Infrastructure projects Australia-wide are the big winners from the Federal Government’s 2021-22 budget with a commitment of an additional $15.2 billion to infrastructure projects over the next 10 years. The investment is part of a $110 billion pipeline of projects ranging from highway construction to transport development.
The Government estimates this pipeline will support more than 30,000 jobs over the lives of the projects in addition to the 100,000 jobs from existing works.
The majority of the projects are highway related, though more than $132 million has been allocated to Stage 2A of the Canberra Light Rail and $2 billion has been earmarked for the Melbourne Intermodal Terminal.
The Australian Institute of Project Management (AIPM), believes the prioritisation of infrastructure will have a follow-on effect, increasing demand for skilled professional resources in areas such as project management.
“The escalation of shovel ready projects, combined with incentivising students to study a select range of subjects, is welcome news as we look at ways to boost Australia’s economy,” said Sid Gokani, CEO of AIPM.
Rob Bryant, executive vice-president for InEight Asia-Pacific, a construction software brand with more than $100 billion in Australian projects on its platform, agreed the spending is a welcome push to restart the economy, but warned the skills gap is an issue to watch.
“Rising job vacancies in the sector presents a significant challenge,” he said.
Bryant also pointed out that the flip-side of government investment is the resulting debt, suggesting that “attracting finance and investment would help reduce that debt”.
However, the inherent riskiness associated with infrastructure investment has made external finance sources reluctant to commit funds.
“Budget blow outs and project delays have long marred infrastructure projects at both a state and federal level, leading to low cost-benefit ratios for projects and low-profit margins for the contractors,” he said.
“Government and the construction industry must work together to ensure proper risk analysis is built in from the concept phase to delivery, based on a long-term investment view and shared risk procurement model.”