ROAD upgrades have become a casualty of Queensland’s floods with the government delaying $1 billion worth of infrastructure spending to help cover its damages bill.
Rebuilding infrastructure will take the lion’s share of the $5.6 billion damage bill, prompting the government to put off projects it had previously pledged to fund.
Yesterday the Prime Minister, Julia Gillard, said she had found $325 million by delaying six road projects in Queensland, and would redirect another $675 million after talking to other states in the coming days.
Rural areas will also feel the pinch: $350 million will be reallocated from the $800 million priority regional infrastructure program. The scheme, announced when Ms Gillard secured the support of key rural independents, funds local projects identified by communities.
Another $100 million will be redirected from the Building Better Regional Cities program, a scheme to help local councils provide infrastructure for housing developments.
Describing the decision to delay such spending as ”difficult”, Ms Gillard said: ”It’s never a happy thing to go to someone who’s expecting their road to be upgraded and say, ‘Well, actually I’m going to put that back in time, sorry about that.’ But that’s what I’m doing, and I’m doing it deliberately because of the capacity constraints and value-for-money questions.”
Apart from six projects in Queensland and one in South Australia, the government has not revealed which will be delayed or abandoned.
However, the range of project deferrals sparked a mixed response from business groups.
The chief executive of Infrastructure Partnerships Australia, Brendan Lyon, said the shift in priorities was understandable, but urged the government not to lose sight of long-term projects.
”While we accept and endorse the need to get Queensland back on its feet quickly, business is looking to the federal budget to provide leadership about how the Commonwealth will get the next round of nationally significant infrastructure projects … out of the ground,” Mr Lyon said.
The Urban Taskforce, representing property developers, criticised the decision to redirect half the funding of the $200 million Building Better Regional Cities program. The scheme pays for sewerage, road connections and infrastructure for new housing.
Its chief executive, Aaron Gadiel, said: ”This scheme was supposed to see up to 15,000 more affordable homes in regional cities over three years, but we can expect that this number will now be halved.”
The president of the Business Council of Australia, Graham Bradley, asked the government to go further in its changes and cuts by targeting projects that had not been subjected to a cost-benefit analysis.
High on this list would be the $36 billion national broadband network, which the opposition has also targeted in its call for deeper spending cuts.
The government will be under pressure to ensure the $5.6 billion in public spending does not lead to rorting, as seen under its home insulation program.
The chief executive of the Australian Industry Group, Heather Ridout, called for more scrutiny and regular reports on flood reconstruction spending.
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