Water, transport and defence get budget support

Australia's lagging infrastructure will receive a boost notably in roads and water expenditures following this year's Federal budget on May 14, closely followed by expansionary State budgets along the east coast.

With buoyant Federal revenues, Federal Treasurer Peter Costello has sanctioned some loosening in the pursestrings on infrastructure, though groups such as the Institution of Engineers and the Australian Council for Infrastructure Development would like to see a more co-ordinated approach to longerterm planning of public works.

Private sector groups analysing the practical impact and timing of projects will be helped by an electoral quirk. In recent times, the Federal Government in particular has realised the electoral advantages of providing detailed information on the impact of planned expenditures, set out State by State and not infrequently by a string of separate regions within States.

Thus on May 14, 2002 the Minister for Defence, South Australia"s Senator Robert Hill, issued a string of press releases with drop in headlines, along the lines of "[insert State or Territory] to benefit from Defence spending."

The second page of the two page release for the Northern Territory gives both the project totals for 22 separate defence initiatives, and most usefully, the amounts actually to be spent in 2002-2003. Thus of a total project value of $552 million, the actual outlays during 2002-2003 will be $78 million.

The use of multi-year project totals in the main media announcements underlines the modernday emphasis on seeking to maximise the electoral effect, by quoting the total amount of the allocation to ventures typically funded in segments over several successive years. This sort of approach is to be expected from any competent public sector spin doctor these days.

But for those who are actually planning their schedule of projects to bid for and possible opportunities down the track, the important thing is the rate at which the funds will be released, and the actual amounts of contract work to be allocated over specific periods.

So industry bodies and individual concerns interested in the whole panoply of government capital works, and indeed any contracts which will extend over more than one year, should regularly emphasise to politicians the importance of having forward projections broken down into likely annual components.

So in NSW, the actual spending for defence projects in 2002-2003 will be $68 million, though the total value of the projects is $440 million. Queensland will see $143 million for the year on projects valued at $660 million altogether, and Victoria gets one year's spend of $57 million on a total project value of $137 million.

Border protection has scored an extra $200 million over four years, most of it to Customs for more Coastwatch flights, communications, X-ray equipment, crews and evaluation of new technology options. There is even $1.5 million to the Australian Federal Police for five boats to go to the Indonesian National Police for maritime surveillance.

Two civilian areas with a lot of provisions are roads, rail and water. In NSW, spending on country roads will increase $108 million, including funds for the completion of the Yelgun-Chinderah freeway in northern NSW, while $1,419 million goes to investment in rail infrastructure, including new Millenium trains.

The largest single item of expenditure in this year's Federal roads budget is $68.4 million for Melbourne's Scoresby Freeway, a highly-publicised project which has featured in election considerations for some time.

Another Melbourne freeway project, the 17 km four-lane Pakenham bypass, was heavily promoted for the November, 2001 Federal elections. It has been pencilled in for $100 million of Federal funds, half the estimated cost but not until 2003-2004.

This advance flagging of something which is really part of next year's budget, not this one, raises the eyebrows of budget accounting purists. Paradoxically, however, while its motivation is electoral advantage, it is genuinely useful for private sector groups doing advance planning for future years.

Some allocations at both Federal and State level foreshadow what will probably be increasing allocations to put open air irrigation channels and canals into pipelines over the next few years. At present up to 30 per cent of all irrigation water is simply squandered through evaporation. "We do lose an enormous amount of water through these channels," said Dr John Williams, CSIRO land and water division chief.

Governments are currently faced with demands for increasing, specific allocations of water for ecological purposes (river flows and wetlands for waterbirds), in systems already over-committed for farming uses. The most obvious way of finding this water is by conserving it through an extensive program of pipeline construction.

A harbinger of things to come is the Bracks Government's allocation of $77 million in this year's Victorian budget for a pipeline from Wimmera to Mallee in the Victorian irrigation area, supplemented by a modest $4 million from the federal Government.