Where the $4.5 billion in "cuts" came from

Now that Malcolm Turnbull’s been made captain, the Opposition’s never-ending supply of free kicks on issues like public transport looks likely to come to an abrupt halt.

Bill Shorten’s immediate response is to demand the new Prime Minister put his money where his mouth is. Here’s the Opposition Leader on Q&A on Monday night:

In terms of public transport infrastructure, one thing Mr Turnbull could do is it’s good to catch the train but what’s more important is reverse the four and a half billion dollars worth of cuts that they took away from public transport infrastructure.

And then in response to a follow-up question he kicked harder:

The reason why I spoke about public transport infrastructure in the big cities is there’s four and a half billion dollars which the current Liberal Government have cut; if you really believe in public transport rather than just social media memes, what we need to do is see some of that money come back into public transport.

The Shadow Minister for Transport and Infrastructure, Anthony Albanese, conveniently provided a list on Twitter yesterday of the projects the Opposition says suffered funding cuts under the Abbott Government (see exhibit).

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It’s good to see both major parties now openly acknowledging the Commonwealth has a crucial role in funding urban public transport; Tony Abbott’s policy was hopefully a two year aberration.

However there’s a big problem with the Opposition’s strategy; all or most of the $4.5 billion was never “cut” from public transport because it never existed in the first place; it was merely notional.

I noted a couple of years ago (What does the budget say about transport?) that Wayne Swann’s 2013/14 budget claimed to provide funding for three major rail projects: (1)

  • $3.0 billion for the $11 billion Melbourne Metro rail tunnel.
  • $0.71 billion for the Brisbane Cross River Rail.
  • $0.5 billion for Perth Light Rail (or construction of a new rail link to the city’s airport).

I commented then that it looked like smoke and mirrors because hardly any of the money was committed in the practical sense of being within the budget’s four year outlook to 2016/17.

The subsequent release of more detailed information confirmed that suspicion. In particular, of the $3 billion supposedly allocated for Melbourne Metro in the 2013/14 budget, a mere $25 million was budgeted in 2015/16 and $50 million in $2016/17.

The then Prime Minister, Julia Gillard, subsequently laid it out clearly; in 2013 she said she would provide $3 Billion for Melbourne Metro if she won the 2013 election.

She acknowledged the bulk of the funds would not become available until circa 2020. At the time, that would’ve been after three Federal elections!

The reality is the great bulk of the promised funding was notional. Governments can and will promise anything on the never-never, especially if they’re feeling desperate.

There’s also another fact that can’t be conveniently overlooked; voters resoundingly repudiated the Gillard/Rudd program.

However misguided he might’ve been, Mr Abbott won the election despite making it crystal clear the government he led would not fund urban public transport.

Now that the Abbott Aberration has passed, the Commonwealth can and should resume funding urban public transport infrastructure. But there’s no bucket of real money cut from public transport projects that Mr Turnbull can draw on.

He’s going to have to find the funds in the customary way i.e. by foregoing other expenditure priorities and by increasing revenue. That’ll be a particularly hard job on his side of politics.

And let’s not be fooled if one day he too starts promising to fund glamorous projects where the money doesn’t flow until after three elections; right now that could be as distant as 2022-2025.

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  1. I couldn’t find any specific amounts in the 2013/14 budget for the Adelaide and Hobart light rail projects cited by Mr Albanese.