The 2017-18 Federal Budget will have a significant impact on the Nation’s technical professionals. The budget includes major infrastructure spending in some areas, with some $70 billion in transport infrastructure allocated over the forward estimates.
Infrastructure is critical to building a more liveable, more competitive, and more productive nation. Professionals Australia welcomes the ongoing support for infrastructure programs, and challenges the Government to ensure that Australians receive the best value for their investment.
While, major infrastructure projects will provide a raft of opportunities for engineers, much of the funding announced in the budget is to provide longer-term infrastructure funding and finance over the next decade, beyond the forward estimates (the next four years).
Professionals Australia welcomes any initiatives to encourage a longer-term view of infrastructure management. However, we remain cautious that much of this funding is beyond the forward estimates and well beyond the election cycle, and may never materialise without a firm commitment.
Australia’s technical professionals require a strong commitment to real projects, with real timelines, if businesses are to be encouraged to invest in their workforce.
Professionals Australia would like to have seen some greater utilisation of debt to fund productivity enhancing infrastructure programs. We would also have liked a fairer distribution of the infrastructure funding among the states, with Western Australia and New South Wales faring well, while South Australia and Victoria received less support
The Budget will provide a shake up for the Australian workforce, with new measures aimed at curbing abuses of the current skilled migration system. New initiatives will introduce fees for employers seeking foreign workers, with these funds going to support training and skills programs.
- Temporary Work (Skilled) (subclass 457) visa programme to be replaced with a new Temporary Skills Shortage visa, at a cost of $1060 for two years and $2400 for four years;
- The new visa streams will require two years of work experience, a mandatory criminal history check and be subject to labour-market testing; and
- Revenue from visas will be used to fund a new Skilling Australians Fund, at an estimated cost of $1.5 billion over the first four years. This fund will be used to support up to 300,000 apprentices, trainees, pre-apprentices, and higher level skilled Australians.
Alongside road and rail, the Budget announced new investment in airports, hospitals and schools over the coming years, providing opportunities for engineers, architects, scientists and ICT professionals. Major announcements include:
- $5.3 billion to fund the first stage of development of Western Sydney Airport;
- $70 billion in transport infrastructure allocated over the forward estimates;
- The establishment of a 10-year allocation for funding road and rail investments. This will deliver $75 billion in infrastructure funding and financing from 2017-18 to 2026-27;
- $10 billion investment package in rail projects as part of the National Rail Programme; and
- Offer to buy the NSW and Victorian stakes in Snowy Hydro at $5.25 billion, with this money to be reinvested by the States in productivity enhancing infrastructure.
According to Infrastructure Partnerships Australia, the Federal budget reduces real infrastructure spending by $7.4 billion when compared to the 10-year average.
The Federal Government has outlined several major road projects to be funded over the coming years, providing additional support for the State’s as they seek to ease congestion on the nation’s roads. Major road projects in the budget include:
- $100 million for better road access to the WA’s Fiona Stanley Hospital precinct;
- $237 million for WA Kwinana Freeway;
- $844 million in QLD for new Bruce Highway priority projects, including for a Pine River to Caloundra upgrade;
- $4.4 billion for the Roads to Recovery program;
- $70 billion in transport infrastructure allocated over the forward estimates; and
- The establishment of a 10-year allocation for funding road and rail investments. This will deliver $75 billion in infrastructure funding and financing from 2017-18 to 2026-27.
Rail is one of the big winners from the 2017-18 budget, with the Federal Government announcing major investments in rail over the coming years. This investment will support metropolitan passenger services, regional connections, and provide a major boost for rail freight service. Major rail projects in the budget include:
- $10 billion investment package in rail projects as part of the National Rail Programme;
- $8.4 billion in funds to deliver the Inland Rail project to provide a high-capacity freight link between Melbourne and Brisbane through the Australia Rail Track Corporation;
- $30 million for Melbourne Airport Rail Link business case;
- Over $1 billion in funds to upgrade Victorian rail infrastructure, with $500 million for Victorian regional passenger rail, including $100 million for Geelong Rail Line Upgrade; and
- $792 million for the Metronet project in Western Australia.
The Federal Budget announced new support for water infrastructure, in an effort to provide a secure water supply to more Australians:
- $30.4 million over four years from 2017-18 to undertake scientific assessments on three prospective onshore unconventional gas sites to identify the potential impacts on water resources and other environmental assets;
- $28.5 million over four years from 2017-18 to establish the Regional Investment Corporation (RIC) which will administer the National Water Infrastructure Loan Facility; and
- Ongoing support for the $2 billion National Water Infrastructure Loan Facility to provide state and territory governments with concessional loans to co-fund the construction of water infrastructure.
The Federal Government has reiterated its support for a more reliable and affordable power supply. However, disappointingly there is no funding provided to support the transition of workers affected by major closures, and there are few initiatives to support renewable energy generation. Major announcements include:
- Offer to buy the NSW and Victorian stakes in Snowy Hydro at $5.25 billion, on top of a planned $2 billion upgrade;
- $13.4 million over five years from 2017-18 for the Commonwealth Scientific and Industrial Research Organisation to complete the Energy Use Data Model and make it available for use by regulators and industry;
- $86.3 million over four years from 2017-18 to increase gas production and support affordable electricity prices for households and industry; and
- Up to $110.0 million for an equity investment, if required, to accelerate and secure delivery of a solar thermal project in Port Augusta, South Australia.
The budget failed to provide any significant new initiatives to aid the nation’s ailing manufacturing sector. Ongoing major investment in defence industries including boat building and submarines provides the brightest spark for the sector. Initiatives include:
- $101.5 million over five years from 2016-17 to establish an Advanced Manufacturing Fund to promote research and capital development for high technology manufacturing businesses.
The Federal Government has continued its major funding commitment to Defence, with spending on track to reach the target of 2% of GDP by 2020-21. Major announcements include:
- $34.6 billion in Defence funding during 2017-18;
- A total of $150.6 billion in Defence funding over the forward estimates;
- Ongoing support for the $200 billion Integrated Investment Programme, which will fund the naval shipbuilding programme including submarines, and the F-35 Joint Strike Fighter programme; and
- Disappointingly, the Budget confirmed that the Government will continue their current approach to workplace bargaining within Defence – that is limited wages growth – over the foreseeable future.
The budget provides some support for science, however there are few new initiatives that are likely to aid the sector. Commitments to medical research remain on track, and the Government has also announced the continuation of incentives for bulk billing of pathology services. Major initiatives include:
- $935 million for to continue diagnostic imaging and pathology services bulk billing incentives;
- $101.5 million to establish the Advanced Manufacturing Fund to promote research and capital development for high technology manufacturing businesses. Funds to be matched by states;
- $26.1 million ($120 million over 11 years to 2027-28) investment in Australia’s astronomy capability through a strategic partnership with the European Southern Observatory;
- $7m increase in Business Research and Innovation Initiative;
- AMSI internships program as foreshadowed in MYEFO;
- MRFF starting disbursements as expected with $65.9 million over four years for preventative health, advanced health translation, clinical trials and breakthrough research investments;
- Up to $68.0 million in 2017-18 toward the purchase of accelerator equipment and two treatment rooms in support of the establishment of a proton beam facility at the South Australian Health and Medical Research Institute precinct;
- $115 million for mental health research and services including $80 million for psychosocial services, $9.1 million in funding for rural telehealth psychological services, $15.0 million for priority mental health research and $11.1 million to address suicide hotspots;
- $49.8 million to operate and enable access to the Macquarie Island Antarctic research facility; and
- $1.4 million spending on clinical trials for childhood cancer.
For those of you who would like more in-depth information on the budget overview, we will be holding a webinar on Tuesday the 16th of May at 2pm AEST for all members.