The Rudd Government says its Building Australia Fund will weather the financial storm, as state governments project a decline in
The Rudd Government says its Building Australia Fund will weather the financial storm, as state governments project a decline in infrastructure spending.
Prime Minister Kevin Rudd moved this week to allay concerns the Government would need to evaluate its infrastructure commitment in light of the financial woes crippling the international market.
Rudd says the Government is well-placed to follow through on its infrastructure commitment, rejecting reports it will consider selling bonds to fund what it deems vital nation-building projects.
“We believe we have sufficient funds available through those investment vehicles for the future to meet the challenge of our future infrastructure needs,” Rudd says.
Furthermore, he has downplayed questions the Government will need to borrow, saying the funds are available.
Minister for Infrastructure and Transport Anthony Albanese has reiterated Rudd’s comments, saying the Government is monitoring the situation but expects there will not be an immediate impact on infrastructure investment in Australia.
“Infrastructure is a long term investment that is less susceptible to short term market fluctuations,” Albanese says.
“Furthermore, there is a range of financing arrangements available for funding infrastructure.”
The Rudd Government’s optimism, however, is not being shared by Victoria and NSW.
Premier John Brumby this week told the The Age the financial woes have created a credit squeeze which will make it harder for the Government to secure private financing.
He says the downturn in financial markets will affect infrastructure planning, which may include Sir Rod Eddington’s ambitious Investing in Transport study.
Brumby wants the Federal Government to play a greater role in funding transport infrastructure.
Newly-appointed NSW Premier Nathan Rees has also hinted at expansive cuts to the State’s infrastructure expenditure because of a lack of funds in government coffers.
The Government will soon release a mini-budget, which is expected to sacrifice a number of expensive projects to shore up funds.