State should invest economic recovery in SEQ infrastructure catch up: Mayors

22 / Apr / 2010 | News

Local Mayors have backed the call by the Council of Mayors (SEQ) for the potential $11 billion dollar boost in State revenue to be largely directed towards badly needed infrastructure spending.

Independent new research by Access Economics shows that Queensland’s Budget could be up to $11 billion better off than forecast, depending on the extent to which the Commonwealth Grants Commission redistributes revenue across the States.

The Council of Mayors (SEQ) today released its 2010-11 State Budget Submission including an economic and fiscal analysis by Access Economics, renewing its calls for the State to boost, not cut as planned, its infrastructure spending to help address growth and management issues.

Lockyer Valley Regional Council Mayor Steve Jones said South East Queensland (SEQ) was suffering serious congestion issues from years of underinvestment and State Government plans that cut infrastructure spending by half over the next three years were unnecessary.

“With the State set to receive up to an extra $11 billion more than forecast, the bulk of that should be invested into dealing with the consequences of growth by delivering badly needed infrastructure,” Cr Jones said.

“Successive State Governments have failed to fund infrastructure ahead of population growth, and as a result, the SEQ transport system is under significant pressure. It would be a mistake to do that again.”

“If 70 per cent of projected State Government revenue gains were re-allocated into capital spending, funding for the SEQ Infrastructure Plan and Program could be doubled, adding about $7.5 billion from 2010-11 to 2012-13.”

“This would allow $14.5 billion of nationally significant projects to be funded in SEQ over the next three years, including vital work to the Warrego Highway, with an intersection upgrade to the Blacksoil Interchange and the construction of the Toowoomba Bypass.”

Mayor of Somerset Regional Council Graeme Lehmann said the Warrego Highway upgrade was of the highest priority for the Somerset, Lockyer Valley and Toowoomba regions.

“An upgrade of the Warrego Highway is long overdue; its current state appalling,” said Cr Lehmann.

“The Warrego Highway is a nationally significant freight route. Half of the exports that pass through the Port of Brisbane originate from the Surat Basin and Darling Downs regions and these exports have an estimated value of $7.9 billion annually, about one percent of Australia’s gross domestic product.”

The report commissioned by the Council of Mayors (SEQ) shows that the infrastructure budget cuts implicit in the State Budget will take capital spending from its highest level in 30 years, currently over 8 percent of Gross State Product (GSP), to a record low point of just 3.3 percent of GSP by 2012-13.

The report forecasts Queensland’s economy is likely to move into a substantial upswing from 2012, resulting in forward revenue estimates from 2009 to 2013 to be up to $11 billion higher than forecast.

Access Economics Director Chris Richardson said, “Infrastructure spending always needs to stay ahead of population growth. With the Budget set to improve, that points to both motive and opportunity.”

Cr Lehmann said last year’s State Budget forward estimates, reducing infrastructure spending from $19 billion this year to $10 billion to 2013 as part of a debt reduction strategy, would result in worse congestions problems for SEQ.

“This short-sighted strategy would hamper the business productivity and liveability of SEQ,” said Cr Lehmann.