Investment in roads reinstated

Posted October 28, 2015

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Completed upgrade works at Middle Rd, Anduramba, north of Toowoomba.

State and federal funding boosts mean an extra $1 billion will be channelled into council road projects in Queensland over the next two years, the Local Government Association of Queensland says.

LGAQ chief executive Greg Hallam said this represented an increase of about one third in total funding, taking the construction and special maintenance spend for councils statewide to around $4 billion over 2015-16 and 2016-17.

“It’s a sweet spot and our aim now is to continue it beyond the two years,” he said.

“Things are tough in regional Australia and there is no doubt that this is a classic Keynesian counter-cyclical economic stimulus measure, but it also reflects the tight political situation at state and federal levels.”

The extra roads funding from State and federal levels totals about $700 million over two years, resulting in a $1 billion boost when matched funding from local government is taken into account.

It comes from areas including fuel excise indexation, the Roads to Recovery and Building Our Regions programs, and a renewed commitment to the Transport Infrastructure Development Scheme.

FKG Group business development manager – engineering Chris Safonoff said the availability of council-funded roadworks was essential to contractors who had invested in establishing themselves in regional locations. They sustained the local labour force, allowing equipment to be based locally and utilised regularly.

The injection of State and Australian Government funds into the road industry would go a long way to alleviating some of the stresses on the marketplace due to a recent downturn of projects, Mr Safonoff said.

“When markets are stressed, as is the case currently, some contractors will ‘buy’ works at cost to maintain their workforce,” he said.

“This places great pressure on not only contractors but the entire supply chain as these cuts are required to be absorbed in other areas.

“A solid pipeline of future government spending can give the industry more clarity about upcoming project values and the regions where the work will be awarded in the next 12-24 months.”

The Palaszczuk Government Budget for 2015/16 reinstated the State commitment to the Transport Infrastructure Development Scheme (TIDS), which Mr Hallam said was created to allow councils to conduct longer-term strategic planning across council boundaries and across funding years.

“Councils fund this 50/50 and it was disappointing for us under the last government that the TIDS money was cut back to $30 million (annually), which really did put a dampener on the process,” he said.

He said it was an absolute godsend to have the current State Government double that amount and add $10 million (taking its contribution to $70 million a year for the next two years).

The Queensland Government has also dedicated $200 million of its Building Our Regions program over the next two years to local government projects.

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