Infrastructure Spending, A Major Element for Post-Pandemic Economic Recovery

August 01, 2020 12:40 AM AEST | By Kunal Sawhney
Follow us on Google News:


  • 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.

Must Read: Australia’s AAA credit rating – 3 factors that can derail the position

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.

Must Read: Australia to record biggest postwar deficit in 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.

Good Read: Global Infrastructure Stocks in Focus Amid Potential $1 Trillion US Package Under Phase 4


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK