Common wealth funding

Can the Commonwealth take over responsibility for funding public transport in Australia? Why or why not?

Common wealth is open to funding public transport in Australia through investing in critical rail, and urban buses infrastructure. Investment in transport industry improves productivity, creates jobs and facilitates supply of goods and services.  It has recently identified 12 projects in 2015 submission to infrastructure Australia (IA) majoring in south East Queensland. Projects include upgrading Bruce highways, Beerburrum to Nambour rail upgrade, cross-river rail, Gold coast light rail-stage 2, Ipswich motorway, Cunningham highway, pacific motorway, and inland rail (Urban development institute of Australia (Queensland) 2016).

Commonwealth will take over responsibility for funding public transport in Australia because it is a constitutional responsibility under section 96. In addition, it has capacity to financially support states and territories in areas such as roads, education, and health. It has strong influence over provision of infrastructure in ways such as availing funds to territories and states in specific purpose payments (Laird & Bachels 2001).

It is involved in formulating policies such as provision of taxation and national competition and accumulates money through investments by government business enterprises and agencies (GBEs). In support, the commonwealth accounted for quarter public infrastructure in 1990s, which was provided by GBEs directly. In 20002003 the funds amounted to over $2.5 billion where road programs were highest funded with $977 million (Webb 2004).

Common wealth has the capability of funding public transport in Australia through formulation of policies favoring improvement of transport sector. Common wealth approves the use of untied identified road grants from states and payments done as tied block grants. Commonwealth funding on roads is determined by the contexts of the budget without considering revenue raised from specific taxes, road competes expenditure among other expenses.

Commonwealth is responsible of determining road funds on a yearly basis through long term planning and regulating road construction costs. Moreover, common wealth has added greater certainty to people by considering a funding approach of a three-year period. Common wealth has continuously funded roads and built trust with people on road constructions. It has provided grants to four road categories, National highways, state arterials, national arterials, and local roads in early 1990s. Common wealth provided financial assistance to local governments to construct state arterials and local roads. Between 1990 and 1991, common wealth funded three road programs, the black spot, rural highways, provincial cities, and transport programs in urban public sections (Webb 2000).

The House of Representatives in Australia has reviewed common wealth’s involvement in public funding in 1990 and gave the following recommendations on roads. It decided to concentrate with funding national road networks, untie local roads grants, and incorporate them into assisting local governments otherwise identified as “identified road grants.”  Moreover, it aims at untying state road grants and incorporates them to assist in general revenue to states “identified road grants.” Further changes include ceasing Australian centennial roads development program, introducing reintroduction of black spot program and introduction and ceasation of provincial cities and rural highways program (Webb 2000). It concentrates on introducing roads of national importance and offering additional funds through one national statement.

 

 

Rationalizing responsibilities

Originally common wealth use to give grants to the states to construct and maintain roads under Australian Centennial roads development (ACRD) program. Funds were also offered for transport research and conduction of road safety programs as well as public transport projects in expectation of greater results (Webb 2004). However, changes occurred in category of roads under ALTP and ABRD programs as urban arterial roads, rural arterial roads, local roads, national highway, and development roads. Grants were allocated as per respective category of roads. National arterial roads qualified for the name after the minister for transport was satisfied that it would be competitive in export and import industries and improve tourism sector.

Construction of such roads had to bring high benefit cost ratios to the nation. As a result, funds allocated to each road depended on category given. Example funds allocated to national arterials were only used for construction and upgrading (ARA 2014). Commonwealth has all along taken the responsibility of constructing national road networks, with local and state governments left to fund state and local roads. National highway system is major highways that link territory and state capitals. Example Bruce highway from Brisbane to Cairns and highway joining Hobart to Burnie.

Road programs

Common wealth has continuously funded road programs such as provincial cities and rural highways program, black spot program, and urban transport program. Provincial cities and rural highways program is financed from consolidated revenue. The mission of funding these roads was to generate a source of economic return (Webb 2004). Blackspot program was introduced to maintain road safety in states and territories. Commonwealth has spent $110 million in three years to maintain a site that has been the major causes of injuries to pedestrians, and fatal vehicle accidents. From onsite constructions, accidents reduced by over two and a half.

Urban public transport program was aimed at improving transport in urban sectors, and encourage motorists to switch to public transport.

 

References

Webb, R 2004, “The commonwealth government’s role in infrastructure provision.”  Research      paper   no.8, 2003-2004.

Urban development institute of Australia (Queensland) 2016, “ Commonwealth open to public     transport infrastructure funding for the states.”  News and publications. Retrieved from             http://www.udiaqld.com.au/News-Publications/News/Commonwealth-open-to-public-      transport-infrastructu

ARA 2014, “A review of alternative, sustainable funding and financing sources”. Innovating        funding and financing for public transport, 7(1), 1-28.

Webb, R 2000, “Economics commerce and industrial relations group”. Common wealth road        funding since 1990. Retrieved from            http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Li            brary/pubs/rp/rp9900/2000RP13

Laird, P., & Bachels, M  2001, “Back on track: Rethinking transport policy in Australia and New Zealand. Australia: UNSW press.