A funding standoff between the state and federal governments has thrown the timeline of Victoria’s planned road projects into doubt, as Victorians brace for a tight budget on Tuesday.
The feud stems from an Albanese government commitment to return funding for nationally significant roads to 50:50 splits between both levels of government, rather than the 80 per cent paid for by the Commonwealth in recent years.
Transport Infrastructure Minister Danny Pearson has warned the industry and the federal government that some projects would not be able to go ahead as planned if the Commonwealth enforced this policy, according to two government sources familiar with the discussions.
The Allan government is expected to adjust the timing on parts of its infrastructure pipeline as early as Tuesday’s budget after four years of soaring cost hikes and concerns public projects are crowding out private sector investment, especially in housing.
The government sources, who spoke to The Age on the condition of anonymity to detail private discussions, said there was unlikely to be new money for roads outside maintenance and election commitments.
It comes as tender documents, seen by The Age, show the state government will splash almost $700,000 on crisis communication consultants to brief infrastructure bureaucrats at a time when regional Victorians are furious at the status of country roads, including major highways.
One road project that could be delayed as a result of the state and federal funding spat is the final section of the Western Freeway upgrade between Melton and Caroline Springs.
The federal government has committed $10 million for a business case on that upgrade, but one source said it was uncertain whether state money could be found for its delivery given the final bill for multiple road projects had nearly doubled recently due to surging material and labour costs.
section of the Western Highway upgrade, from Ararat to Stawell, has already received an additional $99 million in federal funding following the infrastructure review, taking the federal government’s contribution to $598 million.
Asked about the funding split and potential for project delays on Sunday, a Victorian government spokesperson said designs and modelling were underway for the freeway upgrade between Melton and Caroline Springs. The spokesperson added that the highway upgrade between Buangor and Ararat was on hold due to the creation of a new cultural heritage management plan.
Federal Transport Infrastructure Minister Catherine King said last week there would be money for new road and rail projects in the upcoming budget.
But the funding split has thrown doubt over whether the state can afford to match Commonwealth contributions. Victoria’s state budget will be unveiled on Tuesday, while the federal budget will be handed down a week later, on Tuesday, May 14.
Premier Jacinta Allan on Sunday said while she couldn’t pre-empt the federal government’s infrastructure allocations, she was determined to ensure Victoria gets its fair share.
“We are in ongoing discussions with them about the projects that we have here,” Allan said. “Good, strong projects that are supporting jobs and … providing for a better-connected state.”
Speaking at a Roads Australia forum in Melbourne last week, King said one of the most common requests from state governments was more road maintenance funding.
“Part of the funding that is there is the maintenance funding for the national road network, or national highways, [and it] hasn’t been indexed since 2013, which came as somewhat of a surprise to me,” King said.
“I think it is entirely reasonable for states and territories to suggest that the Commonwealth, in terms of the maintenance of large-scale road networks – where we are very reliant on our heavy vehicle transport network to use – that there should be more money from the Commonwealth for the maintenance of that thing. That’s been one of the focuses we have had.”
King said the Commonwealth’s infrastructure review meant there would be money for new road and rail projects in the upcoming budget but did not specify which ones.
Senior members of the Allan government have previously said King, the federal member for Ballarat, would be turning her back on her own state if she insisted on a 50:50 funding split. Federal opposition infrastructure spokeswoman Bridget McKenzie has also said a change in the funding split would hurt regional people and force states to take on more debt.
Meanwhile, state government tender documents published last month show the bureaucrats in charge of Victoria’s major transport infrastructure projects hope to spend about $694,000 on external crisis management services.
Opposition transport infrastructure spokesman David Southwick said this was too much money given the government already employed communications staff.
“Labor’s continued waste and mismanagement on major projects is starving funding from critical health, education, community safety and local infrastructure projects across the state.”
A Victorian Infrastructure Delivery Authority spokesperson insisted the money would be spent responsibly and would prepare staff for crises such as a terrorist attack or tunnel collapse. They said major sporting facilities and hospitals conducted similar training.
Victorian Treasurer Tim Pallas is expected to deliver a tight budget on Tuesday given the state’s debt hit $115 billion in the last financial year. Interest repayments in Victoria are now costing taxpayers $10 million a day. Major projects such as level crossing removals face delays and many agencies – from mental health to tourism – are bracing for cuts.
“Inflationary impact affects us all,” Allan said on Sunday. “And in framing Tuesday’s budget, we can’t ignore those pressures. We can’t wish them away. We need to address them.”
The Age Newspaper
