Budget delivers big on inland rail

Federal Budget 2017: delivers big on inland rail

Farm Online News
Treasurer Scott Morrison.

Treasurer Scott Morrison.


This year’s federal budget has delivered strategic regional infrastructure projects and broader initiatives to help stimulate national economic growth.


DELIVERING strategic regional infrastructure projects and broader initiatives to help stimulate national economic growth, rather than large funding allocations for new agricultural-specific programs, is a core outcome of this year’s federal budget.

Highlighted by $8.4 billion to help the government fund construction of the iconic inland rail line from Melbourne to Brisbane, the budget forecast handed down today by Treasurer Scott Morrison in Canberra today carried some big numbers for buckets of funding to enhance regional infrastructure.

Mr Morrison’s budget speech made no specific reference to any spending items new or old, for agricultural programs and initiatives.

But the Treasurer highlighted infrastructure projects for regional Australia as the government surpassed the National Farmers’ Federation’s pre-budget demands to get “fair dinkum” about building the inland rail, after years of big promises and talk, by the government committing a minimum $1b.

“In one of the biggest investments ever seen in regional Australia, the government will fund the Melbourne to Brisbane inland rail project with $8.4b in equity to be provided to the Australian Rail Track Corporation (ARTC),” Mr Morrison said.

“Construction on this 1700 kilometre project will begin in 2017-18 and will support 16,000 jobs at the peak of construction.

“It will benefit not just Melbourne and Brisbane, but all the regions along its route.”

Speaking to media, Mr Morrison said the strong performance of commodity exports and expanded agricultural trade had aided the government’s budget revenue position - but that had been countered by rising costs in other areas.

He said the government would also be making an “injection” into the ARTC to help the government fund the inland rail’s construction, with private sector investment anticipated.

“This ensures based on the advice that we have received that we’ll be able to pursue that project,” he said of the budget’s inland rail allocation.

“Now the extent to which the private sector can be involved in that, then that’s welcome and there’ll be opportunities to do that.

“But what we’ve done is ensure that there is a sufficient provision there for that company to make a contribution to ensure that very significant piece of nation building infrastructure (is built) which doesn’t just support Melbourne and Brisbane but it can support every regional location along the route.”

Mr Morrison described this year’s budget as a “responsible” one, in setting out a “credible and affordable plan, based on the principles of fairness, security and opportunity”.

“This is not a budget for ideologues – but a budget for people who want the government to do its job,” he said.

In revealing other separate initiatives in this year’s budget, Mr Morrison said it was important to invest in infrastructure, “but we have to make the right choices on projects, as part of a broader economic growth strategy”.

“Our new infrastructure and projects financing agency will help us make those right choices, recruiting people with commercial experience to ensure we use taxpayers’ money wisely,” he said.

“We must also choose to invest specifically for growth in our regions.

“The Productivity Commission recently highlighted that some regional areas have been disconnected from our national growth.

“So we will establish a $472 million regional growth fund to back in the plans that regional communities are making to take control of their own economic future.

“This includes $200m in funding to support a further round of the successful Building Better Regions program.”

Mr Morrison said the Turnbull government would also establish a $10b national rail program to deliver rail projects that provided better connections for the nation’s cities and regions and created new opportunities to grow our economy.

“Projects such as Adelink, Brisbane Metro, Tullamarine Rail link, Cross River Rail in Brisbane, and the Western Sydney Airport Rail link, all have the potential to be supported through this program, subject to a proven business case,” he said.

A joint budget statement from Nationals leader and Agriculture Minister Barnaby Joyce and party deputy-leader and Regional Development Minister Fiona Nash said the $8.4b inland rail budget allocation would help drive the project’s construction.

“The Melbourne to Brisbane inland rail project will see this nationally significant freight transport project connect our regions to domestic and global markets by 2024,” the joint-statement said.

“Connected regional communities will be able to move goods to ports more efficiently and take advantage of the tremendous opportunities offered in Asia and beyond.”

Mr Joyce has said the inland rail is an important and “big project” that the Nationals had been fighting for, for many years.

“I want to make absolutely certain that we see it through and we see it completed and that we put a substantial investment in this project,” he said.

“People will see with the investment that we’re not joking and we’re doing this.

“It will be something that builds a corridor of commerce as I’ve always said between Melbourne and Brisbane, which gives opportunity to western towns like Dubbo, Narrabri, Moree and Goondiwindi and Albury.

“It gives capacity to start competing on a more reasonable basis with the bulk movement of product from the US, Canada, Europe and Ukraine that have been getting ahead of us.

“I’ve made it one of my key objectives and I think I brought it up in my maiden speech that I want to make absolutely certain that this thing actually happens.

“This has been one of the key issues for the Nationals and it has to move from being a discussion piece to delivery and that’s what’s going to happen.”

Victorian Nationals MP and Transport and Infrastructure Minister Darren Chester said the government’s $8.4b equity investment over seven years from 2017-18 to the ARTC would deliver a high capacity rail freight link, between Melbourne and Brisbane.

Mr Chester said ARTC would be using a combination of government equity and public private partnership, for the Toowoomba to Kagaru tunnel section; the most complex element of the inland rail’s construction.

He has previously said Prime Minister Malcolm Turnbull expects construction to start this year which is due for existing parts of the ARTC network in NSW, with $894m previously allocated for some of the preliminary works.

The government owned ARTC manages about 4500kms of standard gauge interstate rail track.

It has already been allocated funding by the Coalition government to help determine where specific sections of the rail line will be built.

The rail line will run from Brisbane to Melbourne via Toowoomba, Parkes and Albury, and will require 500kms of new track and about 1200kms in upgraded existing rail corridors.

The $8.4b budget allocation will allow funding and financing options through the ARTC, to acquire any land needed and spending on upgrading the existing track line.

It’s estimated to cut 10 hours off the existing route from Melbourne to Brisbane and provide the capacity to double-stack trains to double current freight capacity.

Private sector investment is expected to be in strategic intermodal hubs along the route, where freight demand like farm produce can be increased to enhance the line’s commercial viability, and in new rolling stock.

Building new rail through the Darling Downs farming region in southern Queensland is seen as one of the project’s biggest costs and logistical challenges.

The mix of agricultural produce and mining product and volumes to be transported will also be a critical aspects underpinning the inland rail’s potential business case and ongoing viability.

The east to west rail line will connect with the inland rail at Parkes in western NSW representing a major opportunity to build an intermodal hub to carry farm produce to port and markets more efficiently, on bigger faster trains.

In a largely low key budget statement for the agriculture portfolio, Mr Joyce said this year’s budget delivered on the government’s election commitment to establish a $4b Regional Investment Corporation (RIC) - a national body to streamline and speed up the approval of farm concessional loans like drought and dairy support, and administer the National Water Infrastructure Loan Facility.

“Affordable and reliable water supplies are key to growth in regional Australia,” the statement said.

“This government is already making the most significant investment in water infrastructure in Australian history to drive regional investment, agricultural production and jobs.

“The $500m National Water Infrastructure Development Fund and the $2b National Water Infrastructure Loan Facility are in place to incentivise state and territory governments to fast track priority projects that will support the growth of our agricultural industries and regional communities.”

The budget papers said the government would provide $28.5m over four years from 2017-18 to establish the RIC which was announced by Mr Joyce as a core agricultural election commitment in last year’s campaign.

It will be established some-time in 2018 as a Corporate Commonwealth Entity – within the agriculture portfolio but separate to it - through legislation to be introduced this year.

It will comprise a CEO and independent board consisting of three part-time members with appointments to be made based on recommendations made to Mr Joyce and Mr Morrison.

The agriculture budget also revealed the federal government would provide $8.3m over four years from 2017-18 to support the Australian Livestock Exporters' Council to implement the Livestock Exports Global Assurance Program (LGAP).

The budget papers said LGAP measured delivered on a government election commitment and was an assessment and certification assurance system designed to assist livestock exporters to meet their regulatory requirements under the Exporter Supply Chain Assurance System (ESCAS).

“The ESCAS framework requires that animals are treated in accordance with international guidelines in any market and at all stages within the supply chain,” the papers said.

Mr Joyce said this year’s budget also delivered $1b over five years for a new National Landcare Program, giving certainty of funding to thousands of volunteers, many of whom are farmers, who work to ensure future generations will inherit healthy and productive land and water resources.

He also claimed this year’s budget built on investments the $4b Agricultural Competiveness White Paper handed down in mid-2015.

The NFF’s 2017-18 budget wish list called for the continuation of farm asset instant write offs of under $20,000 that was introduced in 2015 and due to expire on July 1 – which was extended by one year out to 2018.

“Small businesses will be able to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for use by 30 June 2018,” the budget papers said.

Senator Nash and Mr Joyce said the Coalition government would also continue to fund the Mobile Black Spot Program with $685m committed from 2013-14 to 2020-21 to deliver improvements such as safety barriers and street lighting to sections of dangerous road that have a crash history.

“The Coalition’s Mobile Black Spot Program continues to roll out with over 140 new base stations already live and almost 250 due to be live by June 30, 2017.

“The budget allocates $155.9m towards the program over the forward estimates, for a total program spend of $220m from 2015-16 to 2019-20.”

The allocation for the regional growth fund will see $200m in additional funding to increase the government’s commitment to the Building Better Regions Fund to almost $500m and a $272m fund established to drive major transformational projects of more than $10m.


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