Australian Infrastructure Budget Monitor 2021-22 by Infrastructure Partnerships Australia

AUSTRALIAN INFRASTRUCTURE BUDGET MONITOR 2021-22

About Infrastructure Partnerships Australia Infrastructure Partnerships Australia is an industry think tank and an executive member network, providing research focused on excellence in social and economic infrastructure. We exist to shape public debate and drive reform for the national interest. For more information, please contact: Adrian Dwyer Chief Executive Officer Infrastructure Partnerships Australia E: adrian.dwyer@infrastructure.org.au Jon Frazer Director, Policy and Research Infrastructure Partnerships Australia E: jon.frazer@infrastructure.org.au Jack Bateman Senior Policy Adviser and ANZIP Lead Infrastructure Partnerships Australia E: jack.bateman@infrastructure.org.au

For all media enquiries please contact: Michael Player Director of Communications and Engagement Infrastructure Partnerships Australia E: michael.player@infrastructure.org.au

[ICONS] Infrastructure Partnerships Australia, 2022 © 2021 by Infrastructure Partnerships Australia. AUSTRALIAN INFRASTRUCTURE BUDGET MONITOR 2021 – 22. This work is licensed under the Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/.

TABLE OF CONTENTS MESSAGE FROM THE CEO

OVERVIEW 3

ABOUT THE BUDGET MONITOR

1ST PLACE: VICTORIA

2ND PLACE: NEW SOUTH WALES

3RD PLACE: NORTHERN TERRITORY

4TH PLACE: SOUTH AUSTRALIA

5TH PLACE: AUSTRALIAN CAPITAL TERRITORY

6TH PLACE: TASMANIA

7TH PLACE: QUEENSLAND

8TH PLACE: WESTERN AUSTRALIA

FEDERAL GOVERNMENT

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

MESSAGE FROM THE CEO As the effects of the pandemic continued to bring widespread economic and social impacts, the 2021-22 Budget season saw governments once again deploy infrastructure investment as a stimulus lever to boost aggregate demand and support employment in the economy. The 2021-22 Budgets delivered by Australia’s federal, state and territory governments have set another high watermark for infrastructure spending nationally and in many jurisdictions individually. In total, $248 billion was allocated in general government sector infrastructure funding over the four years to FY2024-25. This is $22.6 billion – or 10 per cent – higher than in the previous year’s Budgets.

Despite the importance of the commitments by all governments to supporting Australia’s productivity and quality of life, these Budget announcements are only the first step. Delivery of a pipeline of this scale comes with major challenges, as the sector must redouble its efforts to build additional capacity and expertise, and work closely with governments to move projects from concept to completion. Value-for-money will need to be a sustained point of focus for all market participants throughout delivery of these infrastructure commitments. Reforms such as extending infrastructure specific skilled migrant visas to better align with project timelines and increasing supply chain resilience are just some examples of actions that can be taken to find the best price for the intersection of supply and demand.

Once again, Victoria and NSW dominate the pipeline, with the two states combining for $175.8 billion in infrastructure funding over four years – over 70 per cent of the national total.

The good news is the sector is up for the challenge, motivated by the opportunity to support the Australian economy through the pandemic and leave a legacy of productive infrastructure for future generations.

For the first time, Victoria has taken top spot in the rankings. Despite NSW increasing its total infrastructure spend, the increase by the Victorian Government of $21.2 billion on the allocation in its previous Budget saw the state emerge triumphant in this year’s Budget Monitor. With a total of $90.2 billion allocated to capital works over the period to FY2024-25, this means almost one in every four dollars of the Victorian Government’s general government expenditure is being directed toward infrastructure investment.

We hope you find the 2021-22 Australian Infrastructure Budget Monitor useful. If you are interested in learning more about the infrastructure pipeline in Australia you can find more information on our Australia and New Zealand Infrastructure Pipeline (ANZIP) and subscribe to our monthly Pipeline Reports. More detailed analysis of each jurisdiction’s Budget is available exclusively for Infrastructure Partnerships Australia members.

Adrian Dwyer Chief Executive Officer

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

OVERVIEW Figure 1: 2021-22 Australian infrastructure funding levels, ranked by share of Budget expenditure

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

Key Insights

A total of $248 billion in general government funding has been allocated for infrastructure over the four years to FY2024-25 – a ten per cent increase over last year’s allocations.

$248b

Infrastructure continues to be a major focus for governments, with the increase in infrastructure spending accounting for almost a third of the increase in total general government expenditure across the states and territories.

+$46 b

VIC

NSW

Despite year-on-year growth in the NSW pipeline, Victoria has moved to the top of the rankings for the first time. The Victorian Government will spend almost one in four dollars on infrastructure over four years, and $46 billion more than the state has spent on average over the past 10 years.

Victoria and New South Wales continue to dominate the pipeline of committed funding, accounting for 71 per cent of total general government sector infrastructure spending over four years.

$9,650

71%

Average per capita expenditure on infrastructure over four years is now $9,650 – an increase of ten per cent over the planned spend in last year’s Budgets1.

*Per person 1. Last year’s per capita spend figure includes 2020-21 Australian Capital Territory Budget figures, even though the ACT was not included in last year’s Budget Monitor as their 2020-21 Budget was released in February 2021.

Australian Infrastructure Budget Monitor – 2021-22

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Infrastructure took centre stage in governments’ 2021-22 Budgets, with record levels of spending The high watermark of infrastructure spending set in last year’s Budgets has risen even higher this year, with a total of $248 billion in general government sector spending allocated for infrastructure over the four years to FY2024-25. This is an increase of $22.6 billion – or ten per cent – compared to the planned spending in last year’s Budgets. While not included in the rankings, the Federal Government has again raised its infrastructure funding substantially – allocating nearly $57 billion in general government expenditure to infrastructure projects across the country. However, this remains lower than each of NSW and Victorian infrastructure spend. The inside ring of Figure 2 shows each state and territory’s allocation of federal funding, while the outer ring breaks down each jurisdiction’s funding by infrastructure asset class.

Jurisdiction rankings A significant increase in the infrastructure spend in Victoria sees the state claim first place in the Budget Monitor rankings for the first time. Despite increasing its total infrastructure spend over last year’s Budget, with more than $85 billion in funding allocated over four years, New South Wales slips to second place. Almost a quarter of Victoria’s general government sector expenditure is allocated to infrastructure capital works – five percentage points higher than New South Wales’s infrastructure funding share. The concentration of infrastructure investment in Victoria and New South Wales has only intensified in this year’s Budgets. Together, the top two states account for 71 per cent of the total infrastructure spend nationally. The Northern Territory has held onto third place in the rankings, with just over 15 per cent allocated for infrastructure over four years. South Australia has also retained fourth position, increasing its four-year share of total spending on infrastructure to 14 per cent. The Australian Capital Territory makes a re-entry to the Budget Monitor at fifth place, with 13 per cent allocated to infrastructure, and Tasmania now ranks in sixth place at 12 per cent. Having dropped three places in last year’s Budget Monitor, the largest proportionate and total decrease in infrastructure spending sees Queensland slip further down the rankings to seventh place. While the Western Australian Budget increased funding on infrastructure by 20 per cent – or over $2 billion – compared to last year, the state remains in last place in the rankings for the fifth consecutive year. Victoria achieved an impressive 31 per cent increase in its total infrastructure funding over four years, even as the size of the state’s total general government sector funding decreased by two per cent. Western Australia sees the next largest proportionate increase at 20 per cent, but the state’s funding as a share of general government expenditure remains last of all jurisdictions. Queensland sees a nine per cent proportionate decrease in general government infrastructure funding over four years – the steepest drop for any jurisdiction.

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

Figure 2: 2021-22 Federal Budget infrastructure allocations by jurisdiction and asset class

Ro a

Social 4%

Road 96%

ns S po Se oci rt 2 we al 5 % ra % ge 2% Ra il 2 2%

Rail 25% 1% Road 7 % Rail 4 d 87% Roa

l 5% % cia l 2 So Rai

rT ra

a Ro

W at

ACT $0.5b Tas $1.8b South Australia $4.3b

NT $1.1b

Rail 3

New South Wales $12.8b

Road 70% Western Australia $7.5b

Social & Water

Water & Sewe rage 4% Social 2% Other T ranspo Other 0rt 0% %

1% % rage 3 8% il a R

Queensland $11.7b

Sewe

Victoria $12.8b

Rail 38%

Water & Sewerage 1% Social 1% Other 1% Other Transpo rt 0%

Source: Infrastructure Partnerships Australia analysis of 2020-21 and 2021-22 Budgets

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

Analysis of per capita infrastructure spending highlights disparities between jurisdictions Most states and territories have maintained their per capita infrastructure spend at a level comparable to last year’s Budgets (see Figure 3). The significant exception – Victoria – has lifted its infrastructure funding by over $3,000 per Victorian to $13,600 over four years. Given its scale and relatively small population, the NT Government tops the per capita spending, with $17,700 per person on infrastructure budgeted over four years – 3.6 times as much as Western Australia. The national average per capita spend for 2021-22 Budgets is $9,650.

Figure 3: Per capita infrastructure funding by state and territory

$18

Per capita spend ($’000)

$16

New South Wales

Western Victoria Queensland Australia

South Australia

Tasmania

Australian Capital Territory

Northern Territory

2020-21 Budget 2021-22 Budget 2021-22 National average

$14 $12 $10

2021-22 national average

$8 $6 $4 $2 $0

Source: Infrastructure Partnerships Australia analysis based on 2021-22 Federal Budget

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

ABOUT THE BUDGET MONITOR Background Infrastructure Partnerships Australia’s Australian Infrastructure Budget Monitor measures infrastructure funding commitments by jurisdictions for the current Budget year and forward estimates (FY2021-22 to FY2024-25). This report collates information from the latest Budget papers from federal, state and territory governments to provide insights into their infrastructure investment programs beyond the headline figures. The purpose of the Budget Monitor is to inform the community, industry and researchers about historical and projected public infrastructure investment in Australia. It allows readers to compare and evaluate the commitments by governments to building infrastructure. This is especially important as all governments face the unifying challenge of navigating away from the economic disruptions of the last two years and into the rebuilding task ahead in the medium to long term.

Methodology The strength of each jurisdiction’s infrastructure program is assessed according to the aggregate general government sector infrastructure funding commitment over the period FY2021-22 to FY2024-25 as a share of total general government sector expenditure. This methodology allows for comparison of small and large jurisdictions and provides insights into the relative importance of infrastructure as a government priority over time. Infrastructure funding figures reported in government budgets are used where available. In other cases, the sum of purchases of non-financial assets and finance leases (such as expenditure from governments to private consortia through Public Private Partnership contracts) is

This means spending by government-owned corporations (for example, water and energy utilities and governmentowned ports) is excluded from this analysis. This provides a sound basis for comparison, and appropriately isolates the analysis to infrastructure that is paid for by taxes rather than through user charges. If this rule was not applied, jurisdictions with a higher proportion of infrastructure owned by the government would appear disproportionately higher. For this reason, the figures found in the Budget Monitor may differ from the headline figures governments use in media releases and interviews related to infrastructure funding. As government priorities evolve, we include new vehicles and sources of infrastructure funding across governments’ broad remits and portfolios. For example, a number of additional funding measures were captured in totals for the 2021-22 Federal Budget, ensuring we capture capital expenditure on all forms of infrastructure.2 We ensure all funding items and associated measures are traced back and added to previous years’ aggregates where necessary to retain comparability. All costs and funding commitments quoted in the Budget Monitor are provided in real terms. To account for inflation, we have used the Australian Bureau of Statistics’ Consumer Price Index for the March quarter of 2021.3 In calculating per capita expenditure for the 2020-21 and 2021-22 Budgets, Australian Bureau of Statistics’ estimates for the first quarters of 2020 and 2021 have been used.4

used as a proxy. This seeks to account for the diversity of budgetary approaches across the nation. The analysis uses total general government sector expenditure as a consistent measure of government spending. Total expenditure is calculated by adding total expenses and net acquisitions of non-financial assets, and accounts for spending on non-commercial aspects of the government.

2. National Water Infrastructure Development Fund’s Capital and Feasibility studies components, Recycling Infrastructure, Bilateral Energy and Emissions Reduction Agreements, Emissions Reduction and New Investments under the Technology Investment Roadmap, Health infrastructure, Advancing Australia’s Gas Fired Recovery, and Hydrogen gas ready generation.. 3. Australian Bureau of Statistics, 2021, Consumer Price Index, Australia, September 2020, Table 1 4. Australian Bureau of Statistics, 2021, National, state and territory population, Time series spreadsheet: Population - states and territories.

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

1ST PLACE: VICTORIA Victoria tops the rankings with a record infrastructure spend for any jurisdiction The Victorian Government has raised the bar on infrastructure spending, with a massive $90.2 billion commitment for infrastructure over four years. This represents approximately $1.9 billion per month in spending on infrastructure until mid-2025. This is the largest ever budgetary outlay for any Australian jurisdiction, and means Victoria will spend 24 per cent of its general government sector expenditure on infrastructure – a record in the history of the Budget Monitor. This is $45.9 billion higher than the state’s average infrastructure allocation over the past decade. The Victorian Government has managed its $21.2 billion, 31 per cent increase in infrastructure funding despite forecast total general government sector expenditure shrinking by $5.6 billion compared to last year’s Victorian Budget.

The bulk of spending is on previously announced or under-delivery projects Major projects receiving the bulk of funding announced in the 2021-22 Victorian Budget include Melbourne Metro Tunnel, West Gate Tunnel, North East Link, Melbourne Airport Rail, Suburban Rail Loop Level Crossing Removal Project. New projects funded in the Budget include a $986 million commitment for the procurement of 25 new X’Trapolis 2.0 Trains, $368 million to deliver enabling infrastructure for Melbourne’s Next Generation Trams and $100 million for the Calder Freeway upgrade. The Budget provides no further details on a Melbourne Intermodal Terminal to integrate with the Inland Rail Freight Corridor. The facility was flagged in the 2021-22 Federal Budget, which noted an expectation the Victorian Government would contribute to the costs of the project.

Health, education and social housing infrastructure remain key priorities

10 community hospitals and $507 million for upgrades to mental health infrastructure, including $350 million for the new Thomas Embling Hospital. The Victorian Budget also allocates $1.4 billion to education and skills infrastructure, including $492 million for the construction of 13 new schools. Housing infrastructure spend is anchored by the first stages of the Public Housing Renewal Project, which is deploying a Ground Lease Model at sites in Brighton, Prahran and Flemington.

In social infrastructure, $1.2 billion has been allocated to new and upgraded health infrastructure, with $556 million allocated for the construction and expansion of

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

30%

25,000

25%

20,000

20%

15,000

15%

10,000

10%

5,000

Infrastructure funding share

30,000

20 06 -0 7 20 07 -0 8 20 08 -0 9 20 09 -1 0 20 10 -1 1 20 11 -1 2 20 12 -1 3 20 13 -1 4 20 14 -1 5 20 15 -1 6 20 16 -1 7 20 17 -1 8 20 18 -1 9 20 19 -2 0 20 20 -2 1 20 21 -2 2 20 22 -2 3 20 23 -2 4 20 24 -2 5

Infrastructure funding ($ million)

Figure 4: Victorian general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Victoria infrastructure statistics: Value Description

24% 11.8% ▲ $45.9b $90.2b +$21.2b

Share of general government expenditure dedicated to infrastructure Decade-average share of Budget dedicated to infrastructure Above decade-average infrastructure funding level over four years to FY2023-24 Total infrastructure funding over four years to FY2023-24 Increase in infrastructure funding in this Budget

Major funding allocations in Victoria

EDUCATION

HEALTH

RAIL

$1.4 billion

$1.2 billion

$986 million

for skills infrastructure

for health infrastructure

Australian Infrastructure Budget Monitor – 2021-22

for X’Trapolis Trains

RAIL

$368 million

for Next Generation Trams

Infrastructure Partnerships Australia

2ND PLACE: NEW SOUTH WALES With $86 billion for infrastructure over four years, NSW sets a new record for the state The NSW Government has made an $85.6 billion allocation to infrastructure spending over the next four years – a new record level of infrastructure spending for the state. This represents almost $1.8 billion in capital expenditure by the state on infrastructure each month until June 2025. Illustrating how high the bar has risen in recent years, the four-year spend to FY2024-25 is $19.1 billion higher than the state’s 10-year historical average. NSW has allocated 19 per cent of its total general government expenditure to infrastructure. Despite the infrastructure allocation being $1.4 billion more than the four-year outlay in last year’s Budget, as a proportion of the total, this is a slight decrease on the 19.6 per cent allocated to infrastructure last year.

M6 Extension Stage One and $870 million for the Bradfield City Centre enabling works. Funding has also been announced for the $479 million Ryde Hospital Redevelopment and the $300 million Rouse Hill Health Service. These projects are scheduled to be completed in 2028 and 2026 respectively. The Budget also provides a continuation of funding over the next four years for major road projects, including $6.3 billion for the Western Harbour Tunnel, Beaches Link and Warringah Freeway Upgrade projects, $2.1 billion for Sydney Gateway, $1.7 billion for Princes Highway Upgrades, $1.3 billion for the M12 Motorway, which includes the Northern Road upgrade, $1.2 billion for the final stages of WestConnex and $873 million for the Newell Highway Upgrade.

Sydney Metro remains a key focus, with $26 billion allocated over four years The Budget provides substantial funding for the continuation of the Sydney Metro program, which will achieve a number of milestones over the next four years as a series of major contracts undergo procurement and move into delivery. Within this program, $12 billion is allocated to Sydney Metro West, with $2.9 billion in FY2021-22, including the major Central and Western tunnelling packages currently under procurement. A further $8 billion has been allocated to Sydney Metro – Western Sydney Airport, which will see acceleration of delivery in anticipation of the project commencing operation by 2026. In addition, $6.1 billion – including $3.1 billion in FY202122 – is allocated to complete works on the Sydney Metro – City and Southwest line, which is due to open in 2024.

Major funding continues to flow for an extensive pipeline of previously announced commitments New funding announced in the 2021-22 NSW Budget is headlined by $2.7 billion over four years for the

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

25%

20,000

20%

15,000

15%

10,000

10%

5,000

Infrastructure funding share

25,000

Infrastructure funding ($ million)

Figure 5: NSW general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

New South Wales infrastructure statistics Value Description

19% 14.8% ▲ $19.1b $85.6b +$1.4b

Share of general government expenditure dedicated to infrastructure Decade-average share of Budget dedicated to infrastructure Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Increase in infrastructure funding in this Budget

Major new funding allocations in New South Wales:

HEALTH

$10.8 billion for health infrastructure

RAIL

ROADS

$3.1 billion

$2.7 billion

for More Trains More Services

Australian Infrastructure Budget Monitor – 2021-22

for the M6 Stage One

ENERGY

$380 million

for the Renewable Energy Road Map

Infrastructure Partnerships Australia

3RD PLACE: NORTHERN TERRITORY The Northern Territory maintains a strong focus on infrastructure and retains third spot in the rankings

Transport, housing and social infrastructure remain top priorities for the NT Government

The NT Government has allocated $4.4 billion in general government spending on infrastructure over the four years to FY2024-25, including $1.3 billion in FY2021-22. This equates to 15.1 per cent of general government expenditure, which is over two percentage points higher than the 10-year average. Representing a boost of $614 million over four years for infrastructure above the Territory’s historical trend.

The 2021-22 NT Budget sees $1.3 billion committed to transport spending over four years, including $150 million for upgrades to the Carpentaria Highway and $78 million for the Central Arnhem Road.

This level of infrastructure spending is supported by a strengthening NT economy, with a $577 million improvement since the last Budget in the projected deficit, and a continued decline in the unemployment rate. The projected increase in infrastructure spending over the coming years has been inflated by an underspend over the past financial year. In FY2020-21, the NT Government spent $783 million in general government expenditure on infrastructure, representing 29 per cent of the $1.1 billion projected spend for the financial year. Funds not spent in FY2020-21 will have flowed to the current and future Budget years.

Australian Infrastructure Budget Monitor – 2021-22

The NT Budget also allocates $753 million for housing and community amenities, which is an increase of $485 million – or 184 per cent – on the allocation in last year’s Budget. This new spend is headlined by $615 million for remote Aboriginal housing across the Territory. The Budget includes $203 million for new and upgraded recreation and cultural infrastructure, including $47 million for the National Aboriginal Art Gallery in Alice Springs and $45 million for the State Square Art Gallery in Darwin. In health, $137 million has been allocated to construct and upgrade hospitals and health facilities, with $32 million for the continuing expansion of the mental health inpatient unit at Royal Darwin Hospital, and $26 million for a new ambulatory care centre at Alice Springs Hospital. In FY2021-22, allocations to the transport sector make up 46 per cent of the committed infrastructure expenditure. Investments in housing and community assets account for 27 per cent, with other social infrastructure sectors making up roughly 15 per cent. Regional and remote projects will receive 60 per cent of the Territory’s total infrastructure spending.

Infrastructure Partnerships Australia

20%

1,200

16%

900

12%

600

300

Infrastructure funding share

1,500

Infrastructure funding ($ million)

Figure 6: Northern Territory general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Northern Territory infrastructure statistics: Value Description

15.1% 13% ▲ $614m $4.4b -$4m

Share of general government expenditure dedicated to infrastructure Decade-average share of Budget dedicated to infrastructure Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Decrease in infrastructure funding in this Budget

Major new funding allocations in the Northern Territory:

TRANSPORT

$1.3 billion for transport infrastructure

SOCIAL

HEALTH

$615 million

$137 million

for remote Aboriginal housing

Australian Infrastructure Budget Monitor – 2021-22

for health infrastructure

CULTURAL

$203 million

for recreation and cultural infrastructure

Infrastructure Partnerships Australia

4TH PLACE: SOUTH AUSTRALIA A nine per cent increase in infrastructure spending sees South Australia hold onto fourth spot

The New Women’s and Children’s Hospital comprises much of SA’s social infrastructure spend

The South Australian Government allocated $14.7 billion in general government infrastructure expenditure over four years, including $3.4 billion in FY2021-22. The fouryear infrastructure spending is $1.3 billion higher than the previous SA Budget, and accounts for 14.4 per cent of total general government sector expenditure allocated in the Budget. The share of spending on infrastructure also remains comfortably higher than the 10-year average of 10.7 per cent.

The SA Budget allocates $2 billion for health infrastructure over four years, including an initial funding allocation for the $2 billion New Women’s and Children’s Hospital. This includes $84 million in FY2021-22, with expected completion of the project in FY2026-27. The $314 million Queen Elizabeth Hospital Redevelopment Stage Three has been allocated $62 million in FY2021-22, and is expected to be completed in 2024.

Encouragingly, the SA Government only indicates a $59 million underspend in FY2020-21, equating to just over two per cent of its planned spending. This is the smallest underspend reported by any state for FY2020-21.

The Budget also allocates $79 million over four years (with no allocation in FY2021-22) towards the $662 million Adelaide Riverbank Arena project. The project is expected to be completed in FY2027-28 and has had its estimated total cost revised down from $700 million.

The SA Government has laid out a strong pipeline of works for the coming decade The state’s infrastructure expenditure above historical levels is likely to continue over the medium term, with a number of major priorities expected to keep boots on the ground for years to come. Transport continues to be a focal point for the SA Government, with $8.8 billion over four years for roads and other transport projects. Chief among these priorities is $3.3 billion over four years for the finalisation of the North South Corridor project with the River Torrens to Darlington section to be delivered over the period to 2030. With a total estimated cost of $9.9 billion, this is comfortably the largest infrastructure project in the state’s history. The cost estimate for this project has increased by $1 billion following a decision to add an additional lane in each direction to the tunnels, meaning the scope is now for twin three-lane tunnels across Stage One and Stage Two of the project. Other road projects receiving funding in the Budget include $560 million for the Fleurieu Connection Improvement Package and $231 million for the Torrens Road, Ovingham Level Crossing Upgrade.

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

25%

4,000

20%

3,000

15%

2,000

10%

1,000

Infrastructure funding share

5,000

Infrastructure funding ($ million)

Figure 7: South Australian general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

South Australia infrastructure statistics: Value Description

14.4%

Share of general government expenditure dedicated to infrastructure

10.7%

Decade-average share of Budget dedicated to infrastructure

▲ $3.8b $14.7b +$1.3b

Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Increase in infrastructure funding in this Budget

Major new funding allocations in South Australia:

TRANSPORT

ROAD

HEALTH

EDUCATION

$8.8 billion

$3.3 billion

$2 billion

$665 million

for roads and public transport

for the River Torrens to Darlington project

Australian Infrastructure Budget Monitor – 2021-22

for health infrastructure

for school infrastructure

Infrastructure Partnerships Australia

5TH PLACE: AUSTRALIAN CAPITAL TERRITORY

The ACT Budget maintains a solid pipeline, with consistent levels of infrastructure spending

The ACT’s infrastructure spending is dominated by previously announced projects

The 2021-22 ACT Budget includes an infrastructure investment of $4.3 billion in general government expenditure over the four years to FY2024-25. The Territory’s share of total spending allocated to infrastructure is now at 13.1 per cent – down from 14.3 per cent in last year’s Budget – but above the 10-year historical average of 12 per cent.

The $4.3 billion commitment over four years includes $745 million for new capital works, $330 million to improve existing infrastructure, $2.3 billion to continue the capital works currently under delivery, and a further $1 billion in provisions for projects yet to receive final approvals.

For FY2020-21, the ACT Government recorded an actual capital works expenditure of $709 million, which is a 22 per cent underspend on the $914 million projected in the previous Budget. In a first for the ACT, the 2021-22 Budget has moved to a five-year budgeting and reporting cycle for its capital works program, including for general government sector infrastructure spending. The five-year total commitment for infrastructure is $5 billion. However, to maintain comparability of commitments between governments and over time, the Budget Monitor will continue to apply the standard four-year budgetary forecast.

Australian Infrastructure Budget Monitor – 2021-22

In health, the Canberra Hospital Expansion, which reached contract close in June 2021, has been allocated $549 million. In addition, the ACT Health Directorate and Canberra Health Services have been allocated a combined $318 million for capital expenditure over the four years to FY2024-25. The Education Directorate has been allocated $525 million for capital works, while Housing ACT has been allocated $150 million. In transport, ACT Light Rail Stage Two and associated enabling works have been allocated $45 million over four years. This funding is likely to grow once commercial sensitivities surrounding negotiations for delivery of the project subside. Some of this funding may be drawn from the $1 billion allocated over four years to Canberra’s Transport and City Services Directorate. Separately, the Canberra Institute of Technology Woden Campus and Bus Interchange project has $281 million profiled to FY2024-25.

Infrastructure Partnerships Australia

Figure 8: Australian Capital Territory general government infrastructure funding

Infrastructure funding ($ million)

1,200

16%

1,000 800

12%

600

400 4%

200

Infrastructure funding share

20%

1,400

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Australian Capital Territory infrastructure statistics: Value Description

13.1% 12% ▲ $361m $4.3b -$21m

Share of general government expenditure dedicated to infrastructure Decade-average share of Budget dedicated to infrastructure Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Decrease in infrastructure funding in this Budget

Major new funding allocations in the Australian Capital Territory:

TRANSPORT

HEALTH

EDUCATION

SOCIAL

$1 billion

$867 million

$525 million

$150 million

for the Transport and City Services directorate

for health infrastructure

Australian Infrastructure Budget Monitor – 2021-22

for education infrastructure

for social housing

Infrastructure Partnerships Australia

6TH PLACE: TASMANIA A slight decrease in infrastructure funding results in a small slide in the rankings for Tasmania

Tasmania’s infrastructure spend is headlined by social infrastructure commitments

Tasmania’s allocation of $3.8 billion over four years to infrastructure in the 2021-22 Tasmanian Budget represents a $47 million decrease from the commitments made in the previous year. This comes as the total general government sector expenditure in Tasmania is forecast to grow by nearly $2 billion – or six per cent. The 11.7 per cent of general government expenditure apportioned to infrastructure remains significantly higher than the ten-year average of 8.6 per cent.

The 2021-22 Tasmanian Budget sees $504 million allocated over four years for hospitals and health infrastructure. This is headlined by $110 million for an expanded Stage Two of the Royal Hobart Hospital Redevelopment and an initial funding allocation for the Launceston General Hospital Redevelopment – Stage One, with an expectation for the $500 million Stage Two to commence in FY2025-26. The New Northern Prison also sees an initial commitment of $57 million over four years, with the remaining $213 million falling outside the forward estimates.

The government registered a significant underspend on its planned infrastructure expenditure in FY202021 of $431 million, representing 40 per cent of last year’s budgeted total. This is the largest proportionate underspend reported by any jurisdiction for FY2020-21. This underspend will have artificially inflated funding figures for the coming years.

In energy, the Budget provides an update on the Battery of the Nation and Marinus Link projects, indicating both are progressing towards a final investment decision. However, no additional general government funding was allocated in this Budget for these two projects.

The largest transport project in Tasmania’s history is set to commence delivery Following many years in planning and development, the New Bridgewater Bridge is set to commence delivery over the coming years. The Tasmanian Budget allocates $30 million in FY2021-22 to commence works on the project, and a further $500 million over the forward estimates, with the Federal Government providing 80 per cent of funding. Subsequent to the Tasmanian Budget, a further cost increase was announced for the project, with the Federal Government allocating a further $167.8 million in December 2021. The new bridge is expected to open to traffic in 2025.

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

16%

900

12%

600

300

Infrastructure funding share

1,200

Infrastructure funding ($ million)

Figure 9: Tasmanian general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Tasmanian infrastructure statistics: Value Description

11.7% 8.6% ▲ $1b $3.8b -$47 m

Share of general government expenditure dedicated to infrastructure Decade-average share of Budget dedicated to infrastructure Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Decrease in infrastructure funding in this Budget

Major new funding allocations in Tasmania:

ROAD

$2 billion

for roads and bridges

SOCIAL

EDUCATION

$405 million

$336 million

for human services and housing

Australian Infrastructure Budget Monitor – 2021-22

for education infrastructure

RAIL

$242 million

for rail infrastructure

Infrastructure Partnerships Australia

7TH PLACE: QUEENSLAND for greater capital spending in future Queensland Budgets, it would come as no surprise to see Queensland climb further up the rankings over the coming years.

The majority of funding is for projects previously announced and under delivery Queensland has allocated $5.9 billion for rail projects over four years, with $3 billion to be spent through Queensland Rail. New rail funding includes $178 million for the Gold Coast Rail Line Capacity Improvement Project – Kuraby to Beenleigh, matching the Federal Government’s allocations made earlier in 2021. New road commitments in the Budget include $160 million for the Sunshine Motorway – Mooloolah River Interchange Upgrade, $60 million for the Cairns Western Arterial Road and $100 million towards the Bruce Highway Upgrade program.

Queensland falls in the rankings as infrastructure spending shrinks by nine per cent In the 2021-22 Budget, the Queensland Government allocated $31.9 billion in general government infrastructure spending over four years. While other east coast jurisdictions increased spending, the Queensland Government reduced its infrastructure investment by $3.3 billion, or nine per cent, compared to last year’s Budget. At just 11.1 per cent of total general government spending, this infrastructure expenditure falls below Queensland’s ten-year average of 11.8 per cent. This trend is likely to be reversed over the coming years, with an expected ramp up in investment to prepare the state for its 2032 Olympics hosting duties and meet the needs of its growing population. With the Federal Government promising to foot half of the bill for Olympics-related projects, and strong impetus

Australian Infrastructure Budget Monitor – 2021-22

No new funding has been provided for the Queensland Inland Freight Route between Charters Towers and Mungindi. The $200 million allocation made in last year’s Queensland Budget appears to have in part been deferred beyond the forward estimates, with $100 million allocated for ‘future priorities’ after FY2024-25. This follows the Federal Government’s 2021-22 Budget allocation of $400 million for the project falling short of the $800 million requested by the Queensland Government in 2020. Social infrastructure funding is headlined by a new $2 billion Hospital Building Fund, $1.8 billion for social housing and $1.4 billion towards education infrastructure, including $914 million over seven years to build 10 new primary and secondary schools in high-growth areas as part of the Building Future Schools Program.

Infrastructure Partnerships Australia

20%

9,000

15%

6,000

10%

3,000

Infrastructure funding share

12,000

20 06 -0 7 20 07 -0 8 20 08 -0 9 20 09 -1 0 20 10 -1 20 1 11 -1 2 20 12 -1 3 20 13 -1 4 20 14 -1 5 20 15 -1 6 20 16 -1 7 20 17 -1 8 20 18 -1 9 20 19 -2 0 20 20 -2 1 20 21 -2 2 20 22 -2 3 20 23 -2 4 20 24 -2 5

Infrastructure funding ($ million)

Figure 10: Queensland general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Queensland infrastructure statistics: Value Description

11.1%

Share of general government expenditure dedicated to infrastructure

11.8%

Decade-average share of Budget dedicated to infrastructure

▼ $2.2b $31.9b -$3.3b

Below decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Decrease in infrastructure funding in this Budget

Major new funding allocations in Queensland:

ROAD

$20.8 billion for road infrastructure

RAIL

$5.9 billion

for rail infrastructure

Australian Infrastructure Budget Monitor – 2021-22

SOCIAL

$1.8 billion

for social housing

ENERGY

$2 million

for the renewable energy and hydrogen jobs fund

Infrastructure Partnerships Australia

8TH PLACE: WESTERN AUSTRALIA The WA Government lifts infrastructure spending but remains at the bottom of the rankings The WA Budget has allocated $13.1 billion in general government expenditure to infrastructure spending over four years, including $3.5 billion in FY2021-22. The $2.2 billion jump in spending represents a 20 per cent increase on the previous Budget’s four-year allocation – the second largest proportionate increase for any jurisdiction – and sees 9.3 per cent of general government expenditure allocated to infrastructure over the four-year period. Despite this increase, WA’s average infrastructure spending share remains below the state’s 10-year historical average of 9.9 per cent.

bringing the total allocation to the program over four years to $5.7 billion. $229 million has been allocated to the High Capacity Signalling project and $220 million to the Byford Rail Extension, while the $475 million Victoria Park – Canning Level Crossing Removal program – Wharf Street package has had its funding confirmed.

This marks the fifth consecutive year that Western Australia has come in last place in the Budget Monitor rankings.

New allocations are headlined by investments in Westport and the Social Housing Investment Fund The commencement of Westport has been confirmed in this year’s WA Budget, with a $490 million allocation over four years. Of this, $400 million will be directed towards enabling works and strategic land acquisitions, while $90 million has been directed towards program development. A $750 million Social Housing Investment Fund has been established, including $228 million for a Social Housing Strategy Package, which will fund delivery, operation and maintenance of approximately 500 social housing dwellings. The total investment by the government in social housing over four years totals $2.1 billion, which is expected to support the delivery of an additional 3,300 homes. Also included in this year’s infrastructure allocation is an additional $817 million for the METRONET program,

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

15%

4,000

12%

3,000

2,000

1,000

Infrastructure funding share

5,000

Infrastructure funding ($ million)

Figure 11: Western Australia general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Western Australia infrastructure statistics: Value Description

9.3%

Share of general government expenditure dedicated to infrastructure

9.9%

Decade-average share of Budget dedicated to infrastructure

▼ $902 m $13.1b +$2.2b

Below decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Increase in infrastructure funding in this Budget

Major new funding allocations in Western Australia:

ROAD

RAIL

SOCIAL

SEA

$623 million

$475 million

$228 million

$490 million

for regional roads

for the Wharf Street Level crossing removals package

Australian Infrastructure Budget Monitor – 2021-22

Social Housing Strategy Package

for Westport

Infrastructure Partnerships Australia

FEDERAL GOVERNMENT The Federal Government’s infrastructure spending rises to new highs, with stimulus front of mind After setting a new record for infrastructure spending in last year’s Budget, boosted by a focus on small-scale, shovel-ready stimulus projects, the Federal Government have again increased its infrastructure allocation with funding for a range of previously announced, large-scale projects. The Federal Government’s total general government infrastructure funding is projected to be $56.9 billion over the four years to FY2024-25. This is $5.8 billion – or 11 per cent – higher than the equivalent figure from last year’s Budget and increases the infrastructure investment as a share of overall general government expenditure to 2.3 per cent – well-above the decade average of 1.4 per cent.

The underspend on Federal Government’s FY2020-21 infrastructure commitments totals just $98 million – or less than one per cent of planned spending. This is a considerable achievement in the midst of the COVID-19 pandemic, and given this represented an increase of over $20 billion in federal infrastructure spending over the previous financial year.

Major transport projects dominate the Federal Government’s infrastructure contributions The 2021-22 Federal Budget saw total allocations of $27 billion to roads and $12.1 billion for rail infrastructure. Key commitments in these sectors include $2.6 billion for the North-South Corridor – Anzac Highway to Darlington in South Australia and $2 billion for the Great Western Highway Upgrade between Katoomba and Lithgow in NSW. A number of smaller-scale commitments were made to urban rail projects, with funding for Gold Coast Light Rail – Stage Three and several projects within METRONET. The Federal Government also announced it would establish a $2 billion ‘contingent allocation’ for a Melbourne Intermodal Terminal to integrate with the Inland Rail Freight Corridor, which includes an option for a federal ‘equity investment’. The Federal Government expected an equivalent contribution from the Victorian Government, however no commitment was provided in the Victorian Budget. The Federal Budget also allocated $17 million over four years to establish a National Freight Data Hub. Infrastructure Partnerships Australia has been a strong advocate for a national freight data body over recent years.

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

12,000

6,000

Infrastructure funding share

18,000

Infrastructure funding ($ million)

Figure 12: Federal general government infrastructure funding

Historical and FY2021-22 Budget infrastructure funding

FY2020-21 Budget infrastructure funding

Historical and FY2021-22 Budget share of infrastructure funding

FY2020-21 Budget share of infrastructure funding

Federal Government infrastructure statistics: Value Description

2.3%

Share of general government expenditure dedicated to infrastructure

1.4%

Decade-average share of Budget dedicated to infrastructure

▲ $21.5b $56.9b +$5.8b

Above decade-average infrastructure funding level over four years to FY2024-25 Total infrastructure funding over four years to FY2024-25 Increase in infrastructure funding in this Budget

Major new funding allocations for the Federal Government:

RAIL

ROAD

WATER

ENERGY

$12.1 billion

$7.8 billion

$2.5 billion

$792 million

for rail infrastructure

for Queensland roads

Australian Infrastructure Budget Monitor – 2021-22

for water infrastructure

for ‘clean energy technologies’

Infrastructure Partnerships Australia

Australian Infrastructure Budget Monitor – 2021-22

Infrastructure Partnerships Australia

Infrastructure Partnerships Australia Suite 3.03, Level 3, 95 Pitt Street Sydney NSW 2000 PO Box R 1771 Royal Exchange, NSW 1225 infrastructure.org.au

Australian Infrastructure Budget Monitor 2021-22

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