continue to focus on a four-year reporting cycle, accounting for the current Budget year and the three forward estimate years.