Notwithstanding the scale of the forecast Budget deficit, the Australian Government remains committed to significant spending on infrastructure and other reforms relevant to infrastructure.
Overview of the economy
The Budget Papers note that:
- the Australian economy has proved remarkably resilient to the ongoing impacts of the pandemic;
- a strong economic recovery is underway, notwithstanding the pandemic and new shocks, such as the recent floods in Queensland and New South Wales and the Russian invasion of Ukraine;
- economic growth forecasts have been revised upwards, driven by stronger-than-expected momentum in the labour market and consumer spending. Real GDP is expected to grow by 4.25% in 2021-22, 3.5% in 2022-23 and 2.5% in 2023-24;
- the unemployment rate reached 4% and the participation rate reached a record high of 66.4% in February 2022. The continued recovery in economic activity is expected to see the unemployment rate reach 3.75% in the September quarter of 2022, nearly 3 percentage points below the Budget forecast from 2 years ago and the lowest level in close to 50 years;
- Australia has been affected by global inflationary pressures such as elevated oil prices and supply chain disruptions, but domestic inflationary pressures are more moderate than in a number of other advanced economies. Headline inflation in Australia picked up in 2021 to be 3.5% to the December quarter. Australia’s inflation is expected to moderate from 4.25% in 2021-22 to 3% in 2022-23 and 2.75% in 2023-24; and
- recent strength in the price of Australia’s key export commodities, will see Australia’s terms of trade reach a record high in 2021-22. This will support strong profitability in the mining and agricultural sectors, with some positive flow through to the broader economy.
Infrastructure spending
The focus of the “hard” infrastructure spend in this Budget is:
- for States and Territories – A$17.9 billion of priority road and rail infrastructure as part of the A$120 billion 10-year infrastructure investment pipeline;
- for regional Australia - targeted stimulus (spread across Northern Territory, Western Australia, Queensland and NSW) including A$7.1 billion for transformative infrastructure projects in 4 four regions identified as growth centres;
- regional communications upgrade initiatives;
- the national water grid; and
- developing a circular waste economy.
Interestingly, the Budget also includes funding:
- to support increased private sector investment in low emissions technologies including hydrogen, the continued development of a hydrogen Guarantee of Origin scheme, and the development of a Biodiversity Stewardship Trading Platform to support farmers to undertake biodiversity activities ahead of the introduction of a voluntary biodiversity stewardship market;
- to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia;
- to accelerate the development of priority gas infrastructure projects consistent with the Future Gas Infrastructure Investment Framework and support investment in carbon capture and storage pipeline infrastructure; and
- funding to progress negotiations with the states and territories on bilateral agreements for single touch environmental approvals and remove duplication by accrediting states and territories to carry out environmental assessment and grant approvals for Commonwealth matters.
A summary of major initiatives is set out below.
State and Territory infrastructure commitments
A$3.3 billion from 2021‑22 to fund priority road and rail projects in New South Wales.
Increases the Government’s total commitment to transport infrastructure in New South Wales to $48.5 billion since 2013‑14.
Funding includes:
- A$1.0 billion for the Sydney to Newcastle – Tuggerah to Wyong Faster Rail Upgrade;
- A$352.0 million for the Milton Ulladulla Bypass;
- A$336.0 million for the Pacific Highway, Wyong Town Centre;
- A$300.0 million for Grade Separating Road Interfaces;
- A$264.0 million for the Newell Highway Heavy Duty Pavement Upgrades – North Moree;
- A$232.5 million for Mulgoa Road Stage 2 – Glenmore Parkway to Jeanette Street, Stage 5A Blaikie Road to Jamison Road and Stage 5B Jamison Road to Union Road;
- A$100.0 million for the Southern Connector Road, Jindabyne;
- A$95.6 million for Picton Bypass and Picton Road – Planning;
- A$77.5 million for Sydney Metro – Western Sydney Airport – Stage 2 Business Case;
- A$75.0 million for the Wakehurst Parkway;
- A$65.0 million for the Hume Highway Intersection Upgrade, M5 Motorway – Moorebank Avenue;
- A$51.2 million for the Central Coast Highway – Tumbi Road Intersection Upgrade;
- A$30.0 million for the Tenterfield to Newcastle Corridor Upgrade;
- A$25.0 million for Richmond Road Stage 1 – Elara Boulevard to Heritage Road, Marsden Park.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – New South Wales.
A$3.4 billion from 2021‑22 to fund priority road and rail projects in Victoria.
Increases the Government’s total commitment to transport infrastructure in Victoria to A$35.5 billion since 2013‑14.
Funding includes:
- A$1.2 billion for delivery of the Beveridge Interstate Freight Terminal;
- A$920.0 million for the Outer Metropolitan Ring Rail South;
- A$740.0 million for the delivery of the Western Interstate Freight Terminal;
- A$280.0 million for the Beveridge Interstate Freight Terminal road connections, including Camerons Lane;
- A$109.5 million for the Mickleham Road Upgrade;
- A$45.0 million for Ballarat to Ouyen Corridor Upgrade;
- A$23.1 million for the Canterbury Road Upgrade.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – Victoria.
A$3.3 billion from 2021‑22 to fund priority road and rail infrastructure projects in Queensland.
Increases the Government’s total commitment to transport infrastructure in Queensland to over A$35.9 billion since 2013‑14.
Funding includes:
- A$1.6 billion for the Brisbane to the Sunshine Coast – Beerwah‑Maroochydore Rail Extension;
- A$1.1 billion for the Brisbane to the Gold Coast – Kuraby‑Beenleigh Faster Rail Upgrade;
- A$190.0 million for the Mount Isa to Rockhampton Corridor Upgrade;
- A$114.4 million for the Tennant Creek to Townsville Corridor Upgrade
- A$68.5 million for the Cooktown to Weipa Corridor Upgrade
- A$36.2 million for the Wyaga Creek Flood Improvement Project
- A$31.6 million for the Cairns to Northern Territory Border Corridor Upgrade
- A$27.2 million for Bruce Highway Upgrade – Business Cases, including Anzac Avenue to Uhlmann Road, Buchanan Road to Caboolture Bribie Island Road, and Uhlmann Road to Buchanan Road
- A$22.5 million for the Brisbane Olympic and Paralympic Games 2032 – Business Case Development
- A$19.1 million for the Townsville to Roma Corridor Upgrade
- A$14.4 million for the Phillips Creek Bridge Replacement Project
- A$11.0 million for the Coomera Connector Future Stages Business Case.
This is in addition to funding provided to Queensland through the measure titled Infrastructure Investment.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – Queensland.
A$1.7 billion over from 2021‑22 to fund priority road and rail projects in Western Australia.
Increases the Government’s total commitment to transport infrastructure in Western Australia to A$20.2 billion since 2013‑14.
Funding includes:
- A$441.2 million for the METRONET, including the Thornlie‑Cockburn Link, High Capacity Signalling, Morrison Road Level Crossing Removal and the Yanchep Rail Extension projects;
- A$320.0 million for Stages 2 and 3 of the Bunbury Outer Ring Road;
- A$200.0 million for Stage 3 of the Tonkin Highway Extension;
- A$178.0 million for Stages 1 and 2 of the Pinjarra Heavy Haulage Deviation;
- A$145.0 million for the Thomas Road Dual Carriageway, South Western Highway to Tonkin Highway and the Interchange at Tonkin Highway;
- A$140.0 million for Regional Road Safety Upgrades;
- A$50.0 million for the Tonkin Highway – North Ellenbrook Interchange;
- A$48.0 million for Moorine Rock to Mount Holland Road Upgrades;
- A$40.0 million for Newman to Katherine Corridor Upgrade – Great Northern Highway Upgrade – Newman to Port Headland Overtaking Lanes;
- A$25.0 million for the Fremantle Traffic Bridge – Swan River Crossing;
- A$25.0 million for the Perth CBD Transport Plan – Causeway Bridge;
- A$22.4 million for the Mid‑West Secondary Freight Network.
This is in addition to funding provided to Western Australia through the measure titled Infrastructure Investment.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – Western Australia.
A$2.8 billion from 2021‑22 to fund priority road projects in South Australia.
Increases the Government’s total commitment to transport infrastructure in South Australia to A$13.7 billion since 2013‑14.
Funding includes:
- A$2.3 billion for the North‑South Corridor – Darlington to Anzac Highway;
- A$200.0 million for Marion Road – Anzac Highway to Cross Road;
- A$120.0 million for the Adelaide Hills Productivity and Road Safety Package;
- A$60.0 million for South East Freeway Managed Motorways – Stage 2;
- A$60.0 million for Targeted Investments to Improve National Supply Chain Resilience;
- A$50.0 million for the Rural Roads Package including the Horrocks Highway Corridor and Safety Package;
- A$20.0 million for the Marion Road and Sir Donald Bradman Drive Intersection Upgrade;
- A$16.2 million for the Port Augusta to Perth Corridor Upgrade;
- A$16.0 million for the Main South Road Productivity Package;
- A$9.6 million for the South Eastern Freeway Safety Upgrade.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – South Australia.
A$639.9 million from 2022‑23 to fund priority road and rail projects in Tasmania
Increases the Government’s total commitment to transport infrastructure in Tasmania to over A$4.5 billion since 2013‑14.
Funding includes:
- A$336.0 million for the Tasmanian Roads Package – Northern Roads Package – Stage 2;
- A$100.0 million for Great Eastern Drive Tourism Support – Additional Packages;
- A$96.0 million for the Tasmanian Freight Rail Revitalisation Program – Tranche 4;
- A$56.0 million for the Tasmanian Roads Package – Tasman Highway Sideling Upgrade – Stage 2;
- A$24.0 million for the Bell Bay Line – reconnection to the Bell Bay Wharf;
- A$14.4 million for the Melba Line Bulk Minerals Rail Hub;
- A$13.5 million for the Hobart – Northern Transit Corridor Solution.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – Tasmania.
A$237.0 million from 2022‑23 to fund priority road projects in the Northern Territory
Increases the Government’s total commitment to transport infrastructure in the Northern Territory to A$3.7 billion since 2013‑14.
Funding includes:
- A$132.0 million for Central Australian Tourism Roads;
- A$55.0 million for the Tiger Brennan Drive and Berrimah Road Intersection Upgrade;
- A$50.0 million for Alice Springs to Halls Creek Corridor Upgrade.
This is in addition to funding provided to the Northern Territory through the measure titled Infrastructure Investment.
Builds on the 2021‑22 Budget measure titled Infrastructure Investment – Northern Territory.
A$51.0 million from 2022‑23 to fund priority road projects in the Australian Capital Territory.
Increases the Government’s total commitment to transport infrastructure in the Australian Capital Territory to over A$1.3 billion since 2013‑14.
Funding includes:
- A$46.7 million for the Athllon Drive Duplication;
- A$2.8 million for Kent Street and Novar Street Intersection Upgrades;
- A$1.5 million for the Inner Canberra Corridor Planning Package.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment and the 2021‑22 Budget measure titled Infrastructure Investment – Australian Capital Territory.
Regional infrastructure initiatives
Regional stimulus
A$7.1 billion over 11 years from 2022‑23 to support existing programs and provide stimulus to the economies of four key regional hubs across Australia.
The four regions are:
- Northern Territory: Funding for infrastructure projects that support the manufacturing industry, promote the onshore processing of critical minerals and to strengthen the region’s position as an industrial and renewable energy hub;
- North and Central Queensland: Funding for investment in water infrastructure and supply chain projects that promote water security and open up agriculture and industry growth opportunities;
- Pilbara region (Western Australia): Funding for infrastructure projects that support the mining, mineral processing and manufacturing sectors and accelerate growth in the hydrogen and renewable energy industries;
- Hunter region (New South Wales): to fund transport infrastructure projects that will improve supply chain efficiencies and help diversify the economy, building on the region’s existing strengths and facilitating the development of new industries.
Investment will be targeted at strategic infrastructure projects that drive economic and jobs growth in existing and emerging industries. Program funding will focus on connecting infrastructure and developing supply chains to ensure long‑term economic and national security.
Priority regional infrastructure initiatives
A$1.5 billion over 10 years from 2021‑22 to fund priority infrastructure projects across Australia.
Funding includes:
- A$678.0 million in additional funding for the Outback Way in the Northern Territory, Queensland and Western Australia;
- A$385.4 million in additional funding for the Northern Australia Roads Program;
- A$180.1 million to establish the Regional Australia Level Crossing Safety Program and support activities under the National Railway Level Crossing Safety Strategy to improve level crossing safety in regional Australia;
- A$150.0 million for the Inland Rail Interface Improvement Program;
- A$40.0 million in additional funding for the Bridges Renewal Program;
- A$6.5 million for the Australian Automobile Association to conduct on‑road emissions testing of light vehicles
- A$6.0 million for the Amy Gillett Foundation Program to improve road safety for cyclists.
Builds on the 2021‑22 MYEFO measure titled Infrastructure Investment.
South East Queensland City Deal
A$680.6 million over 11 years from 2022‑23 to support projects under the South East Queensland (SEQ) City Deal that enhance transport and digital infrastructure to deliver a better connected region, create jobs and improve liveability in the SEQ region. Project approvals are dependent on agreements with the Queensland State Government and applicable councils. Australia Government funding includes transport, waste and recycling, housing, liveability, pedestrian infrastructure, digital connectivity and innovation projects.
Albury-Wodonga Regional Deal
An additional A$83.2 million over 5 years from 2022‑23 to support projects under the Albury Wodonga Regional Deal to unlock economic benefits and opportunities in the region
Northern Australia Infrastructure Fund
A further A$2.0 billion will be provided to the Northern Australia Infrastructure Facility (NAIF) to finance critical infrastructure projects that drive economic development and investment in Northern Australia. This brings total Commonwealth funding for the NAIF to A$7.0 billion.
The Government will also expand the NAIF’s geographic boundaries to enable it to provide financing to the Indian Ocean Territories of Christmas Island and the Cocos (Keeling) Islands.
Water infrastructure initiatives
National Water Grid Funding
A$6.9 billion from 2021‑22 to expand the investment in nationally significant, transformational water infrastructure projects to assist in developing regional communities.
Funding includes:
- A$5.4 billion for Hells Gates Dam, Queensland
- A$600.0 million for Paradise Dam Improvement, Queensland
- A$433.0 million for Dungowan Dam and Pipeline, New South Wales
- A$300.6 million for the Darwin Region Water Supply Infrastructure Program – Stage 1, Northern Territory
- A$126.5 million for Emu Swamp Dam and Pipeline, Queensland
- A$13.7 million for the Don Irrigation Scheme, Tasmania
- A$7.1 million for the Adelaide River Catchment Water Allocation Plan, Northern Territory
- A$5.0 million for the Northern Water Supply Business Case, South Australia
- A$0.8 million for the Collie to Coast Business Case, Western Australia
- A$0.5 million for the McLaren Vale Irrigation Water Security Business Case, South Australia.
Costs of the measure will be partially met from unallocated funds within the National Water Grid Fund.
Increases the total funding provided for the National Water Grid Fund to A$8.9 billion.
Builds on the 2021‑22 MYEFO measure titled National Water Grid Fund – project funding and the 2021‑22 Budget measure titled National Water Grid – new projects.
Water –the Murray‑Darling Basin
A further A$139.9 million over 3 years from 2021‑22 to continue investments to achieve a sustainable Murray‑Darling Basin (Basin) by improving river health, enhancing environmental water outcomes and stimulating economic activity in Basin communities.
Funding includes:
- A$97.0 million over 2 years from 2022‑23 for community‑driven infrastructure projects to improve river health, promote agricultural productivity, and support adaptation to changing water demands;
- A$35.1 million over 3 years from 2021‑22 to better deliver environmental water to high value ecosystems in the Edward‑Wakool region;
- A$3.2 million over 2 years from 2022‑23 to improve water compliance, through the Office of the Inspector General for Water Compliance field officers network; and
- A$2.1 million in 2022‑23 to deliver the water market reform roadmap to improve governance and integrity of Basin water markets, and market information, in response to the ACCC’s Murray‑Darling Basin Water Markets inquiry.
Builds on the 2021‑22 MYEFO measure titled Murray‑Darling Basin – improving infrastructure and environmental outcomes and the 2021‑22 Budget measure titled Murray‑Darling Basin – managing water resources.
North Queensland Water Infrastructure Authority
A$11.6 million over 5 years from 2022‑23 to continue to fund the North Queensland Water Infrastructure Authority and expand its remit to support the development and delivery of water infrastructure in North Queensland.
Energy and Emissions Reduction
A further A$446.1 million over 5 years from 2021‑22 to increase energy security, maintain affordable and reliable power for households and businesses and reduce the cost of deploying low emissions technologies, consistent with Australia’s Long Term Emissions Reduction Plan.
Funding includes:
- A$247.1 million over 5 years from 2021‑22 (and A$0.3 million per year ongoing) to support increased private sector investment in low emissions technologies including hydrogen, the continued development of a hydrogen Guarantee of Origin scheme, and the development of a Biodiversity Stewardship Trading Platform to support farmers to undertake biodiversity activities ahead of the introduction of a voluntary biodiversity stewardship market;
- A$148.6 million over 5 years from 2022‑23 to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia; and
- A$50.3 million over 2 years from 2022‑23 to accelerate the development of priority gas infrastructure projects consistent with the Future Gas Infrastructure Investment Framework and support investment in carbon capture and storage pipeline infrastructure.
To support market confidence, the Clean Energy Regulator will streamline the process for existing Emissions Reduction Fund (ERF) fixed delivery contract holders seeking to take advantage of higher voluntary private market prices, with no change to the quantum of funding available under the Emissions Reduction Fund or Climate Solutions Fund.
The Government will also release Australian crude oil stocks held in the United States Strategic Petroleum Reserve in response to an International Energy Agency declared collective action, and seek to replenish storage of refined products (petrol, diesel and jet fuel) and purchase replacement oil stocks at a later date.
Circular waste economy
A$83.1 million over 5 years from 2022‑23 to support the transformation of Australia’s waste and recycling sector and expedite Australia’s transition to a more circular waste economy.
Funding includes:
- A$60.4 million over 4 years from 2022‑23 to boost Australia’s plastics recycling capabilities through state‑of‑the‑art technologies and advanced recycling solutions for problematic plastics under the Recycling Modernisation Fund;
- A$18.2 million over 5 years from 2021‑22 to develop and promote a ‘ReMade in Australia’ brand and certification scheme that supports Australians to buy quality, locally‑recycled products; and
- A$4.4 million over 2 years from 2022‑23 to support the delivery of the Government’s waste export ban by reducing licence assessment timeframes and helping industry to meet regulatory requirements.
Large Vessel Infrastructure and Submarine Basing
A$4.3 billion to deliver Western Australia’s first large‑vessel dry berth, which will support the construction and sustainment of naval vessels in Australia and support a stronger commercial shipbuilding and sustainment industry in Western Australia.
Other measures include:
- a commitment to build a new submarine base on the east coast of Australia to support Australia’s future nuclear‑powered submarines and has identified Brisbane, Newcastle and Port Kembla as the preferred sites. The Department of Defence will engage with state and local governments to determine the optimal site, informed by the work of the Nuclear‑Powered Submarine Taskforce; and
- Steps are being taken to secure additional land in Adelaide on which to build the Nuclear‑Powered Submarine Construction Yard, in particular land adjacent to the existing Osborne North Shipyard.
Airport initiatives
There are a series of measures relevant to airports including:
- an additional A$25.2 million over 2 years from 2022‑23 to maintain appropriate oversight and environmental management at Commonwealth leased airports to ensure compliance with airport building control and environmental regulations. Funding includes A$16.3 million over 2 years from 2022‑23 to support airport building control services, including during peak construction at Western Sydney Airport and A$8.9 million over 2 years from 2022‑23 to continue to support airport compliance with environmental standards; and
- an additional A$543.5 million over 2 years from 2021‑22 to continue to support the aviation sector as part of the Government’s response to the sector’s recovery from the COVID‑19 pandemic. This will continue essential services to regional communities and other operations across the sector. Funding includes:
- A$495.0 million in 2022‑23 as an equity investment to Airservices Australia to continue to provide critical air navigation, air traffic control, aviation, and fire and rescue services at major Australian airports;
- A$28.5 million over 2 years from 2021‑22 to extend the Regional Airports Screening Infrastructure program to assist regional airports to meet the costs of mandatory security screening requirements until 31 December 2022;
- A$20.0 million in 2021‑22 to support the Civil Aviation Safety Authority’s critical safety regulatory functions and services for the aviation industry; and
- extending the Regional Airline Network Support program to 30 June 2022 to ensure regional communities continue to receive essential air services.
Telecommunications
A$1.3 billion over 6 years from 2021‑22 to improve regional telecommunications, including through providing greater mobile coverage and targeted solutions to address issues such as mobile congestion. This initiative is part of the Government’s response to the 2021 Regional Telecommunications Review.
Funding includes:
- A$811.8 million over 5 years from 2022‑23 to the Department of Infrastructure, Transport, Regional Development and Communications to expand mobile coverage, connectivity, resilience and affordability in regional Australia, building on existing programs including the Mobile Black Spot Program and the Regional Connectivity Program;
- A$480.0 million for NBN Co to upgrade its fixed wireless and satellite networks to improve services in regional, remote and peri‑urban Australia;
- A$1.8 million in 2022‑23 to the Australian Competition and Consumer Commission (ACCC) to conduct a review of mobile tower access fees; and
- A$4.8 million in 2022‑23 to extend the Mobile Network Hardening Program to fund telecommunications network resilience upgrades in regional Australia.
Streamlining Environmental Protections and Modernising Indigenous Cultural Heritage Protections
A$139.6 million over 4 years from 2022‑23 (and A$3.2 million per year ongoing from 2026‑27) to progress reforms and maintain timely assessments and approvals under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and modernise cultural Indigenous heritage protections under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (ATSIHP Act).
Funding includes:
- A$62.3 million over 4 years from 2022‑23 (and A$0.7 million per year ongoing) to establish and administer up to 10 bioregional plans under the EPBC Act at priority regional locations;
- A$27.9 million in 2022‑23 to maintain timely environmental assessments and approvals under the EPBC Act:
- A$11.0 million over 2 years from 2022‑23 to modernise Indigenous cultural heritage protections and maintain timely decisions under the ATSIHP Act;
- A$10.0 million in 2022‑23 to progress negotiations with the states and territories on bilateral agreements for single touch environmental approvals and remove duplication by accrediting states and territories to carry out environmental assessment and grant approvals for Commonwealth matters; and
- A$9.5 million over 4 years from 2022‑23 (and A$2.5 million ongoing) to enhance environmental compliance and enforcement capabilities under the EPBC Act.
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