Federal Budget 2009-10: The Big Infrastructure Spend & GST Amendments

On 12 May 2009, Federal Treasurer Wayne Swan, guided by advice from Infrastructure Australia, unveiled the Rudd Government's commitment to outlay $8.4 billion over the coming years for transport infrastructure. Along with the infrastructure funding, the Government also announced its intention to amend the GST rules applicable to the transportation of goods and subsequently released a discussion paper on the proposal. In this article we look at these two Budget initiatives and whether they are likely to deliver the long-term benefits needed to place Australian industry in a strong position for the future.

Why the big spend?

Australia has made substantial progress in reforming its transport infrastructure markets over the last few decades. However despite the fact that government investment in infrastructure, as a proportion of GDP, has traditionally been high, over the last decade evidence has emerged of inadequate provision of road, rail and port infrastructure in