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Budget grows rail projects, jobs pipeline

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In the 2020-2021 budget unveiled by federal Treasurer Josh Frydenburg, the total infrastructure pipeline for the next 10 years grew to $110 billion, with a $14 billion increase this year.

The rail projects to receive funding from the increase include the Sydney Metro – Western Sydney Airport line, stage two of the Warrnambool Rail Line, and stage three of the Shepparton rail line.

In Western Australia, new funding has been added to progress the high capacity signalling component of the Metronet works program.

Outside of current projects, funding is also allocated to the business case for faster rail connecting Brisbane and the Gold Coast. Faster rail investigations are also funded in Western Australia, with $4m for the Perth to Bunbury corridor.

CEO of the Australasian Railway Association (ARA) Caroline Wilkie said the funding provided now would lead to benefits in the future.

“We are pleased to see rail projects across the country funded or fast tracked in this year’s budget,” she said.

“The flow on benefits of rail investment will be significant as new projects bring more jobs and sustainable infrastructure that will deliver community benefits for years to come.”

Australian Logistics Council managing director Kirk Coningham sounded a note of caution, highlighting that the $110bn figure depends significant on future decisions.

“It is highly encouraging the government identifies the importance of investing in infrastructure to ensure the efficient and productive operation of the Australian economy,” said Coningham.

“However, while the headline measure sounds impressive, it should be remembered that a 10 year period is six years longer than the forward estimates contained in the Budget – or two Australian parliamentary terms.”

Also contained within the budget figures was an equity injection of an undisclosed figure into the Australian Rail Track Corporation (ARTC). Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the funding would go towards the Inland Rail project.

“The Australian Government’s continued commitment to deliver Inland Rail includes equity and grant funding to the Australian Rail Track Corporation for rail infrastructure initiatives to enhance and maintain the national network,” he said.

Benefits for businesses

Beyond transport and infrastructure funding, many businesses in the rail sector will be able to take advantage of other messages contained in the budget. Businesses looking to take on new staff can benefit from a hiring credit when hiring young people aged 16-35 who were on the JobSeeker.

The government will also invest $1.2bn in up to 100,000 apprentices and trainees. Wilkie said the funding for apprenticeships would benefit the rail sector as projects enter the construction and maintenance phase, especially if those apprenticeships included digital skills for the future of rail.

Chief operating officer of Martinus Rail Ryan Baden said the company, which is engaged in a number of rail infrastructure projects including the Carmichael Rail Network, said the measure came at the right time for rail.

“The wage subsidy program for apprentices and trainees will go hand-in-hand with a number of projects coming on-line and also go a long way to help address the growing skills shortage within the rail industry,” said Baden.

“It’s an exciting time for the rail industry, we are seeing first-hand younger generations coming onboard and it’s important to invest in their skills and their future by teaching them everything we know and love about rail.”

Business groups also welcomed the measures.

“We also welcome the government’s commitment to wage subsidies, particularly targeting young Australians who are at the highest risk of unemployment and helping them into the workforce,” said Business Council of Australia chief executive Jennifer Westacott.

To encourage businesses to invest in plant, companies can immediately expense the cost of capital equipment installed before July 2022. Baden said that for self-performing contractors such as Martinus, this would enable them to purchase new machinery.

“The expansion of the instant asset write off scheme, is a huge benefit for companies like Martinus who are continuing to invest in our self-performing plant and equipment,” said Baden.

Cash flow support will also come in the form of a tax loss carry-back measure for businesses, said Ai Group chief executive Innes Willox.

“It will allow many to stay in business, keep employing people and invest for the future. The provisions will apply in relation to losses in the current and 2021-22 financial years.”

A manufacturing resurgence?

Also included in the budget is $1.5bn for manufacturing. According to Industry Minister Karen Andrews, $13.bn of the funding will go towards the Modern Manufacturing Initiative. This fund will distribute money to projects in six national priority areas: resources technology and critical minerals processing, food and beverage, medical products, recycling and clean energy, defence, and space.

Wilkie said that rail had a role to play in local manufacturing.

“We have significant capability in the rail manufacturing sector, and we must ensure we have the right policy settings to support greater technology and innovation adoption in the rail industry.”

Bombardier Transportation President Australia and New Zealand, Wendy McMillan, said the company was looking at what rail manufacturing could be included in the fund.

“We are supportive of the renewed manufacturing focus as a driver of jobs and skills, and the investments in rail infrastructure. Bombardier looks forward to any inclusion of train and tram rollingstock manufacturing, services, maintenance, engineering and signalling being included in the industry and manufacturing discussion in the months ahead.”

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