Politicians’ addiction to transport spending on show

It’s just a taster for the election campaign. In the lead-up to the 2019 federal election, only one of the Coalition’s 71 promised transport projects valued at $100 million or more had a business case approved by Infrastructure Australia, while for Labor, it was two projects of 61.

And at the election before that, in 2016, only four of the Coalition’s 21 promised projects had an approved business case, and for Labor, just one of 28.

In the lead-up to the 2019 federal election, only one of the Coalition’s 71 promised transport projects valued at $100 million or more had a business case approved by Infrastructure Australia, while for Labor, it was two projects of 61.Credit:Anna Kucera

The government will argue that the intermodal terminal is going to be needed to take full advantage of Inland Rail. Due to completion in 2025, Inland Rail will run from Melbourne to Brisbane and handle double-stacked 1.8km-long trains.

The Inland Rail project is riddled with risk. It was first costed at $4.4 billion by the Australian Rail Track Corporation in 2010; by 2015, the cost estimate had ballooned to $9.9 billion, with only the skinniest of margins to suggest it might be worth building.

Next, in December 2020, the government announced the cost had exploded to $14.5 billion. Last we heard, Deputy Prime Minister Barnaby Joyce has decided it needs to go an extra 500 kilometres, to Gladstone, for a further $5 billion of taxpayers’ money – so far.

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The federal government is also going again on commuter carparks, even after being burnt with cancellations around Melbourne due to station closures, lack of suitable site or design options, and community opposition. The 2022 budget will include $18 million for a commuter carpark at Kananook on the Frankston line, and a further $8.5 million at Hampton.

The government seems to be overlooking just how heated the engineering construction sector is. Even before the pandemic, there had been a surge in government road and rail building, with the value of work under construction exceeding $120 billion for the first time ever in March 2020.

The amount of road and rail work being completed has barely slowed during the pandemic, and there’s been stiff competition for specialist skills and equipment for the massive projects that government now favour. The sector is pleading with government for consideration of cost rises in timber, steel, concrete and fuel. Putting more work into an already heated market just pushes up prices.

Whichever party wins the 2022 federal election should strengthen the transport spending guardrails. Rather than making promises on the hoof, they should require consideration and publication of the business case, cost-benefit analysis, and project priority before they commit public money.

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And no more carparks and other small hyper-local projects.

The last word should go to outgoing federal Liberal member for the Sydney seat of Bennelong, John Alexander, who on Sunday called on Australia’s politicians to overcome their addiction to using infrastructure spending to buy votes.

Marion Terrill is the transport and cities program director at the Grattan Institute.

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