VIC State Budget 2018/19 | Infrastructure

By Craig Whatman - May 1, 2018

The Andrews Labor Government is forecasting a further increase of more than 10% in infrastructure spending during the 2018/19 financial year in comparison to last year’s Budget. While this increase does not match the 28% increase from the previous year, it must be seen in light of the capacity of the State to take on new projects.

Read: Access full Victorian State Budget 2018/19 review here

The infrastructure expenditure, which is currently driving economic activity in Victoria, will continue to represent opportunities for businesses. There is no doubt that the level of investment in infrastructure spending is having a positive impact on economic activity across the state.

The government also recognises that the unprecedented level of construction activity in Victoria and across the eastern seaboard of Australia, is resulting in negative impacts that will need to be managed. These include “lower bidding rates, less contractor competition, constrained availability of plant and resources, and increased costs.” (Budget Paper 4, p 4). This will represent an ongoing challenge to the government to ensure that Victorian taxpayers receive value for money in delivering these projects. No doubt it is a challenge to relish.

Significant spending on public infrastructure projects

Expenditure on transport infrastructure continues to be a key hallmark of the Budget. Some projects have been announced in previous Budgets and will progress in the course of the next year. A number of new transport initiatives have also been announced.

While transport continues to be a key focus of infrastructure spending by the state, it is by no means the sole area of expenditure. Hospitals, schools and law and order are other areas that will benefit from the government’s big spending Budget.

As many Victorians who are caught up in bottlenecks and delays due to construction activities will attest, there are a number of well advanced projects across the state. No doubt the short-term pain will be offset by the long-term gains once these projects are completed and they deliver the promised efficiencies to the Victorian community.

Impact on middle market businesses

Businesses in the construction and building industries and associated service industries will welcome the continued focus on infrastructure spending. This expenditure will continue to provide opportunities for growth and jobs in the Victorian economy. Many middle market businesses will continue to be in a position to take advantage of the opportunities arising out of the Budget.

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