The federal government duds Victoria on transport spending - Grattan Institute

Treasurer Tim Pallas is demanding a fairer share of the GST revenue for Victoria, since we – along with NSW – have been hit far harder than the smaller states by the pandemic, and now face the bill for the health response and business supports.

The Treasurer is absolutely right that Victoria isn’t getting fair recognition of the pandemic burden via the divvying up of GST revenue. But that’s not the only place we’re being dudded by the federal government.

Victoria consistently misses out on federal transport spending. Of the funding we do get, the federal government is all too happy to play favourites with marginal seats.

Victoria has 26 per cent of Australia’s population, but new Grattan Institute research reveals that over the past six terms of federal government – two Labor and four Coalition – we’ve received just 18 per cent of the federal transport funds.

This underweighting cannot be explained by our rate of population growth over the period, or the length of Victorian roads, the amount of passenger or freight traffic, or how much it actually costs the state government to run the transport system.

The states that do better are Queensland and NSW – which just happen to be the states where federal elections are usually won and lost.

The federal government compounds this inequity by funnelling much more discretionary transport funding to the most marginal seats.

The Auditor-General highlighted the pork-barrelling of $660 million for commuter car parks, but what he didn’t examine was what happened to the remaining $4.2 billion in the federal government’s Urban Congestion Fund.

This massive fund sent more than $200 million to each of three marginal Coalition seats: Higgins, centred on Malvern; La Trobe, centred on Pakenham; and Casey, centred on Healesville. Meanwhile, no Urban Congestion Fund dollars went to the safe Labor seats of Wills, centred on Coburg; Gellibrand, centred on Altona and Point Cook; or Hotham, centred on Clayton.

The Coalition federal government is also busy rewarding its base. We’ve known about the commuter car parks for Kooyong, but Grattan research shows the problem is much worse. The five electorates that got the most urban congestion largesse are all in government hands, with Aston, centred on Knoxfield, taking top place at close to $300 million. Of the nine electorates that got none of the Urban Congestion funds, seven are held by Labor and one by the Greens.

For an urban congestion fund, it’s surprising that the electorate that holds the CBD, the Greens-held seat of Melbourne, got just $5 million, while the marginal electorate of Flinders, which includes the Mornington Peninsula, received nearly $100 million, and the marginal electorate of McEwan, which holds Woodend, got $170 million.

The bigger question is why the federal government is funding small local projects in the first place.

The role that the federal government has agreed with the states is that it will contribute to nationally significant infrastructure; that is, where there are benefits to a road or rail link that spill over beyond the state where that road or rail lies.

Roundabouts, overpasses, and commuter car parks can be very important to the community where they lie, but it’s hard to make the case that any car park in the land is nationally significant.

Commuter car parks have attracted attention when they’ve been cancelled due to infeasibility or community opposition. But they’re by no means the only small local projects funded by the federal government. In the past 13 years, successive federal governments have funded nearly 800 roundabouts, overpasses, and car parks that are not connected with any nationally significant roads or rail lines.

Of course, nobody is surprised that politicians are throwing money at seats they hope to win at the upcoming federal election. Some people defend it – after all, aren’t politicians supposed to lobby hard in Canberra for their communities? Perhaps – but not like this.

Throwing money at marginal seats and electorally important states ignores questions of what communities actually need, and never is that truer than when politicians whip up ideas on the back of an envelope or based on a colour-coded electorate spreadsheet.

Voters should demand better. Whichever party wins the 2022 federal election should strengthen the transport spending guardrails. The government, whether Labor or Coalition, should require a minister, before approving funding of a project, to consider and publish Infrastructure Australia’s assessment of the project, including the business case, cost/benefit analysis, and ranking on national significance grounds.

And the next federal government, whether Labor or Coalition, should stick to its job: no more roundabouts, overpasses or car parks, just nationally significant infrastructure funded in an even-handed way.

Marion Terrill

Transport and Cities Program Director
Marion is a leading transport and cities expert with a long history in public policy. She has worked on tax policy for the federal Treasury, and led the design and development of the MyGov account. She has provided expert analysis and advice on labour market policy for the Federal Government, the Business Council of Australia, and at the Australian National University.

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