- The Federal Government is ramping up infrastructure spending, which would create job opportunities and keep businesses afloat.
- In addition to an investment of AUD 100 billion over ten years from 2019-20, the government has announced funding packages to spur infrastructure-related activities.
- Treasurer Josh Frydenberg has stated that Australia is expected to experience the most significant deficit since World War II. The government has pushed the Federal Budget 2020-2021 to October.
- To meet the demands of growing population in a post-pandemic world, Australia needs to be better prepared with job opportunities and infrastructure.
The Federal Government is spending AUD 100 billion over a 10-year period from 2019-20 for upgrading nationwide infrastructure to better prepare for the future. Now, the government is looking to expand this infrastructure investment program to boost the economy and create more job opportunities to address the uncertain and challenging times ahead.
Infrastructure rebuilding through ramping up infrastructure spending is the critical agenda of the government's plan to kick-start the economy post-pandemic period.
Infrastructure Investment Response to Pandemic
The government is closely working with local government authorities to administrate the project pipeline in the infrastructure sector. It is also looking for more opportunities to support local jobs and businesses and help the regions trying to recover from the pandemic impacts.
The Federal Government is committed to supporting jobs by providing AUD 1.5 billion in infrastructure investment. The funding comprises AUD 1 billion for projects commencing in a six-month period and AUD 500 million for Targeted Road Safety Works to be completed in 12 months.
Moreover, this funding complements the commitments towards $500 million for local road and community infrastructure projects.
Economic Recovery Depends on Robust Land Transport Network
Successful networking through land transport is crucial for the economic prosperity of Australia. It should be safe and reliable for people and companies to connect. Land connectivity is needed for efficient movement of people and products. Moreover, it connects employees to their jobs and homes.
Australia's economic prosperity is dependent on several factors, including a strong land transport network that safely and reliably connects people and businesses. It should connect the domestic and global export markets.
Other Initiatives of Government's Safety Package
Via the new Local and State Government Road Safety Package, the government had also introduced an additional investment of AUD 2.2 billion in the 2019-20 budget to improve road safety.
Government's 2019–20 Budget Safety Package included:
- Road Safety Innovation Fund (AUD 12 million) and Road Safety Awareness and Enablers Fund (AUD 4 million).
- Investment in Heavy Vehicle Safety Initiatives (AUD 22.1 million), and Keys2drive (AUD 8 million).
- AUD 8 million to support local governments.
Communications and Transport Infrastructure
The Federal Government spending on communications and transport for 2019–20 was estimated at AUD 9.0 billion, including
- Transport infrastructure spending on roads at AUD 5.6 billion, and for rail transport at AUD 1.0 billion
- Air and sea transport at AUD 0.8 billion
- Expenditure related to communications programs and support for the digital economy at AUD 1.5 billion
The total expenditure on transport and communications is anticipated to increase by 15 per cent between 2019–20 and 2022–23. The growth will mostly be driven by rail and roads infrastructure funding. Rail transport funding is likely to increase by 69.3 per cent, and road transport funding to go up by 17.3 per cent during the same period.
Other than infrastructure projects, PM Scott Morrison has committed to invest AUD 270 billion in defence over a period of 10 years. The Prime Minister has also warned Aussies to be prepared for a poorer, disordered, and dangerous world post the pandemic.
The 2020-2021 Budget Postponed Until October
Due to the ongoing pandemic, the government is overburdened financially. Several support packages worth billions of dollars have been rolled out across sectors, to aid individuals and businesses struggling with the pandemic impacts. At a time when economic activities are paralysed, the government is pouring funding to help the nation sail through the unprecedented crisis.
Recently, Treasurer Josh Frydenberg stated that Australia is facing the most significant deficit since World War II and the budget would be in the red by AUD 85.8 billion in 2019-20.
The government has delayed the Federal Budget 2020-2021 until October 2020. Treasury has predicted the unemployment rate to grow by 9.25 per cent in December 2020.
Population of Aussies is growing, and there would be challenges to support the growing population with jobs and infrastructure, which must be powerful enough for maintaining robust growth in national income.
Indeed, the COVID 19 pandemic has created more challenges for the Australian economy. Now, there is more requirement of jobs and better infrastructure to recover from the impacts of the ongoing epidemic. Infrastructure investment is expected to provide several opportunities such as jobs while keeping businesses afloat.