VIC State Budget 2017-18 | Infrastructure

By Craig Whatman - May 2, 2017

The government is forecasting a 28% increase in infrastructure spending during the 2017-18 financial year in comparison to last year’s Budget.

Infrastructure projects deliver multiple benefits to the state. They create jobs, enable the provision of services, allow efficiencies and improve the social amenity of the state generally.

Given the time lags often involved between the announcement of a project and its delivery, it is pleasing to see that new projects have been announced in the current Budget. Importantly, the announcement of new projects ensures that there is a pipeline of work and opportunities for businesses in the state into the foreseeable future. 

This is will continue to be important as jobs are shed in industries such as the automotive manufacturing sector, which will cease production in Victoria within the next six months. As previously announced projects have come on line, this has contributed significantly to the prosperity of the Victorian economy.

Approximately $11.4bn is earmarked for infrastructure investment during the 2017-18 financial year.  Of this, approximately $9.3bn relates to existing projects and $2.1bn relates to new projects. As the table below shows, this represents a 28% increase from the previous Budget estimates.

Infrastructure investment by total estimated investment – summary ($ thousand)

 

Sector

Estimated expenditure 2016-17

Estimated expenditure 2017-18

General government

New projects

1 404 468

1 215 269

Existing projects

3 021 786

4 708 066

Public non-financial corporations

New projects

967 305

875 395

Existing projects

3 468 033

4 550 722

Total new projects

2 371 773

2 090 664

Total existing projects

6 489 819

9 258 788

Total projects

8 861 592

11 349 453

 

Transport infrastructure

Transport continues to be a key component of the infrastructure initiatives announced by the government. It is the one area that is always guaranteed to attract the attention of voters, for better or for worse, which is understandable as it impacts all levels of the community.

As always, the delivery of a safe, reliable and efficient transport system provides multiple benefits to the community. A number of projects such as the level crossing removals and road widening projects are up and running, and work on the Metro Rail project has also commenced. 

The government is to be commended for its continued efforts to improve the transport infrastructure of the state for the benefit of all Victorians. The key projects announced in the current Budget cover both road and rail initiatives in both metropolitan and regional Victoria.

Road

The long awaited ‘missing link’ connecting the Greensborough Ring Road with the Eastern Freeway will get a boost, with $100m earmarked for planning and early works.

Another $300m has been earmarked for the Mordialloc Bypass to link the Dingley Bypass with the Mornington Peninsula Freeway. Work on this project is scheduled to commence in 2019 and completion is expected by 2022.

A further $531m has been committed to regional roads, with upgrades planned for the Great Ocean Road, Henty Highway and South Gippsland Highway.

Other smaller initiatives, such as $10m towards the Shepparton bypass, will see the benefits spread more broadly across the state.

Rail

Road expenditure is almost comparable to rail expenditure, where more than $1.4bn has been allocated for regional rail upgrades. These include a new Surf Coast rail link and a $531m upgrade to the Gippsland line. The Treasurer has confirmed that not all of this expenditure is funded and it will require additional funding from the Federal Government. If federal funding is not forthcoming, some or all of the projects may not go ahead.

An additional $10m has been earmarked for investigations into the Airport Rail Link. After many years of deliberation, it remains to be seen whether this project will see the light of day any time soon.

A commitment has also been made to acquire new trams and to refurbish existing rolling stock.

What it means for you

Victoria already has a strong construction sector and the government’s infrastructure announcements will allow for further growth in construction opportunities.

Businesses in the construction and building industries, as well as associated service industries, should welcome these ongoing transport infrastructure announcements as they will provide opportunities for growth and jobs for the Victorian economy.

Middle market businesses should be well placed to take advantage of the opportunities arising out of the Budget announcements.


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