Building jobs for now and the future
Since coming to office a little over six years ago now, the Coalition’s Government’s primary focus has been on keeping the economy strong.
A strong economy is not an end in itself, but is the mechanism for Australians to be in jobs, for wealth to be created and for essential services to be funded.
On nearly every measure, Australia has done well. We are now in our 29th consecutive year of annual economic growth; more than 1.4 million jobs have been created since the Coalition Government was elected; the proportion of working age people on welfare is at its lowest in 30 years; the budget is back in balance for the first time in 11 years; and economic growth is 1.9% - growing faster than all members of the G7, except for the United States.
Pleasingly, wages growth has continued to outpace inflation, growing at 2.2% over the last 12 months, above the inflation rate of 1.7%.
We went to the last election with a plan to keep the economy strong, knowing the international headwinds that we are facing. The plan included:
- Lowering income taxes and small and medium sized business taxes;
- Getting the budget back into the black;
- Record investment in essential services such as health and infrastructure;
- A deregulation agenda; and
- A record investment in productivity enhancing infrastructure.
Today, I would like to discuss our infrastructure agenda and how that is contributing to this economic plan - both now and into the future. I also want to discuss a related topic, the South East Queensland City Deal, and how that is designed to also boost productivity and enhance the region’s liveability.
Our national infrastructure agenda
Infrastructure helps the economy in three ways. It provides jobs and economic activity during the construction phase, it boosts productive capacity through creating faster connections between locations, and it saves people and businesses time.
Boosting infrastructure has been part of our agenda since we first came to office. In 2014, we proudly announced a $50 billion infrastructure pipeline which was lauded by Infrastructure Partnerships Australia as “the largest-ever national infrastructure investment program”.
In this year’s budget, only five years later, we boosted that to $100 billion.
As a government, we have made the tough decisions to commit to projects that had been in the too hard basket for years, with none more significant than the $5.3 billion Western Sydney Airport. This had been talked about for decades, but no government previously properly committed to it. Our government did.
Similarly with other massive projects such as the Melbourne Airport Rail Link, where we have convinced the state government to finally build the rail connection that should have been built three decades ago. Putting $5 billion on the table tends to have such an impact! This is now in the planning phase and construction will begin in 2022.
The Inland Rail is another monster project that our government is getting underway - a $9.3 billion project that will transform how freight is transported across our continent.
Here in Queensland, the Australian Government has already committed $10 billion for ongoing works to upgrade the State’s major north-south Corridor, the Bruce Highway.
In South Australia, we funded the huge North South corridor project which is creating a link across the city that will shape Adelaide’s development for decades. We have already committed $4.5 billion to this.
In Western Australia, the city-shaping Metronet is underway.
Every one of these projects is on a monumental scale. Every one is a nation building project.
When we think of nation building projects in the past, we often think of the great Snowy Hydro Scheme which put in place water and electricity infrastructure and created thousands of jobs. In today’s dollars, the investment in the Snowy was
We are building the equivalent of multiple Snowy schemes at once with our major projects across the country.
Over 130 projects funded by the federal Coalition Government are underway as we speak.
The amount of activity being undertaken right now is sometimes lost on the commentariat, perhaps in part because we have been announcing so many new projects over the last 6 to 12 months.
It is true, that of the 900 major projects that we have committed to since coming to office, 300 have been announced in the last 6 months.
But the activity supported right now by the federal government is unprecedented. Our expenditure is $10 billion per year on average over the next ten years, more than double the expenditure in the year before we came to office.
Across the country, construction of transport infrastructure is expected to reach around $42 billion in 2022-23.
This is an infrastructure boom unprecedented in Australia’s history.
It is also a jobs boom.
The 130 major projects funded by our government and under construction today are supporting 85,000 jobs over the projects’ lifetimes. A significant part of this figure is the Western Sydney Airport which alone is 28,000 jobs. Jobs that would not eventuate had we not made the decision to get going on the project and allocate the funding.
As the 300 other projects announced, but not yet started, move to the construction phase, the jobs figure will escalate further.
Moreover, the infrastructure underway today supports a bigger economy and ongoing jobs well after the projects have been finished. Ernst and Young, for example, estimates that over 9,600 permanent jobs will be generated on an ongoing basis as a result of the completion of 80 major federally funded projects it analysed.
It also estimated that the economy would be $8.3 billion permanently larger as a result.
There is so much infrastructure work underway that there are now capacity constraints in the market. This has been stated by senior figures in both the Victorian and New South Wales Government (where much of the infrastructure is occurring) and echoed by RBA Governor Philip Lowe, the Australian Industry Group and others.
In August, the head of Australian Industry Group Innes Willox noted, "We have an infrastructure boom, but we're having trouble servicing that boom and keeping it going, particularly with people....The stone, quarrying materials, all of that sand is becoming more and more difficult to gather, we're talking more and more about importing those goods.”
Despite the boom and despite the capacity constraints, the federal government is willing to bring forward funding if projects can be done more quickly. For example, we provided additional funding for the Victorian Government for Stage 2 of the Monash freeway. This will enable this critical project to get underway in the first quarter of next year.
Yesterday, the Prime Minister and I announced a further $328 million in additional and accelerated funding in South Australia, to ensure that we can deliver our infrastructure commitments more quickly. This includes additional funding for key priorities like the Darlington Upgrade as part of the North South Corridor, and accelerated funding for key regional road priorities. As a result of these decisions, an extra $217 million will be spent in the next 18 months.
We are in discussions with other jurisdictions, including in Queensland, and will be making further announcements imminently.
We are also making it more attractive for foreign investors to invest in productivity enhancing infrastructure. The Treasurer announced last week guidance on a new tax concession for nationally significant infrastructure projects. This new concession will allow foreign investors to access a concessional tax rate of 15 per cent on economic infrastructure projects approved by the Treasurer, instead of the 30 per cent that would otherwise apply. This incentive will maintain Australia’s competitiveness in a global market where the infrastructure funding gap is estimated to be $15 trillion by 2040.
Smaller infrastructure projects
It is not always simple to bring forward the construction schedules of major projects due the time it takes for detailed planning, compulsory land acquisitions, large procurement lead times and complex contract negotiations. As outlined, where state governments can, we will positively consider their proposals.
However, this is also one of the reasons we have been focussed on smaller scale projects in our cities and regions. These smaller scale ones, ranging from $200,000 to $50 million, can typically be done by local contractors which don’t face the capacity constraints that some of the larger ones do, and can be implemented within a much shorter timeframe.
In the months leading up to the federal election, we announced 166 smaller projects under the $4 billion Urban Congestion Fund. These projects were targeted at urban congestion hotspots.
It included 30 projects in Queensland, many of them Council managed projects, but also some larger state government managed ones, such as new on ramps at exits 41 and 49 of the M1.
Some of these projects are well known as being desperately needed. For example, the notoriously congested Indooroopilly Roundabout which disrupts 55,000 motorists every day, or the intersection of Newham Road and Wecker Road, which has been ranked by RACQ as one of the top five worst intersections in Queensland. Others are less well known, but equally important to local residents to get them home sooner and safer.
There is detailed planning, if not work underway, on every single one of the 166 projects. In many cases, people are already employed on the ground undertaking site preparation works and utilities relocations. For example, in Western Australia, work is underway on the upgrades to the Broadway in Ellenbrook. In South Australia, there are preparatory works underway on the Grand Junction and Hampstead Road upgrade and the Portrush Road and Magill Road upgrade.
There are 12 projects that are out to tender currently. We expect about half of the projects will be under construction next year, with the vast majority of the remaining ones under construction in 2021. This includes nine projects that we will be delivering in conjunction with the Brisbane City Council.
Every level of government has an interest in getting these completed as quickly as possible.
South East Queensland City Deal
I would like to turn now to our City Deals, which are agreements between federal, state and local governments about the future of our cities.
Our government has established the use of City Deals as a way to deliver place-based policy for our cities.
They are providing great opportunities around Australia, building stronger, better, and more liveable cities.
To date, City Deal partners have agreed to over 140 commitments totaling almost
$5.8 billion in investment by the Federal Coalition Government alone, with further investment by State, Local Government and third parties.
We are progressing a South East Queensland City Deal, negotiating with the Queensland Government and ten local Councils – five of which are among the largest in Australia.
The SEQ City Deal is the most ambitious of its kind to date – a large geographic region with a range of opportunities to grow many diverse communities from Toowoomba out West, to Brisbane City, and along the North to the Sunshine Coast.
This will be a 20 year City Deal. A Deal to transform the region and cater for the rapidly growing population.
Over the past few months I have been working with the Queensland Government and the Council of Mayors (COMSEQ), discussing the City Deal with the community through nine roundtables. Many of you here in this room today have been part of our roundtables, and I thank you all for your valuable contribution.
Each City Deal highlights different themes or priorities. The ones that are emerging from our SEQ deal are:
- Developing a shared 20 year strategy for transport – making your trip from one end of SEQ to the other end as quick as possible
- Expanding SEQ’s knowledge economy
- Delivering better digital capability
- Enhancing livability and sustainability through addressing congestion, water security and waste management.
The three levels of Government will bring these priorities together with a view to finalising the City Deal by mid-2020.
Today, I have sought to convey the scale of Commonwealth investments in Queensland infrastructure, our commitment to working with other levels of Government.
I look forward to finalising the South East Queensland City Deal, and getting on with delivery.
Thank you for inviting me.