The Morrison government will use Tuesday’s budget to unveil a multi-billion dollar national infrastructure spend that includes projects in key marginal seats, with $17.9bn in new money to be spent over the next decade.
The pre-election cash splash on road and rail also includes projects for regional Australia that had been secured in negotiations with the Nationals, including $140m for a regional road safety program and $678m for the Outback Way, announced by deputy prime minister Barnaby Joyce last month in the key NT marginal seat of Lingiari.
The largest new spending commitment is $3.1bn for the Melbourne Intermodal Terminal in Victoria, which will go towards two new freight terminals and road infrastructure designed to service inland rail. This is in addition to $2bn announced in last year’s budget for the project.
In New South Wales, the government has committed $2.4bn towards new projects and $804m in additional commitments for existing projects. This includes $8m towards planning the duplication of the New England Highway between Muswellbrook and Singleton. The Shoalhaven City Council in the key marginal seat of Gilmore will receive an extra $352m for the Milton Ulludulla bypass.
Passenger rail projects will also receive a significant boost, with $1.6bn being announced for the Brisbane to the Sunshine Coast rail extension, $1.2bn for the Brisbane to Gold Coast rail upgrade, and $1bn for the Sydney to Newcastle faster rail upgrade.
In Western Australia, where the government has up to five seats at risk of falling to Labor, the budget will include $145m for upgrades to the Tonkin highway and $140m for regional road spending.
Tasmania, where the government is hoping to sandbag two marginal seats in the north of the state, will receive $336m for a northern roads package, while the marginal seat of Boothby in South Australia will benefit from $200m for Marion Road along with already announced spending on South Road.
The controversial commuter car park program – which was found by the auditor general to have favoured Coalition seats – will receive an extra $47m across five projects in NSW and Victoria.
The prime minister, Scott Morrison, said the infrastructure package was aimed at “keeping Australians moving and supporting thousands of local jobs across the country.”
“By investing in these projects we are delivering the infrastructure that the Australian economy needs to grow, to get Australians home sooner and safer, and generate thousands of jobs and new opportunities for small businesses right across the country,” Morrison said.
The deputy prime minister Barnaby Joyce said the development of freight routes was needed to drive the growth of industries that generated “the wealth our nation needs to become as strong as possible as quickly as possible.”
“Getting more commodities to ports and sending them overseas will generate more export income, making our nation wealthier and stronger. Better roads and infrastructure will enable that.”
The budget is already benefiting from soaring commodity prices, with the treasurer, Josh Frydenberg indicating on Sunday that Tuesday’s budget would see a significant improvement in the budget bottom line.
Key elements of the budget have already been revealed, including tax relief for small and medium sized business, health spending, an extension of an apprenticeship wage subsidy scheme and more money for defence and veterans.
The centrepiece of the budget will be a cost of living relief package targeting low and middle income earners, which is expected to include a one-off cash payment and a cut to fuel excise that is currently set at 44 cents a litre. A $250 cash payment for pensioners is also on the cards.
Frydenberg has been cool on the idea of extending or increasing the low and middle income tax offset, however, with the treasurer emphasising that the payment was only ever intended to be temporary.
In its pre budget analysis, Deloitte Access Economics said that the potential injection of $8bn from the Lmito would trigger action by the Reserve Bank to quell the inflationary consequences, requiring an increase in the cash rate of 0.3 percentage points. Inflation is already on track to be as high as 5% this year, with wage growth lagging behind. However, Tuesday’s budget is expected to revise upwards its notoriously inaccurate wage growth projections on the back of record low unemployment.
On Sunday, Morrison said the government would continue to have an eye on inflation as it looked to help households out with cost of living relief, saying the Coalition would spend in a way that did not hike up inflation and interest rates.
“We will continue to tackle inflation through strong financial management that we have demonstrated,” Morrison said.
“This budget once again is about Australians – the pressures they face, the cost of living pressures that they’re having to deal with. To guarantee the essential services that they rely on, to ensure that we can keep them safe (and) that we can support the defence forces that secure our position in a very volatile Indo-Pacific region.”
Labor’s shadow treasurer, Jim Chalmers, argued that the government needed to be investing in productivity measures to ensure that the budget spend did not lead to inflationary pressures that would ultimately hurt households.
However, the opposition is unlikely to stand in the way of any cost of living relief for families, with Chalmers saying Labor was broadly supportive of a temporary cut to the fuel excise.
