Federal Infrastructure Minister Catherine King has been rolled in her efforts to decrease the Commonwealth’s share of major transport funding, according to the Tasmanian government, as WA added its voice to the groundswell of state and territory antagonism to Ms King’s efforts to land a deal.
Ms King has since late last year been seeking agreement to dilute the Commonwealth’s formula for road and railway projects from 80:20 to 50:50 and has won over South Australia, the ACT and Queensland, which faces an election in October.
However, the ABC reported on Wednesday that the nation’s most populous states – NSW and Victoria – are pushing back against Ms King’s changes.
NSW, Tasmania, the NT and WA are yet to sign up to the five-year road and rail funding agreement, which replaces the Morrison government’s 2019 agreement that expired at the end of June.
WA deputy premier Rita Saffioti said her state was still negotiating with Ms King to ensure funding is secured on a case-by-case basis “where the Commonwealth will look at each project and fund according to their merits”.
“We are disappointed about the movement away from 80:20 to 50:50, particular for the regional highway network,” Ms Saffioti said, adding that the changes would cost the states “hundreds of millions of dollars” in additional funding.
While Ms King has repeatedly stated the overall funding amount will be unchanged under the agreement, the shift means states will need to carry a greater burden on projects of national significance, potentially diverting resources from other, smaller projects.
“I think it’ll have a bigger impact on our state budget, frankly,” Ms Saffioti said.
“We’re already spending a record amount in regional WA, so we’ll need to be spending more of the state budget in regional WA on roads as we’ll be getting less funds from the federal government.
“WA’s resources sector drives billions of dollars into the Commonwealth budget and so we need to constantly assist those projects. And sometimes that is by way of port infrastructure, road infrastructure or other infrastructure, and that’s why we’re arguing for it on a case-by-case basis”.
Ms King’s Federal Funding Agreement, published on Monday, “has turned into a shambles with the larger states pushing back hard” on an across-the-board 50:50 funding formula, said federal opposition infrastructure spokeswoman Bridget McKenzie.
“The states know this is cost shifting to them and they will be forced to pay more for road funding projects, or in more likelihood, cancel them,” she said.
Senator McKenzie also accused the government of misleading parliament after the Senate was told by Labor that the funding deal was “finalised” on August 11.
“Clearly, given the push-back from the states, this was misleading the parliament.”
Tasmania Treasurer Michael Ferguson earlier this week celebrated what he described as federal Labor’s “recent back-down on its unacceptable approach to funding for roads and bridges in Tasmania, and Australia more broadly”.
“Thanks to the strong efforts of state and territory treasurers and infrastructure ministers, we have been able to stare down the Australian government,” he said.
“The clause that would have hard-wired a 50:50 arrangement in the new agreement has now been withdrawn from the latest offer from the federal minister for infrastructure.”
Mr Ferguson said that would have meant “less investment in safer and more reliable roads in regional and rural Tasmania”.
“I welcome that Minister King has seen sense and returned to the negotiating table with a reasonable offer, which the Tasmanian government will now consider favourably.”
Ms King’s office has been contacted for comment.
