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NSW charges ahead with $107 billion infrastructure pipeline despite record deficit

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By Tom Rabe, via SMH


The NSW government will push ahead with its mammoth infrastructure pipeline despite record deficit, promising to spend more than $107 billion over the next four years to spur economic growth.

An extra $7 billion was allocated to state infrastructure in Tuesday’s budget, with the government allocating billions to Sydney Metro West and allocating cash for pre-construction works on the Western Harbour Tunnel.

In delivering a $16 billion deficit, Treasurer Dominic Perrottet said the unprecedented infrastructure pipeline would form a key pillar in rebuilding the economy, with the slated sale of its remaining stake in WestConnex expected to help fund the work.

“This state-building pipeline will drive our recovery and strengthen our state, so we can stand tall today and lift future generations even higher,” Mr Perrottet said.

Rather than diverting cash from the $107 billion pipeline to fund more immediate “shovel-ready” projects, the government will instead take advantage of low interest rates to borrow the money needed to fund them.

With unemployment set to peak at 7.5 per cent this year, and construction contracting by almost 10 per cent, the government will pour hundreds of millions into smaller maintenance projects to boost jobs growth.

“Throughout this pandemic, critical construction and maintenance work across NSW roads and transport networks has kept more than 130,000 people directly and indirectly employed by Transport for NSW,” Transport Minister Andrew Constance said.

More than $800 million will be spent on new social housing and maintaining existing stock, while another $256 million will fund upgrades and maintenance work at national parks, Sydney Olympic Park, as well as Crown land.

While more than $500 million has been allocated to the 12-kilometre first stage Parramatta Light Rail in 2020/21, there is no mention of the second stage in the budget.

Mr Constance last week gave his strongest indication yet that the government planned to shelve the second stage and use “trackless trams” or buses to service the route between Camellia and Sydney Olympic Park.

More than $1.6 billion has been dedicated to bus services, including those servicing schools and regional areas, another $500 million to fund early construction works of the Sydney Gateway, while $1 billion will fund extra trains and services.

Meanwhile, the government’s signature Metro rail project will receive $28 billion over the forward estimates, including the beginning of construction of the Sydney Metro West, which will travel from the city, through Sydenham in the south and to Bankstown in the west.

An extra $2.7 billion has been allocated to infrastructure commitments in Restart NSW, including more than $477 million for the Western Harbour Tunnel and M6 project.

While there is no mention of the Northern Beaches Link in the budget, a government spokeswoman said development money was allocated as part of the Western Harbour Tunnel project, with an environmental impact statement expected to be released before the end of the year.

Transport will make up 56 per cent of the state’s capital expenditure over the next four years, while it will rely on more than $10 billion from the Commonwealth over the four years to 2023-24.

In total, $8.7 billion has been dedicated to regional public transport and roads in 2020/21.

“That’s hundreds of projects that will start across the state in the next 12 months, helping councils to create and support jobs, drive productivity and keep our regional communities connected,” Minister for Regional Transport Paul Toole said.

Education and health infrastructure are both forecast to make up 11 per cent of capital expenditure, with $1.4 billion allocated to new and upgraded schools.

Another $3 billion will flow to health, including $450 million for the second stage of the fast-tracked Nepean Hospital, which has been brought forward by two years.

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