Federal Budget highlights: wise investments and a firm focus on the future
What opportunities does the Federal Budget 2023-24 foreshadow for Australia’s infrastructure sector? RPS Executive Director – Advisory, Arthur Stamatoudis shares his top takeaways.
11 May 2023 | 2 min read
This time last year, I wrote about the infrastructure opportunities I read between the line of Australia’s Federal Budget.
I said that the greater focus on housing would make investment in supporting infrastructure more necessary than ever. And that the impending shift towards health, education and renewables would create opportunities for industry (and communities) - even if projects might be delivered on a different scale and more decentralised basis than we were used to.
Fast-forward twelve months and the 2023-24 Budget story is both different, and the same...
Challenging economic conditions, positives still to be found
Comparing the titles of the last three Budget Overview documents hints at the wild economic ride we have been on in recent times:
- 2021-22: ‘Securing Australia’s recovery’
- 2022-23: ‘Australia’s plan for a stronger future’
- 2023-24: ‘Stronger foundations for a better future’
First, it was staving off pandemic-induced recession, then getting people back to work, and now…tackling cost of living pressures without adding fuel to the inflation fire.
While our fiscal challenges are evolving quickly, the two themes that stick out most for me in the latest Budget response? The drive to invest wisely in projects and programs, and the call to-action to maintain a focus on longer-term goals.
Here are just two examples of how I see this coming to life in the Budget, and how these principles could shape our industry as investment measures are rolled out.
Wise investment in projects and programs
Strategic industries in focus
While the discussion about prioritisation and funding will inevitably continue, our industry faces challenges that are broader than any individual project. This includes inefficiencies and weaknesses in our local supply chain, market capacity and productivity.
The Budget commitment of $15 billion to the National Reconstruction Fund and $392.4 million to an Industry Growth Program are positive moves.
According to the Government, “the National Reconstruction Fund will partner with the private sector to invest in priority areas that leverage Australia’s natural and competitive strengths in renewables and low emissions technologies, medical science, transport, value-add in agriculture, forestry, fisheries, resources, [along with] defence capability and enabling capabilities.”
With defence, transport and renewables overlapping significantly with our existing infrastructure pipeline, investment in the National Reconstruction Fund could help address some of the more systemic issues we face in terms of project delivery.
At the same time, investment in the Industry Growth Program “will support Australian small to medium-sized enterprises and startups to commercialise their ideas and grow their operations… [with support] targeted towards businesses operating in the priority areas of the National Reconstruction Fund.”
We talk a lot in the infrastructure sector about the need to foster innovation and create opportunities for smaller businesses to get involved in project delivery. So to me, these investments are important ones.
Focusing on the future
Making Australia a renewable energy superpower
With all the doom and gloom surrounding high interest rates and inflation, it’s encouraging to see a continued focus in the Budget on our longer-term journey towards net zero.
An additional $4 billion has been committed to the Renewable Energy Superpower Plan, along with $2 billion for building our hydrogen production capabilities, and a commitment to establish a National Net Zero Authority, among other things.
Twelve billion in Rewiring the Nation funding has also been allocated for transmission projects, including “$1 billion in Tasmania’s Battery of the Nation projects, $1.5 billion towards Renewable Energy Zones and offshore wind in Victoria, and $4.7 billion to unlock critical transmission in New South Wales”.
These are big funding commitments, and wise ones at that. The development of new wind and solar farms has been a hot topic for years. But to make clean energy truly work it’s vital that Australia invests in infrastructure beyond generation.
It’s great to see investment energy flowing through to the grid (pardon the pun!) and into strategic bodies that will guide clean energy investment into the future.
While there’s always a lot to unpack from the Budget, and economic conditions continue to be challenging, there are always positives to be found. And while infrastructure projects and priorities might change from one Budget to the next, one thing doesn’t. There’s always more value to create, and more work to do.