The Albanese government has assured the ACT that there will be special consideration for smaller jurisdictions in its new infrastructure overhaul amid at least $33 billion in cost overruns and ahead of expectations that the axe is about to swing on a range of federal projects.
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Infrastructure and Transport Minister Catherine King has ordered a funding refocus as a way to boost accountability, avoid budget blowouts and stop the political practice of pork-barrelling. She has outlined how the current 80:20 funding split will go and the states and territories will in the future pay for at least half of the big, long-term road and rail projects of "national significance".
The overhaul will also only include a federal tick-off if the commonwealth contribution is at least $250 million, but there are considerations if the projects relate to the National Land Transport Network, freight routes, housing, or the extraction of critical minerals.
Independent ACT senator David Pocock has raised concerns about the ACT's underinvestment and lower revenue raising capacity. Labor senator Murray Watt, representing Ms King in the Senate, sought to allay those fears.
"As you've noted, Ms King has made that statement that there may be some provision for smaller jurisdictions which have funding constraints," he told Parliament.
"Obviously, those kinds of details will need to be worked through with those particular jurisdictions. And I'd be happy to talk with you further about that Senator Pocock as those details ironed out."
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In the minister's earlier statement, she said the commonwealth was "returning to a preference of 50:50 funding with the states and territories for future investments, so both levels of government carry an equal share of both the benefits and the risks.
"The government may consider funding a greater share of projects in jurisdictions with less capacity to raise revenue on a case-by-case basis."
Senator Watt also said Ms King and her officials and "quite possibly other members of our government" have spoken to all states and territories about the overhaul.
"You're probably aware in this year's budget ... the Australian government committed $476.4 million towards major infrastructure projects in the ACT over the 10 years from the [years] 23-24. That funding remains in place," he said.
It comes as a review of federal infrastructure spending commitments, led by former Infrastructure secretary Mike Mrdak, finds $33 billion in cost overruns. The government is poised, likely this week, to cut a range of federal infrastructure projects in an effort to ease inflation, with talks underway with states and territories to determine spending priorities.
Ms King said there was a "high chance" of finding yet more overruns.
"This is a stunning amount of money," she said.
"They found that it would simply not be possible to deliver the current 10-year pipeline of projects within the $120 billion Commonwealth allocation."
Ms King has again slammed the Coalition for focusing, while in office, on electoral rather than national benefit. She said this practice expanded the Infrastructure Investment Program from roughly 150 projects in 2012-13 to nearly 800 in 2022.
"You have to question what the role of Commonwealth investment is - is it nation building or is it a re-election strategy?" she posed.
"Australia's infrastructure investment pipeline has become a house built on sand. And our government has been left with the difficult task of shoring it up."
But the opposition said it was concerned that regional communities and local councils would lose out with a shift from the 80:20 funding split for infrastructure projects.
The opposition spokesperson for local government and regional development Darren Chester said many regional projects would be unviable.
"This is the beginning of a major cost shift onto local councils and ratepayers, and a plan to abandon infrastructure projects in regional areas," Mr Chester said in a statement.
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