Federal Budget 2016-17

[Stillwater]

See: http://www.statedevelopment.qld.gov.au/major-projects/north-queensland-stadium.html

The caption on the picture says it all ....

An artist’s impression of the aspirational design for the proposed North Queensland Stadium.

Good enough to invest government money in aspirational projects.

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[newbris]

You're missing my point. Is it fair that it is tied to asset sales in the first place.

Fair share of money would seem to be fair....tying federal money to asset sales is trying to push a federal govt ideology onto the states against the explicit wishes of its electorate it would seem.

While it is true that the Queensland Government was elected on a no sale platform, it is also true that the Australian Government was elected on a platform that had asset recycling in it. It is fair, simply because QLD already has the funds (just locked away).

There is no 'ideology' free option. The allocation of funds is not a technical thing that an equation will pop out the answer. Some people are comfortable with massive gov't borrowing. Others are not. Some people are comfortable with selling/leasing tree plantations, power generators etc, others are not. And so forth.

It is also voluntary, and the Queensland Government does have the ability to raise its own funds, so it isn't a situation of being forced. It just doesn't want to make a hard decision to put a big borrowing into its own balance sheet, because then the game will be up, and it will be obvious because the QLD Gov't budget will go backwards.

The federal govt can sell all the assets it owns. This tying of a fair share of federal money to "state" asset sales ties federal funding to a state owned policy area.

Sure, the qld govt needs to do its planning as quick as possible, and may have other borrowing options to help contribute, but they are separate points in and of themselves that do not change the question I am posing....if we agree that the federal govt of both stripes in recent years has contributed some money to state urban projects and continues to do so...why is it ok to tie queenland's share to a "state" policy area of not selling assets seemingly guaranteeing we get no money no matter what planning is done... ?

There may be a valid reason but I haven't heard one yet...if a conservative state govt of the future wins a strong mandate to sell assets and the federal labor govt only funds states that don't sell assets, would this be stamping on states rights ? (ok, maybe not quite equivalent but I'm sure there are examples that make this point)...

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[ozbob]

http://www.statedevelopment.qld.gov.au/major-projects/north-queensland-stadium.html

Note:

" ... The commercial-in-confidence business case has been provided to the Australian Government. ... "

PUKE!  Why should business cases be hidden from the public?  Obviously very very suspect project this  ...

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[ozbob]

^ where is the fuking fly-through animation vid ?   Crikey, talk about a dog of a project ...

 

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[newbris]

Don't fall for the rhetoric about Queensland missing out on infrastructure funding because it has refused to sell state assets in order to receive federal funding.  The reality is that projects such as CRR and the SCL duplication ARE NOT READY TO BE FUNDED because the state has been tardy in preparing the business cases.  These are projects where the private sector will contribute funding.  The private sector will want to see the business cases also.  The Queensland Government will have us believe this is a Lib-Labor thing, with Labor being the champions of Queensland against the neglect of the Libs and LNP.  This is a smokescreen.  The fundamental failure of the Queensland Government to prepare major projects beyond the dreaming stage, to the point where a proper business case has been prepared and the project fully costed and funding sources explored, is the reason why Queensland lost out in the Federal Budget.  Queensland Labor has not brought these projects to the point where they are ready to be considered for funding by the feds.  That's the problem.

So they would have been funded without asset sales ?

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[#Metro]

" commercial in confidence " That is the most ridiculous thing I have heard!

The BCR and NPV are usually known things. Indeed the BCR gives no information about a projects costs to construct as it is a ratio, it is dimensionless.

 $2 benefit / $1 cost  = BCR 2

$2 billion benefit / $ 1 billion cost = BCR 2

^^ can't tell what the costs to construct or benefits are from the BCR alone.

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[#Metro]

The federal govt can sell all the assets it owns. This tying of a fair share of federal money to "state" asset sales ties federal funding to a state owned policy area.

Both the Federal and State budgets are controlled by the respective state and federal governments, who have the right to impose conditions on such money.

Sure, the qld govt needs to do its planning as quick as possible, and may have other borrowing options to help contribute, but they are separate points in and of themselves that do not change the question I am posing....if we agree that the federal govt of both stripes in recent years has contributed some money to state urban projects and continues to do so...why is it ok to tie queenland's share to a "state" policy area of not selling assets seemingly guaranteeing we get no money no matter what planning is done... ?

The Queensland Government can get funds. As it has for roads and Gold Coast Light Rail. It just won't get the bonus 15% (or whatever it is) that comes with asset recycling because they have decided not to participate in it.

It isn't a situation of being forced, as I wrote earlier, the QLD Gov't is free to reject the proposal and take alternative options (none are particularly politically easy either).

There may be a valid reason but I haven't heard one yet...if a conservative state govt of the future wins a strong mandate to sell assets and the federal labor govt only funds states that don't sell assets, would this be stamping on states rights ? (ok, maybe not quite equivalent but I'm sure there are examples that make this point)...

No, it would not be stamping on State's rights. States have no right (happy to be corrected) to a share of the Federal Budget without the terms and conditions of the Federal Government of the day applying to that said money. The scheme is voluntary (not mandatory) to participate in, and the QLD Gov does have alternative ways to raise revenue. So it cannot be argued that it is being forced to do something, or forced into a corner.

If the Federal Gov't was making a mandatory law that forced the sale of state assets, or the Queensland Gov't did not have any other funding source other than Fed Gov grants, then you would be right. However, this is not the case.

Constitution Act 1867 (now superceded by the 2001 version)
https://www.legislation.qld.gov.au/LEGISLTN/CURRENT/C/ConstA1867.pdf

2 Legislative Assembly constituted
Within the said Colony of Queensland Her Majesty shall have
power by and with the advice and consent of the said
Assembly to make laws for the peace welfare and good
government of the colony in all cases whatsoever.

^^^ Queensland Government is ultimately responsible for funding and running QLD.

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[newbris]

The federal govt can sell all the assets it owns. This tying of a fair share of federal money to "state" asset sales ties federal funding to a state owned policy area.

Both the Federal and State budgets are controlled by the respective state and federal governments, who have the right to impose conditions on such money.
...<snip for brevity>

Yes, the federal govt "have the right" in the fact that they are allowed to do it, and of course the state is not "being forced", it can go without its fair share and be poorer...none of that is the point....the question was "should" the federal govt do it....after all the money came from all of us so imposing conditions that will obviously direct it back to only some states seems to be poor form, pork barrelling and bad precedent

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[Stillwater]

Folks, the issue is not funding from sale of assets, nor policies contingent on the sale of assets.  It is a LACK OF COGENT BUSINESS PLANS.  The state government has not prepared them.  If you are a business seeking a bank loan, the bank wants to see your business plan.  If you are a state government seeking federal funding for a major infrastructure project, you are required to lodge a business case with IA for evaluation.  The business case for CRR has not been completed, has not been lodged.  The business case for SCL duplication has not been completed and is scheduled to be completed in mid-2017.  Until a state lodges a completed business case for a project, it is not considered for funding by the feds.

Those wanting the feds to grant money for CRR now should ask these questions:  What is the project?  What is its scope?  How much is the state putting in and how much is the private sector putting in, leaving how much for the feds to pay up?  What is the project BCR?  How does this project fit in with an overall transport plan for SEQ?

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[newbris]

Folks, the issue is not funding from sale of assets, nor policies contingent on the sale of assets.  It is a LACK OF COGENT BUSINESS PLANS.  The state government has not prepared them.  If you are a business seeking a bank loan, the bank wants to see your business plan.  If you are a state government seeking federal funding for a major infrastructure project, you are required to lodge a business case with IA for evaluation.  The business case for CRR has not been completed, has not been lodged.  The business case for SCL duplication has not been completed and is scheduled to be completed in mid-2017.  Until a state lodges a completed business case for a project, it is not considered for funding by the feds.

Those wanting the feds to grant money for CRR now should ask these questions:  What is the project?  What is its scope?  How much is the state putting in and how much is the private sector putting in, leaving how much for the feds to pay up?  What is the project BCR?  How does this project fit in with an overall transport plan for SEQ?

That seems to over simplify the issue. It seems to be both:
- whether or not the plan has taken longer than the complexity of the planning merits; "and"
- whether when the plan is submitted the lack of federal funding due to A. federal govt reducing forward rail transport funding to 0 (from Bob's post reproduced below) to prioritise roads or B. tying funding to asset sales which may make all planning a moot point.

For all we know the plan could appear next month...how can both not be relevant for the realisation of this project ?

Twitter

Tramy McTramface ‏@trainspotter67 21 minutes ago

Why did we bother changing PMs? PM for Public Transport - Not. Page 5-37. Funding down to zero. #Budget2016

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[Stillwater]

For all we know the political imperative could occur next month.  If research shows that CRR is an election-winning project (meaning it will win seats), political parties will promise it -- irrespective of the lack of a business case and irrespective of there being a lack of available money.  btw, the CRR business case is due to be completed by mid-2016.  Since the state government wants to play the politics of infrastructure funding, it should crack the whip, have the business case completed and make it public during the federal election campaign.  Then call on the feds to cough up the dough.

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[newbris]

For all we know the political imperative could occur next month.  If research shows that CRR is an election-winning project (meaning it will win seats), political parties will promise it -- irrespective of the lack of a business case and irrespective of there being a lack of available money.  btw, the CRR business case is due to be completed by mid-2016.  Since the state government wants to play the politics of infrastructure funding, it should crack the whip, have the business case completed and make it public during the federal election campaign.  Then call on the feds to cough up the dough.

"For all we know the political imperative could occur next month.  "....lets hope so though things don't look good. Rail funding seems MIA and you would imagine Malcolm has enough political capital left to get over the line without it. Re the politics of state labor,  you could argue they are whinging before planning, but besides the politics of that, it really doesn't change the fact that federal rail funding does seem to be either disappearing or tied up in a way that we can't get our share sadly.

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[#Metro]

Yes, the federal govt "have the right" in the fact that they are allowed to do it, and of course the state is not "being forced", it can go without its fair share and be poorer...none of that is the point....the question was "should" the federal govt do it....after all the money came from all of us so imposing conditions that will obviously direct it back to only some states seems to be poor form, pork barrelling and bad precedent

A 'should' question is about values, and as such we could all have a big discussion about that and what concept of 'fair' to apply (equal treatment in equal circumstances, different treatment in different circumstances, not giving money to states that already have heaps of it, disbursing funds based on per head basis etc).

The Australian Consitution is clear:

"Section 96 of the Constitution, however, allows the Commonwealth to make conditional grants of money to the States for any purpose. This power to impose conditions on how the money is spent by the States allows the Commonwealth to influence the way things are done in areas over which it has no direct power to pass laws. "

http://www.aph.gov.au/~/media/05%20About%20Parliament/52%20Sen/523%20PPP/2012_Australian_Constitution.pdf

Simply - if they don't like Fed conditions, they have to pay for it themselves.

So my answer here is yes. It can. Should it? Well, personally I think if QLD has the means already, why does it need money from Malcolm?

Folks, the issue is not funding from sale of assets, nor policies contingent on the sale of assets.  It is a LACK OF COGENT BUSINESS PLANS.

Stillwater, you have very good antennae for this kind of strategising thing. Do you think that the business case was deliberately not submitted such that a situation arose oh-so-conveniently just before an election so as to allow Mr Shorten to announce CRR etc funds during his campaign?

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[Stillwater]

State Labor has promised a stadium for Townsville.  It has set aside $100m to fund it, contingent on feds also contributing.  It has lodged a business case for the Townsville stadium.  In the order of things, it wants the stadium funded by the feds first, then CRR because that is the order in which State Labor has planned the rollout of the business cases.  Its plan was for the stadium funding in 2016-17, then (following the lodgement of the CRR business case) CRR in 2017-18 and subsequent years, then SCL duplication from 2018-19.  In other words, one project a year.

To lodge all 3 business cases together would allow the feds to have a choice, and they probably would not pick the Townsville Stadium under those circumstances.

For the State Government, to put Townsville Stadium behind the other projects and their respective business cases would antagonise Katter and Co. and North Qld defector ALP members who have become independents, because it would allow those people to claim Labor is looking after the SE corner and not directing funds to the north.

But why would Malcolm Turnbull cooperate?  Why would he allow federal funds to top up state funds for a Townsville Stadium to be built and allow Anna MkII to fulfil a Labor promise and look good?

The whole situation gets turned on its head during a federal election campaign, of course.  If the election is tight, parties will cast around for marginal electorates they believe they will win and will make political promises about infrastructure in those locations.  The seat of Brisbane looks like going to the Greens after the retirement of Therese Gambaro.  CRR would appeal to Green voters.  Unfortunately for Sunshine Coast voters, they are rusted on conservative supporters.  LNP knows it can count on those seats, Labor knows it can't win, so no little goodies for them, most likely.

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[#Metro]

Perhaps Fares_Fare should run for a position on the Senate? 

Double D election the quotas are reduced by half to 7% I think it is, so who knows, might get over the line!

No pressure FF!!

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[ozbob]

Couriermail --> Queensland ripped off for refusing asset sales, says Treasurer

QUEENSLAND Treasurer Curtis Pitt has accused his Canberra counterpart of attempting to “blackmail” the State Government into selling assets.

Mr Pitt yesterday insisted Federal Treasurer Scott Morrison’s decision to spend $854 million left over from the Asset Recycling Initiative (ARI) on other priorities was an affront to Queensland voters.

The Federal Budget on Tuesday confirmed billions of dollars in extra infrastructure funding would flow to rail and road projects in New South Wales and Victoria where state assets were sold through long-term leases.

The $5 billion ARI, established by former treasurer Joe Hockey in 2014, was closed and the remaining cash funnelled into unnamed priorities.

Mr Pitt denied the State Government’s promise had cost Queensland jobs and infrastructure. “There has been a very clear message in Queensland for two elections in a row that people don’t support (asset sales). We should not be punished for that,” he said.

Mr Pitt said he believed the Federal Government might have shuffled the money aside as an “election goodie basket” to spend during the campaign.

Priority Queensland projects that missed out on federal funding in Tuesday’s budget included Cross River Rail, the Townsville Stadium and the Gateway-Pacific motorway merge.

Consult Australia’s Stacey Rawlings said Labor’s stance was pushing Queensland into “economic oblivion”. “The Government’s refusal to budge from its pre-election commitment is stifling infrastructure growth in our state,” she said.

Infrastructure Partnerships Australia chief executive Brendan Lyon said the ARI had been a “stand-out success” and states that refused to reform should not be rewarded.

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[ozbob]

Twitter

Aust Railway Assoc ‏@AustRail 18h

The ARA has produced a brief 2016/2017 Budget Summary that you can access here: http://www.ara.net.au/publications-list

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[Stillwater]

If Mr Pitt was the Victorian Treasurer, no doubt he would complain that none of the Northern Australia Fund was being spent in that state,

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[ozbob]

Rail Express --> Greens not happy with road-rail imbalance

The Greens have accused Malcolm Turnbull of being too much like Tony Abbott, saying the federal budget announced on May 3 “is full of rehashed Abbott-era projects and does little for commuters”.

Australian Greens senator and spokesperson for transport and infrastructure Janet Rice described the 2016/17 budget as “a huge let down for Australians who are suffering from congestion and sub-standard transport”.

In a budget which Rice says “continues Abbott’s roads roundabout,” just under $2.4 billion is estimated or projected to be spent on rail transport by the Federal Government between 2016/17 and 2019/20.

That compares to $25.3 billion allocated to roads in that same time frame.

The Commonwealth’s listed rail spend will be reduced as existing projects are paid off and new work is funded through alternate means. $0 of capital investment is projected for rail transport in 2019/20.

“Expenses on rail transport will cease from 2018/19 reflecting the completion of existing rail projects, and the government’s decision to provide equity investment in future rail projects,” Budget Paper 1 explains.

Rice says the imbalance between rail and road spending is a continuation of “chronic underinvestment in our trains, trams and buses” by the Federal Government.

“Turnbull’s much-trumpeted $50 billion infrastructure spend is just smoke and mirrors, most just re-announcing Abbott-era projects,” Rice said on Wednesday.

“Less than 10% is going to public transport.

“We’re not going to ease congestion by continuing Tony Abbott’s addiction to great big polluting toll roads.

“Trying to fix congestion by building more roads is like loosening your belt to cure obesity – car use will inevitably expand to fill the space.”

Rice also expressed disappointment the budget was absent of any action on high speed rail.

“Disappointingly, the government’s commitment to high speed rail seems to have been all talk, yet again,” Rice said.

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[Stillwater]

Daily Telegraph story:

THE Turnbull government hid a $1.5 billion election war chest in yesterday’s Budget, which it will now roll out across marginal Coalition seats over the next two weeks.  The Daily Telegraph can reveal about $500 million a year for the next three years has been set aside for pork barrelling for new and as yet ¬unannounced spending. The budget entry confirms extra spending decisions of $1.5 billion, but said those decisions had yet to be announced.

SMH story:

Newspoll, published by News Corp late on Monday night, had the Labor party leading the Coalition 51-49 on a two-party preferred basis. Mr Turnbull's personal ratings were down four points, while Labor leader Bill Shorten's by improved six points, which is outside the margin of error.

Coalition's most vulnerable seats in Queensland: Petrie, Brisbane, Forde, Leichhardt, Herbert

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[Stillwater]

OUTGOING trade envoy ¬Andrew Robb has pulled off the deal of the century for Queensland in a masterstroke that will create thousands of jobs and inject more than $2 billion into two marginal LNP electorates.

Malcolm Turnbull will today announce that 14,000 Singaporean troops will train in Queensland for 18 weeks a year for the next 25 years, plus the Singaporean Government will stump up $2.2 billion to pay for the infrastructure needed for the military contingent in Townsville and Shoalwater Bay.
From next year, thousands of tourism and construction jobs will be created in the ¬marginal seats of Herbert and Capricornia. Both are held by the LNP and have been crippled by the resources downturn and high unemployment.

The construction deal alone dwarfs the $1.6 billion the Government plans to spend on new commitments nationwide during the election campaign.

http://www.news.com.au/national/federal-election/federal-election-2016-malcolm-turnbull-announcement-that-22-billion-will-be-spent-on-infrastructure-in-two-key-queensland-electorates/news-story/cc0ea18207b74a4dd9cf89b81ad8b709

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[ozbob]

Two seats, majority of seats in SEQ ....  CRR anyone?  Raise you a Sunny Coast Line upgrade ??

 

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[ozbob]

Malcolm et al. are going down ....  it will take some big pork barrels to turn it around now ...

The budget is a disaster of sorts ...

Bill et al are still to roll out the barrels ... watch. this. space. 

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