Australian budget breakdown 2018: commercial construction

The Federal Budget 2018 has divided key players in the commercial construction sector. Is there enough funding, or should more be spent? Our Australian budget breakdown looks at the implications for Queensland and the rest of the nation.

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It’s difficult to envy politicians during budget time, since pleasing all groups seems impossible. In the case of commercial construction, there’s disagreement about whether the Federal Budget goes far enough to support the booming sector (especially when it comes to infrastructure). The government last year committed $75 billion to airport, road and rail projects. Has progress been made in the Federal Budget 2018-19? Depends on how you look at it. Nationally the $75 billion will be rolled out over the next ten years. A $24.5 billion slice of that pie will be funded in 2018-19. Out of that amount:

• $4.2 billion will go to new projects in 2018-19
• $17.8 billion will fund existing projects between 2018-19 and 2021-22

Does the Federal Budget 2018 increase spending for infrastructure?

The CEO of Master Builders Australia, Denita Wawn, welcomes the $24 billion infrastructure investment across the nation. She says this will enhance the productivity and liveability of our cities. “Overall the Budget will boost confidence in the building and construction industry”, Ms Wawn said. But the Opposition says the government pulled money from previous allocations, instead of supplying new funds. Projections of the three years beyond this one (forward estimates) show the Federal Budget 2018 doesn’t include a single dollar of new investment, according to Labor frontbencher, Anthony Albanese. “All new projects announced in the Budget will be funded with money that was already in the Budget,” Mr Albanese said. Adrian Dwyer, Chief Executive of IPA says infrastructure funding is being reduced by 2 billion dollars over the forward estimates. This translates to less money for projects and more traffic for commuters. “At a time when our population is growing and our cities are more congested than ever, we need to see infrastructure dollars trending up not down. We need to see $10.7 billion put back into the budget for infrastructure,” Mr Dwyer said. Engineers Australia recently analysed the budget data and found the trajectory in cash allocations for infrastructure projects has fallen in the long-term. They put this down to the federal government giving project seed money to corporations, instead of directly funding state governments. Jonathan Russell, National Manager of Policy, never claims the government is walking away from its responsibility, but he says it’s important to scrutinise how money is being spent.

“We urge the government to establish just exactly how much money is being poured into the private sector and what projects are forthcoming so we can fully understand off-budget projects in the future.”

Australian Budget Breakdown: what does Queensland get?

Queensland is considered a winner in the Federal Budget 2018, when it comes to infrastructure spending at least. The Sunshine State will get $5.2 billion for projects, which is more than the $1.4 billion allocated to NSW. Here’s a snapshot of the funding allocations for road and public transport construction:

• $1 billion to expand the M1 Motorway (extra lanes between Brisbane and the Gold Coast)
• $3.3 billion for Bruce Highway upgrades
• $170 million to upgrade the Amberlay Interchange of the Cunningham Highway
• $390 million dedicated to the Sunshine Coast rail line duplication (this will significantly cut commuter travel times)
• Another $390 million on the Brisbane Metro Project
• $176 million for the development of the Rockwood Weir in Rockhampton
• $64.2 million to upgrade the Warrego Highway

Water infrastructure in regional areas will also get some love:

• $176 million for constructing the Rockwood Weir
• $11.6 milion to modernise Mareeba Dimbulah Water Supply Scheme
• $3 million for developing the Nogoa Mackenzie Water Supply Scheme

Australian Budget Breakdown: what do critics say about the Queensland allocation?

• • There’s a lack of federal funding for the Cross River Rail project. It wasn’t included in the Federal Budget 2018. This could be because the state government previously pledged to fully fund it.

• • A large chunk of money for the M1 and Bruce Highway won’t be spent for up to four years, according to Labor State Treasurer Jackie Trad, who says Queensland has been “left with the crumbs”.

• RACQ spokesman Paul Turner told the ABC there aren’t enough funds for road upgrades and this money has fallen over time. He wants the Queensland and federal governments to work together and sort it out.

How does TAFE training benefit nationally in the Federal Budget 2018?

The Australian government will top up its Skilling Australians Fund by an extra $250 million. This money will fund new apprentice training initiatives that are desperately needed in the building industry. There’s a shortage of skilled workers who can fill job gaps, fuelled by the recent commercial construction boom. The vocational training sector is struggling to produce enough workers to meet this heightened demand. It seems this ongoing funding commitment could go a long way towards creating the skilled workers that Australia needs. But is this enough? Dan Petrie, spokesman for The Chamber of Commerce and Industry Queensland believes more should be done to boost skills and training. “We’ve got workforces having to adapt to an economy like previous generations have never had to, so by and large [it is] positive but a lot of these measures were released previously,” Mr Petrie told the ABC. Denita Wawn from Master Builders Australia says the Federal government heeded their call to support the Skilling Australians Fund, but this isn’t enough. The construction peak-body welcomes Labor’s promise to modernise facilities and scrap upfront fees for 100 000 TAFE students. Having said this, they won’t throw their support behind Labor until they get more information about their industrial relations policies.

“We are concerned that if they are closely aligned with those put forward by the ACTU they will have adverse consequences for our industry and the community. The solution is not to give unions more power at the expense of workers.” Denita Wawn, CEO of Master Builders Australia