Western Australia
Fri 8 September 2017

Public infrastructure spend welcomed but tax slug will hurt

CCF WA has welcomed the State Government’s commitment to accelerating spending on economic infrastructure projects, while noting the increase in payroll tax will put a brake on the construction sector by discouraging private investment.

CCF WA Chief Executive Officer Jeff Miller said the Government’s $6 billion asset investment program in 2017/18 included a $4.3 billion spend by major infrastructure agencies on roads, rail, water, electricity and land development projects.

“This investment is good news for Western Australia’s civil construction sector, which has been hit hard by the economic downturn in WA,” Mr Miller said.

“The Government’s plans to increase road and rail spending were well known, and it’s reassuring to see spending in other key infrastructure sectors remaining strong too. The multiplier effect of investment in productivity-enhancing infrastructure flows through the economy, stimulating all sectors.”

Mr Miller said a key challenge for the Government would now be ensuring that the promised investment this financial year was delivered.

“History has shown that Governments spend hundreds of millions of dollars less than promised in budget estimates,” he said. “Almost inevitably, project timings slip, in part because the infrastructure agencies are not adequately resourced.”

Mr Miller said the significant drop in projected infrastructure spending over the forward estimates was another concern, especially for the roads sector.

“While those estimates could be topped up with Federal grants for road projects, that will be dependent on the State Government maintaining its commitment to roads and continuing to put forward projects for funding,” he said. “Our State’s road-building sector is a major employer and needs a sustainable pipeline of projects.”

Mr Miller said the increases in payroll tax were unfortunate and would prove counter-productive to the Government’s jobs creation strategy.

“Our large corporations employ thousands of Western Australians and invest billions of dollars every year on infrastructure,” he said. “The last thing the Government should be doing is hitting these companies with a disincentive to keep employing and investing.

“We all understand the budget repair task the Government is facing, and that tough and unpopular decisions are necessary.

“That is why we urge the Government to reconsider its stance on asset sales, and particularly to reverse its position on the sale of Western Power.”

 

Asset Investment – key infrastructure agencies ($million)

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