Turnbull Government’s Infrastructure Investment Driving Significant Spending Increases

Labor’s Anthony Albanese regularly claims that infrastructure spending is dropping.  In a recent speech, for example, he said ABS figures showed that public sector infrastructure investment in the September quarter of 2015 was 20 per cent lower than the September quarter of 2013 when Labor was in power.[1]

His claim is at odds with the fact that in 2016-17 Commonwealth Government spending on transport infrastructure will be $10 billion – the highest in Australia’s history.

To make his claim Albanese selects his data very carefully – comparing two points in time to try to demonstrate a general trend.

Comparing other points in time shows the opposite trend.  For example the ABS figures also show that total total engineering construction in June 2015, when the Coalition was in power, was 10.9% higher than June 2011, during the Labor years.[2]

In short, it is not particularly meaningful to compare two point in time snapshots.

What is much more meaningful is what the underlying trend shows about expected future activity – and here the data show something quite different to what Albanese is claiming.

Consider for example the findings of the survey regularly conducted by the Australian Industry Group and the Australian Constructors Association Construction, reported late last year.[3]  This found that in 2016/17 a boost in infrastructure spending was expected. The survey’s authors commented:

"In particular, the value of road and rail projects is forecast to grow strongly in 2016/17 pointing to an emerging growth cycle in major urban transport infrastructure."

Another respected survey is the ‘Australian Infrastructure Metric’ prepared by Infrastructure Partnerships Australia (IPA) and BIS Shrapnel.  The results for the December quarter of 2015 have just been released.[4] They reveal strong growth is forecast for infrastructure spending, with transport spending expected to rise by $3.2 billion next year.

Growth is anticipated across road, bridge and rail projects, with a concentration in NSW and Victoria.  According to IPA CEO Brendan Lyon:

"This is the biggest lift we’ve seen in infrastructure investment since the end of the mining boom."

The trend is clear: spending on transport infrastructure is expected to rise strongly.

Mr Albanese can continue to engage in selective comparisons of ABS figures.  The Turnbull Government is getting on with the job of investing in vitally needed road, rail and other transport infrastructure around the country – with a record $50 billion of investment committed by 2019-20.  That’s the reality which is showing up in the industry figures.

[1] Speech to Australian Logistics Council, March 3 2016, http://anthonyalbanese.com.au/address-to-the-australian-logistics-council-infrastructure-australia-at-the-cross-roads

[2] ABS 8762.0, Sep 2015 and Sep 2011, comparison of Total Engineering Construction Trend Estimates.

[3] ‘Turnaround in Construction Outlook’, AI Group/Australian Constructors Association, Media Release, 30 October 2015

[4] ‘Australian Infrastructure Metric Shows Transport-Led Construction Recovery Ahead: Latest Figures’, Infrastructure Partnerships Australia Media Release, 21 March 2016