The 2022-23 Federal Budget will deliver more than $2 billion to water security and infrastructure projects, $550 million to the newly-introduced $1 billion National Skills Agreement supported by state and territory governments, and undertake several energy sustainability initiatives from its $20 billion Rewiring the Nation fund.
Inflationary pressures amid a global economic downturn, coupled with a trillion dollars in national debt has seen the recently elected Federal Government limit spending, instead focusing on improving the quality of government investments.
Australia’s new economic direction follows from a period of significant investment in economic stimulus and social welfare, motivated by the ongoing COVID-19 pandemic and international uncertainty.
The gamble resulted in a projected $28.5 billion reduction to the national debt, though resulting in less spending it was nonetheless broadly supported by infrastructure peak-bodies and representatives.
Projects defunded
Several projects introduced by the former Coalition Government – including Queensland’s Hells Gates Dam project – will no longer be funded under the new budget.
Almost $900 million in funding will be deferred over the next four years from projects including the Dungowan Dam and Pipeline, Emu Swamp Dam and Pipeline, Hughenden Irrigation Scheme and the Wyangala Dam Wall Raising Project.
The Government said projects will be reconsidered once business cases are completed “and viable pathways to delivery are determined and assessed”.
Cuts from the national water grid fund are another huge source of savings: worth $1.7 billion over four years or $4.6 billion over twelve years, this includes:
- $5.4 billion saved by not proceeding with the Hells Gate Dam project in Queensland
- $900 million of funding over four years for the Dungowan and Emu Swamp dams and pipelines, the Hughenden Irrigation Scheme and the Wyangala Dam wall raising will be deferred “to be reconsidered once business cases are completed and viable pathways to delivery” determined
- Returning $174 million over four years from unallocated and uncontracted funding from the water grid fund
Water infrastructure and security
Investment in the construction of new and upgraded water infrastructure, totalling $1.1 billion, will aim to improve long-term water security ahead of escalating risks attributed to climate change and population growth, these include:
- $600 million towards the Paradise Dam Improvement project in Queensland
- $107.5 million towards the Cairns Water Security – Stage 1 project in Queensland
- $3.5 million towards the Mount Morgan Water Supply project in Queensland
- $12.5 million towards groundwater improvement and water efficiency in the lower Burdekin, Queensland
- $11.5 million towards strategic planning for improving water security in Queensland
- $8.0 million in additional funding towards Big Rocks Weir in Queensland
- $100.0 million towards the Pipeline to Prosperity Tranche 3 projects in Tasmania
- $300.6 million towards the Darwin Region Water Supply – Stage 1 in the Northern Territory
- $7.1 million towards the Adelaide River Science project in the Northern Territory
- $23.0 million towards the Nyngan to Cobar Pipeline – Stage 1 in New South Wales
The Government will also broaden the remit of the National Water Grid Investment Framework to allow funding for a broader range of projects, including essential town water supplies in regional and remote communities.
Energy and sustainability
The Government’s ambitious Rewiring the Nation plan will deliver billions of dollars in conditional loans to energy providers and facilitators, establish a national partnership between the territory, state and federal governments, and introduce several major reforms to the sector.
Significant reforms to the industry will be delivered in three separate policy commitments, including:
Rewiring the Nation
$20 billion in low-cost finance for the urgent upgrade and expansion of Australia’s electricity grid at lowest cost – to unlock new renewables, increase the security of the grid and drive down power prices. This includes more than $6 billion already announced to help build Marinus Link and VNI-West, which will unlock Tasmania’s Battery of the Nation and Victoria’s offshore wind and renewables industries.
Powering the Regions
Establishes the $1.9 billion Powering the Regions Fund, which will provide dedicated support to make sure traditional and new industries in regional Australia can harness the economic opportunities of decarbonisation. This Fund will support new jobs and long-term international competitiveness.
National Energy Transformation Partnership
Establishing for the first time an agreed national plan between the states, territories, and the Commonwealth to keep the lights on through Australia’s massive energy transformation. This includes delivering critical market reforms, supporting investments in the grid such as large-scale storage and transmission, and helping to make homes and appliances more energy efficient.
Investment highlights under the new commitments include:
- $71.9 million to build a Hydrogen Hub in Townsville, to fast-track Australia’s green hydrogen industry and take the Federal Government’s planned investments in regional hydrogen hubs to well over $525 million
- $62.6 million for an energy efficiency grants program for small and medium-sized business to reduce energy use and lower energy bills
- $141.1 million to realign investment in carbon capture technologies to hard-to-abate industrial sectors (such as cement manufacturing) and accelerating carbon dioxide removal and negative emissions technologies
Addressing the skills shortage
The Budget will commit $550 million to fee-free TAFE and an additional 20,000 university places from the $1 billion National Skills Agreement, jointly funded by state and territory governments.
It will provide extra places for people studying bachelor and sub-bachelor courses in areas of skills needed across 42 successful higher education providers.
An additional 1,738 engineering courses will be delivered under the new policy.
The additional places will be for students starting next year and in 2024 with an investment of up to $485.5 million over the next four years.
The five higher education providers receiving the most funding for additional places are:
- Charles Darwin University
- University of Wollongong
- Curtin University
- Edith Cowan University
- University of Newcastle
The Government is also delivering 180,000 fee-free TAFE and vocational education places, with extra support for participation of women and other disadvantaged groups.
