Truck Talk Australia: $10b to upgrade transport woes

"Courier Mail"

A massive $10 billion-plus pool of money will be set aside in the upcoming Federal Budget to tackle the chronic traffic congestion plaguing Australian cities.

Called the Building Australia Fund, the multibillion-dollar scheme will also channel revenue from the Budget surplus into upgrading the nation's ageing rail and port facilities.

The new federal infrastructure fund is designed to demonstrate the Rudd Government's commitment to modernising the Australian economy and unclogging major bottlenecks.

The Building Australia Fund was discussed at length in Opposition by key Labor Party figures concerned about declining productivity and is expected to be re-launched in the Budget.

Sources in Canberra say a "substantial proportion" of this year's Budget surplus – which is set to top $17 billion – will be hived off into the new fund.

Last year, then treasurer Peter Costello unveiled a $6 billion Higher Education Endowment Fund and the Rudd Government will trump this.

Finance Minister Lindsay Tanner told The Courier-Mail that no detailed decisions had been made about this year's Budget surplus but said the Government was committed to investing in the future.

"If we don't increase our investments in skills and infrastructure then we will be dealing with significant inflation problems," Mr Tanner said.

He said the former government had failed when it came to infrastructure. 
"The Howard government did not spend money where it mattered."

The Government will keep itself at arm's length from direct financial decisions by allowing a newly-created body, called Infrastructure Australia, to allocate money from the new fund.

Last week, Parliament approved legislation to establish Infrastructure Australia, an independent statutory authority to be headed by well-known businessman Sir Rod Eddington.

Prime Minister Kevin Rudd has listed infrastructure development as one of the five ways of fighting inflation and Treasurer Wayne Swan often says "capacity constraints" must be overcome.

The Federal Government has promised not to "squander" the financial legacy of the mining boom but there are limited options where the Government can park its extra billions without adding to inflation.

The previous government carved off money for the Future Fund but this has already swollen to almost $60 billion.

The other major option for the Budget surplus billions is for money to be put into a new superannuation fund to help boost national savings.

Infrastructure will be a major agenda item on Wednesday when Mr Rudd meets all the state leaders in Adelaide. Queensland Premier Anna Bligh said there was a new attitude in Canberra since the change of government.

"It will be great to have a Federal Government that is interested in nation building. We have been doing it on our own for a number of years," she said.

"Courier Mail"