Major projects funding to be slashed by billions

Spending on road and rail projects is expected to be adjusted by $7.4 billion over four years under a re-profiling by the Albanese government.

The mid-year budget update, released on Wednesday by Treasurer Jim Chalmers, reveals reforms to the Infrastructure Investment Program will decrease payments for major projects by billions of dollars up to 2026/27.

The savings followed an independent review of the Infrastructure Investment Program.

However, the government remains committed to a 10-year pipeline of land transport infrastructure projects worth $120 billion.

Working with the states and territories to make the infrastructure program more sustainable, a $6.8 billion boost will support the delivery of current projects and re-prioritise funding.

ā€œThis will help deliver the infrastructure Australia needs, create jobs and relieve capacity constraints that can drive inflation,ā€ the budget update reads.

The independent review found multi-billion dollar cost blowouts had made it unsustainable.

Finance Minister Katy Gallagher said infrastructure requests and project planning discussions would continue between the Commonwealth and the states and territories.

ā€œThis certainly reflects that big response that we had to the review that was done,ā€ she told reporters in Canberra.

The government will also set aside $4.2 billion for road safety infrastructure, including a gradual increase in funding for the Roads to Recovery Program to $1 billion a year.

The Commonwealth will contribute to major infrastructure projects in a 50-50 split with states and territories.

Major projects were previously entirely funded by the federal government or the cost was shared 80-20.


Tess Ikonomou
(Australian Associated Press)


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