Premiers are bristling after the federal government announced its state counterparts would have to foot at least half the bill for new infrastructure projects.

In a major funding overhaul, the Commonwealth will contribute to major infrastructure projects on a 50-50 basis with states and territories, where previously they were entirely funded by the federal government or split 80-20.

The government will also shift its focus to delivering “nationally significant infrastructure”, meaning projects must either support or align with broader national priorities, be related to the National Land Transport Network or key freight routes or require a Commonwealth contribution of at least $250 million.

But state leaders, including Queensland Premier Annastacia Palaszczuk, said the funding shift was unfair.

“I’m not happy,” Ms Palaszczuk said on Tuesday.

“For a decade Queensland was ripped off by the former coalition government, which meant our government has done the heavy lifting.”

The Queensland government has invested more than $21 billion in infrastructure over the next four years, more than double the Commonwealth’s $10.8 billion contribution.

The new changes would cut the state’s infrastructure projects, increasing inflation and lowering productivity, she said.

“Right now, Queensland needs more infrastructure, not less,” she said.

NSW Premier Chris Minns echoed a similar sentiment.

“I’m not going to gild the lily here, that’s a major concern for the NSW government,” he told ABC radio.

In an environment where his state will soon be “worse off” on GST payments due to Canberra’s deal with Western Australia, and paltry GP funding which had patients flocking to state hospitals, the funding change would add to concerns.

“NSW taxpayers pay a lot of money in income taxes to the Commonwealth government, and we deserve our fair share,” he said.

“If there’s going to be agreements with Western Australia and other states, then that should apply to Australia’s largest state as well.”

Victorian Premier Jacinta Allan said the state would keep pushing the federal government to chip in on the cost to build the $34.5 billion Suburban Rail Loop, it has only committed $2.2 billion to the mega project so far.

“Whether it’s city or country projects, it’s all about ensuring that we get a fairer share,” she told reporters in Melbourne.

Federal Infrastructure Minister Catherine King made the announcement just over a week after an independent review found the federal infrastructure budget had blown out by $33 billion.

“Australia’s infrastructure investment pipeline has become a house built on sand,” she said on Tuesday.

“If we continue as we currently are, we cannot commit to any new projects for the next 10 years.

“We’re not cutting funding, we’re cutting the lies and we’re cutting the waste.”

The new ratio means federal and state or territory governments will carry an equal share of the benefits and risks involved.

“This is not about saving money – it is about shared accountability and maximising our investments,” Ms King said.

“What we are doing is ending the perverse incentives that saw the federal coalition throw money at projects that states did not want to build – and then they simply never happened.”

Under the previous government, the number of infrastructure projects ballooned from 150 to 800.

 

Kat Wong
(Australian Associated Press)