Infrastructure review finds billions in cost pressures

Multiple federal infrastructure projects are on the chopping block in a bid to ease inflation, with a review finding billions of dollars worth of overruns.

An independent review of the infrastructure investment program has found $33 billion of budget blowouts, with that figure tipped to grow even further.

Infrastructure Minister Catherine King said the investment pipeline, which had increased from 150 to 800 projects under the previous government, had not been managed well.

However, the minister did not say how many infrastructure projects would be cut.

“It is simply just not sustainable for the pipeline to continue the way that it is after a decade of being used for political purposes,” she told ABC radio on Monday.

“There’s been evidence that this infrastructure pipeline has not been managed and not been managed well, and obviously, that is also causing inflation pressures.”

The review looked at about 200 infrastructure projects, with recommendations being made about cancelling some.

“It’s made some recommendations around making sure we’ve got planning money and we slow the process down so we know what the costs are,” Ms King said.

“We have to do this in partnership, we have to do it in collaboration with states and territories. They are partners with us, we are investors alongside them.”

The minister indicated talks were under way with each jurisdiction on what projects would still be needed.

“What I don’t want to do is promise people that we’re going to build something when it clearly is not going to be built,” she said.

The infrastructure pipeline was estimated to be worth more than $120 billion.

Ms King announced a 90-day review of the pipeline in May in a bid to make the program more sustainable.

At the time, 162 programs in the pipeline had a government commitment of $5 million or less.

Projects that had been announced in the budget or had already started construction were not impacted by the review.

Opposition infrastructure spokeswoman Bridget McKenzie hit out at the government for not specifying which projects would be affected.

“The prime minister needs to guarantee that projects to assist with the congestion in our crowded cities and suburbs will not be cut,” she said.

“The projects that are under review are in the planning stage, they haven’t started construction, therefore are not putting pressure on inflation.

“Local governments and grassroot organisations have already been waiting too long to find out if their local community building projects have fallen victim to Albanese’s razor gang.”

Chief executive of the Australian Constructors Association Jon Davies said critical infrastructure projects could not afford to be cut.

“With over 500,000 migrants predicted to enter the country this year, we cannot afford to cut back on building schools, hospitals and transport infrastructure,” he said.

“We could afford to build everything we need, without any significant inflationary impact, if we focus on improving the construction industry’s productivity.”


Andrew Brown
(Australian Associated Press)


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