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Expanding Regional Australia: How the Federal Government Plans to Use Infrastructure to Expand Regional Economies


Diarmuid Healy

By

October 26th, 2020


In this article, Diarmuid Healy investigates what the 2020 budget has on offer for the communities of regional Australia.


In the recently announced 2020 budget, the federal government presented detailed plans on how it intends to expand regional spending in order to boost the economy. The federal government is planning on spending $3 Billion [1] immediately and $14 billion [1] in a 10-year plan. The spending aims to initially improve economic growth that has been drastically halted since the beginning of the pandemic, with intentions to create immediate jobs.

The Federal Government plans on using $1 billion [1] to immediately build and replace certain pieces of infrastructure, with bike paths, streetlights, footpaths, walking tracks, community halls, and barbecue facilities all planned on being upgrade through this government plan. Furthermore, an additional $2 Billion [1] will be allocated to road safety upgrades including installing wire rope safety barriers.

The Federal Government indicated the money comes with condition with allocated money to be used immediately, and therefore if state governments are slow to act said funding will be pulled. This indicates a clear act of desperation by the Federal government with a desire to boost the economy in the short term. Such conditions put pressure on local councils and state governments to ensure correct plans are in place to secure funding and increase job growth.

Apart from the immediate future, the $14 billion allocated to infrastructure projects across a 10-year period indicate the desire for this budget to be seen as a long-term stimulus for economic growth. The long-term job creation is believed to be 40,000 new jobs [1] as a result of the projects which include road upgrades and railway repairs.

However, regional leaders are worried that the immediacy of the policies will be offset by long term decline, as these jobs leave once projects are completed. When large infrastructure projects are announced, contractors and workers will live in a small regional town and create economic growth throughout the building of a project, however upon completion these jobs will leave along with the economic benefits that it provided. As a result, in the long-term infrastructure projects cannot provide the support that regional towns truly need. Regional leaders believe Capital works project (projects that generate income) should be granted to councils and towns based on a preference system which will allow for towns in need of development the access required to grow their economies.

The government has also indicated a desire to improve internet and technology ability of regional towns with $30 million [1] grant towards the Regional connectivity project which aims at providing regional towns with a higher speed of internet. Faster internet will allow for faster productivity growth and cost saving in specific sections of the economy.

The Federal Government’s 2020 budget is overall a positive and beneficial budget for regional Victoria. The large spending on infrastructure in both the short and long term indicates a desire to stimulate local economies through job growth. Even though concerns have been expressed by regional leaders, the potential growth through that is created will likely be furthered as increase spending on roads and railways create a direct and smooth form of transport to regional towns from metropolitan cities, which will ultimately grow economy even further.

• References

[1] 2020. [Online]. Available: https://www.abc.net.au/news/rural/2020-10-07/roads-infrastructure-get-regional-federal-budget-boost/12732208. [Accessed: 10- Oct- 2020].

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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