Onward to Auslink: Commonwealth Highway Funding Schemes

‘Informal’ Commonwealth Funding: Pre-National Highways
Prior to 1974, Commonwealth road funding was haphazard. The Commonwealth would make available funds for State governments to construct major road projects as it saw fit. These roads tended to be major urban freeway projects, but due to the lack of any formal methodology for the allocation of funding, there was no clear strategic direction. This in turn led to an alarming gap in the funding of transportation infrastructure and a relative deterioration in the quality of freight and commuter transport in Australia compared to other developed Western nations.

1974: Whitlam’s National Roads Act
Gough Whitlam’s (Labor) government changed a great many things during its three years in power. The allocation of Commonwealth road funding was no exception. In 1974, the National Roads Act came into force thus defining the shape and nature of Commonwealth road funding for the next 20 years. This Act created the National Highway scheme and fundamentally shifted the way road infrastructure was funded in Australia. Under s4 of this Act, the minister responsible for roads was authorised to declare road links between two state capitals, a capital and Darwin, Brisbane and Cairns and Hobart and Burnie a National Highway. This was promptly done, linking all the adjacent State capitals, Darwin, Cairns and Canberra by road under the National Roads Act.

A National Highway was a fully federally-funded road. The entire route was maintained and upgraded as required without succumbing to state prejudices and petty disputes. The Commonwealth Government would allocate a set amount of money to a state government for spending on a particular project on a National Highway route. Additionally money was allocated for the express purpose of maintaining a National Highway route. The Act authorised not only the expenditure of funds on existing National Highway roads, but on new roads that would immediately or would on completion of further sections of road become a part of the National Highway route. As such the Commonwealth become the primary source of major road project funding in the country.

What the Act succeeded in doing was creating a system of highways backed by Commonwealth funding that could be improved and thus facilitate increased trade and commerce between State capitals and the world via the port facilities in capital cities. The Act had similar aims to the United States Federal Aid Highway Acts of 1954 and 1956 which set up the US Interstate System. It should be noted however that the two acts went about achieving a national network of highways in very different ways. The US Interstate system consists of a grid of roads that are, predominantly on all-new alignments and in the overwhelming majority of cases are full-access-controlled freeways of at least four 12’ lanes in width and 10’ right shoulders. The US Interstate system sits on top of the existing US Highway system and state highway systems. Many US Interstates follow the line of former US Highway routes, but the road has been completely reconstructed to Interstate standards. The Australian National Highway system, on the other hand, is quite different in nature. The Commonwealth Government simply assumed funding for existing inter-state highway routes. While this ensured that these routes would be funded properly and not subject to inter-state political squabbling, it in no way mandated the quality of the road. The overwhelming, vast majority of all National Highways in 2004 as 1974 are two lane bitumen roads. In fact it would be preposterous to dictate full freeway standards on National Highways for the simple fact that parts of even the busiest corridor of Sydney-Melbourne are of marginal need of a four lane divided highway, let alone the entirety of Adelaide-Perth! That is to say that Australia’s sparsely spread population means that interstate freeways are not viable infrastructure projects.

What the Act failed to do was address the “last mile” part of transportation. National Highways terminated at the edge of capitals’ metropolitan areas. Funding ended at the city limits. There were no National Highway bypasses of major cities for through-freight and, more crucially, no improvements in addressing the actual delivery of freight and trade goods to ports, distribution centres etc within the boundaries of capital cities themselves. Additionally, major and developing regional freight centres, were entirely ignored, unless a National Highway happened to pass by them.

The act conferred broad powers on the Minister to fund a variety of corridors in a variety of ways. Routes that were not declared National Highways could be declared an ‘export road’ or a ‘major commercial road’ and attract Commonwealth funding to whatever degree saw fit. In practice these designations were rarely used, but were maintained through legislative alteration for the flexibility they provided.

Commonwealth road funding was mainly governed by convention and by government policy. The Act provided for the Commonwealth to fund National Highways, but it did not stipulate that they must be fully funded. Similarly the Act provided for the Commonwealth to fund Major Commercial Roads and Export Roads, but it did not stipulate that the cost of construction on maintenance on these roads should be shared with the states. The fact that both took place was merely as a result of the policy of the Whitlam government on introduction and continued as a convention for the entirety of the existence of the Act.

Another well known convention governing the administration of National Highways is that they are to be toll-free. The Act makes specific mention that States are not to levy tolls on routes declared to be National Highways, but – and this is a big but – they may do so at the consent of the Minister. Thus, so long was that Commonwealth government policy would not allow tolls on National Highways, there were no tolls on National Highways. But should that policy change – as happened when the Coalition government would not fund the entirety of the National Highway bypass of Sydney (see below) – then no legislation would prevent the levying of tolls.

1988: the Modern Legislative Scheme
In 1988 there was a restructuring of the Commonwealth legislative provisions governing transportation in Australia. The Commonwealth parliament enacted the Australian Land Transport Development Act which replaced the National Roads Act of 1974. The new Act basically placed the entirety of the National Roads Act within it, either verbatim or reworded and formatted in the then present drafting style. It affected little functionality of the National Highway System.

The Act unified the administration of the National Highway system with trunk railway lines. The Act marked the start of a significant Commonwealth influence in the railways and can be said to be the first step in arresting the steep decline of the railways throughout the country over the previous 30 years. In order to facilitate the funding of railways within existing funding schemes, State governments were authorised to spend money otherwise allocated to roads on railways. In practice this meant that deals would be pre-arranged for the funding of rail projects, but the funds would be sent to the state government as National Highway Funding.

The major changes of this Act involved the establishment of an Australian Land Transport Development Trust Fund (later renamed Reserve during a legislative tidy-up caused by a decision of the High Court). The idea of the Reserve was to ensure more of the taxes paid by road users (particularly federal excises) were returned as land transport projects. Monies paid into the reserve were for use on such projects. In practice this changed nothing and land transport infrastructure spending still lags far behind the amount of money brought in by State and Commonwealth excises, taxes and access fees.

Additionally there was some reorganisation of the 1974 Act’s ‘Export Roads’ and ‘Major Commercial Roads.’ These two definitions provided for the Commonwealth to fund additional road projects that it saw fit. In practice it was very rarely used. The 1988 Act reclassed these into ‘National Arterial Roads’ and ‘State Arterial Roads.’ Again these were rarely used until the former category formed the legislative basis for ‘Roads of National Importance’ under the Coalition government 1996-present.

The Australian Centennial Roads Development Amendment Act 1990 which came into force in 1991 made a few minor changes to the 1988 Act. The only amendment relevant into today’s context is the power conferred on the Minister to declare a certain point or stretch of road a Blackspot and direct funding for it – a ‘Federally-funded Blackspot Project’: their signs now bespeckle the landscape.

Expansion of the National Highway System: New Rural Corridors
In 1992 the Commonwealth (Labor) government took steps to address changing freight patterns and expanded the National Highway network to include a Sydney-Adelaide link and a Melbourne-Brisbane link.

The overwhelming majority of the additional National Highways were in NSW. This issue is contentious in that is invariably creates a Commonwealth-state and state-state stoush inter se over the disproportionate allocation of Commonwealths funds. The preferential treatment of Queensland had been self-evident in the original allocation of National Highways whereby Cairns was effectively considered the same as a State capital for the purposes of funding. This in turn meant that the Queensland government was freed from having to fund some 2,500km of highway. The Bruce Highway running from Brisbane to Cairns, however, was the most dangerous length of highway in the country and in desperate need of all the funding it could get – and today the Bruce Highway is a significantly safer road. It is understandable therefore that it was decided that the route from Brisbane to Cairns should be candidate for Commonwealth funding (whether its improvement should have been funded solely by the Commonwealth is another matter more open to dispute).

The situation in NSW is somewhat different. The two NSW highways added to the National Highway system in 1992, the Sturt Highway and Newell Highway do not traverse inhospitable terrain nor do they have poor horizontal or vertical alignments – in fact both highways cover large lengths of very flat terrain throughout the western regions of NSW. Both carry relatively low traffic numbers and neither will be seeing major upgrade projects in the short to medium term. So the question becomes why did the Commonwealth pick the two up? The answer can be seen at a number of levels (some of them purely political). But both routes facilitate inter-capital trade and carry increasing numbers of heavy vehicles. In the case of the Melbourne-Brisbane route, the use of federal funding to improve the road would relieve pressure on congested areas around Sydney due to freight traversing the shorter route through Central NSW over the more coastal route. While the Commonwealth assuming responsibility for these highways would have freed money in NSW for use on other projects, the Commonwealth’s funding of NSW’s F3 and F5 freeways from the late 1970s had far more profound impact insofar as freeing funds so that other transport corridors could be developed.

Today, the Central NSW city of Parkes has seen the most benefit from the expansion of the National Highway network. Situated both on the Newell Highway and the railway from Cootamundra (the main way from Sydney to Adelaide/Darwin/Perth), Parkes has established itself as one of the largest freight centres in the country.

Expansion of the National Highway System: The Urban Corridors
In 1994 the same Commonwealth government fundamentally altered the nature of the National Highway forever when they ‘joined the dots’, so to speak. For the 20 years that the National Highway system had existed, the capital cities, Cairns and Burnie were connected from one metropolitan fringe to another. Commonwealth funding did not extend into cities themselves. It had been argued that the whole premise of the National Highway system was to bring goods to cities, not through them. For that reason, not one proper freeway bypass, let alone beltway had been constructed for any capital city in the country, in sharp contrast to the United States.

Thus when the Commonwealth designated urban corridors through which the National Highway would traverse (and worse, when it decreed that Sydney and Melbourne ought be bypassed on the National Highway by freeway) many contemplated the end of the National Highway scheme as it had existed. They suggested that it fundamentally altered the purposed of national highways, from facilitating interstate trade to solving urban traffic snarls, that funding would be syphoned into urban Capital projects to the detriment of the rural roads in most need of improvement, that the government had sold out the production core of the country in the name of winning votes from white collar city-dwellers. While this sound rather melodramatic, the National Highway program did now resemble more the US Interstate system with hundreds of millions of dollars quickly allocated to the urban corridors of the three east coast capitals.

To that end the Commonwealth immediately assumed funding of the construction of the Metropolitan/Western Ring Road in Melbourne. This road bisected Australia’s largest manufacturing area that contributes a large percentage of the nation’s GDP. The road, for the extent of it as a national highway – between the Hume Freeway on the Sydney-Melbourne corridor and the Western Freeway on the Melbourne-Adelaide corridor – was complete by 1998.

In Brisbane, the Gateway Arterial constituted (along with the Ipswich Road/Motorway) the majority of the National Highway route through the city. The Gateway Arterial Road included a high bridge over the Brisbane River. This bridge was tolled with the funds being used to pay off the cost of the bridge and the road. Rather than assuming the state of Queensland’s debts with regards the Bridge, the Commonwealth opted to exclude it from the National Highway system. This rather bizarre has been rationalised as maintaining the convention that National Highways did not carry tolls. An interesting side effect to this is that due to the Queensland government controlling the river crossing and the river crossing being a bottleneck (due to the toll plaza and steep grades on the bridge), it is the Queensland government footing the cost of the duplication of this bridge now. One could easily imagine though that the Commonwealth was simply being paranoid or overly attached to their toll-free policy – the F3 in Sydney carried tolls from opening until 1988, paying back the NSW government’s costs in constructing the road, yet it was declared a National Highway in 1974.

In Sydney the National Highway ran along the newly proclaimed Cumberland Highway. This arterial road was six-laned with Commonwealth funding as a freeway bypass corridor was developed. The Westlink M7, now under construction, constitutes the majority of the National Highway bypass of Sydney, running some 40km around the metropolitan area. This project is of note because it is a Build-Own-Operate-Transfer (BOOT) project, funded to the tune of $300 million in Commonwealth money, but with the remaining $1.1 billion to be recovered by the private operator by tolling – this national highway will be tolled. Interestingly, the kafuffle over this has been relatively minor, possibly due to Sydney residents having been subjected to the imposition of tolls on all major new freeways over the past 15 years, possibly because they may see that the benefits are manifest but probably because the whole toll issue is really a storm in a teacup generated by politicians (the Mitcham-Frankston – now Eastlink – freeway in Victoria being case in point for the present). The Westlink M7 will still leave a 10km gap in the freeway; the current proposal will see this gap filled by a tunnel in the 2010 time range.

The Coalition’s Tuppence in the Road Funding Story: Roads of National Importance
A Road of National Importance is a road not funded entirely by the Commonwealth but co-funded with a state government. The development of Roads of National Importance (or RONIs) has fundamentally altered the arrangement of total Commonwealth funding of road corridors introduced with the National Roads Act in 1974. This in turn can be seen as the catalyst for the ending of the National Highway program and its replacement by Auslink.

The history of RONIs is inextricably tied to that of the Pacific Highway. The Pacific Highway between Newcastle and Brisbane traverses some of the toughest country in the state of NSW but also some of the most densely populated. It is paradoxical, in a way, that so much of the state’s population lives where the only access is by a slow and windy road, or a slow and windy railway or by sea. The Pacific Highway was finally fully bridged and sealed in 1958, but its quality was dubious at best. The NSW Department of Main Roads struggled for years just to prevent large sections of road disappearing with regular flood events1 . The road was generally unsafe, littered with sections of extremely poor superelevation and a lack of overtaking facilities. The road claimed lives – put simply it was a death trap. The deaths of 55 people in two separate coach crashes in 1989 however finally spurred politicians into action – though it took seven years before any concrete agreement was reached (with the now Coalition Commonwealth government).

Various methods of financing the improvement of the Pacific Highway were canvassed including tolling2 . Eventually, in 1996, a decision was reached between the Commonwealth and NSW governments to fund the duplication of the road out of consolidated revenue at a ratio 1/3 to 2/3 with the aim to completely 3-lane the highway by 2005 and completely duplicate the route by 20103 . Thus the Pacific Highway became the first Road of National Importance.

Legislatively, the Commonwealth funding for the Pacific Highway was arranged by the declaration of the route a “National Arterial Road” under the Australian Land Transport Development Act 1988. This permitted the Commonwealth to fund a road as it saw fit. As more roads were declared RONIs over the next five years, this designation of road became quite important in the overall transport funding scheme.

For the Pacific Highway, the Commonwealth and NSW governments arranged which projects would attract which funding on an annual/project-wise basis. The size and scope of the Pacific Highway upgrade made it unique from future RONI projects in that in the first instance planning was undertaken for sections of the route to be upgraded. This was fully funded by the NSW government. Once the project route was determined and the environmental impact report initiated, arrangements for funding would be made and the upgrade constructed. Thus the Pacific Highway consisted of well over 20 discrete projects. For other RONIs, planning and construction was generally undertaken as a single project, and while the upgrade may consist of numerous discrete stages, it was considered unitary on the whole.

The popularity of the RONI program with state governments and road authorities is undoubted. Obviously, when the Commonwealth is offering to fund projects that can be demonstrated to be in the national interest, one and all jump up to get some long-stalled and overdue upgrades going. The program has proliferated with RONIs popping up on many major, but non-National Highway routes around Australia such at the Great Western Highway between Sydney and the Blue Mountains and the Calder Highway between Melbourne and Bendigo.

Criticisms of the RONI program stem from two points of view. Firstly that they devalue the National Highway program and detract funding for other purposes that are not strictly of such national importance and secondly that the establishment of a Road of National Importance is left to the discretion of the federal Minister for Roads and thus makes it opens to rorting (“National Party slush funds” as the Australia Labor Party would put it) and in any case abdicates the Commonwealth’s responsibility to fund major roads and facilitate interstate freight movement.

To present the government’s opinion on the first criticism, they would argue that the National Highway program has largely achieved its aims. The Commonwealth Department of Transport and Regional Services (DoTaRS) notes, for example, that the entirety of the National Highway system was sealed by December 1989. Improvements on all corridors have dramatically increased safety and cut travel times. Major deviations have been constructed and road freight has boomed in the past 30 years. On the other hand, detractors will note the Commonwealth has still failed to complete the duplication of the Hume Highway – the National Highway corridor between Sydney and Melbourne – despite originally promising in 1982 to have it complete by 1988.

The second criticism is far more political. It represents, in a way, the difference between the conservative Coalition’s view on the Commonwealth’s role in transport and the Labor party’s view on that role. The Labor party in creating the National Highway network created a system independent of state funding issues that was fully funded and thus fully the responsibility of the Commonwealth. The Coalition have emphasised more and more the notion of co-funding responsibility where the Commonwealth and states or the Commonwealth and local government combine to complete projects as, where and when required. The Coalition have, instead of assuming responsibility for more specific routes, decided to fund sections of routes on a case-by-case basis, thus spreading funding around to more roads that, while almost certainly needing the funded upgrades, make less of an overall improvement on the route because they are only on limited sections of the road and failed to really remove the funding burden from the states as much as they bring forward projects that would otherwise take longer to budget for. The issue of which roads become RONIs being politically influenced is, however, probably just a Labor party beat-up with no obvious examples of pork-barrelling taking place. 4

The Centralism Debate and Road Funding: Roads to Recovery
In 2000, the Commonwealth government announced the Roads to Recovery program. This was a means of directing Commonwealth road funding straight to local governments who maintain, both in urban areas an in the countryside, a great many of arterial thoroughfares (that being those not under the control of state road authorities). The program was to run for five years and provided in the order of $200 million/year. As with “Federally-Funded Blackspot” projects the requisite signage advising that the road was upgraded as a “Road to Recovery” now bespeckle the landscape.

Roads to Recovery are in interesting concept because the Commonwealth is funding roads right down at the local level bypassing states. This in turn begs the question as to why the Commonwealth is funding roads at such a low level – it is beyond the scope of the federal government to do this. Politically Roads to Recovery serve the purpose of promoting the Commonwealth government to the ordinary person on the street that sees the signs and the improvements in their local road. However, councils around Australia routinely maintain some heavily trafficked routes. DoTaRS points out, for example, that Roads to Recovery funding was used by Hurstville City Council in Sydney to widen the crossing of Belmore Road over the Illawarra railway. Belmore Road is a major arterial access road to Sydney’s M5 Motorway – not only a major commuting route but a major freight route constituting access from the National Highway to Port Botany and Sydney Airport. Nonetheless, it is an obvious inference to draw that the Commonwealth was unhappy with the way states were funding their roads (amongst other things) and thus sidelined them from the picture. By removing the total dependence of local governments on their state government masters, the Commonwealth took yet another step in the process of eroding the rights of the states, a process ongoing since Federation itself.

Roads to Recovery are funded outside the bounds of the Australian Land Transport Development Act. The Roads to Recovery Act 2000 governs the granting of funds under the program. The act is incredibly simple – funding recipients are gazetted and then payments are made. The act ensures that grants are used on roads and that unused funds are returned to the Commonwealth.

The Roads to Recovery program was a one-off five year event that commenced in the 2000-2001 financial year and finished in the 2004-2005 year. The Commonwealth then decided to continue to program, but it is to be rolled up with all other transport funding in the Auslink program to commence in the 2005-2006 year.

A new Funding Regime: Background to Auslink
So from the beginning of the 2001-2002 financial year there were two separate acts authorising funding to two levels of government to fully or partially pay for any one of a National Highway, Road of National Importance, Road to Recovery or Federally-funded Blackspot. The system of Commonwealth road funding was not a lot simpler, clearer, or defined than it was prior to 1974!

In the same financial year as this system of road funding reached its climax, the Commonwealth government set a date for the release of a government Greenpaper (preliminary policy document) into land transport – a preliminary policy document to be open to public comment on the future direction of land transport in Australia. This document was released in November 2002 to further public comment. It was, at that stage, intended that the Auslink funding system come into effect from the beginning of the 2004-2005 financial. The formal policy document, the Auslink whitepaper was finally delivered in June 2004. This necessitated the delay in the commencement of Auslink funding to the beginning of the 2005-2006 financial year.

Auslink encompasses all existing Commonwealth land transport funding systems under one administration and one act. The Roads to Recovery and Federally-funded Blackspot funding scheme are translated into Auslink Roads to Recovery and Auslink Blackspot Projects respectively almost in their entirety – Auslink has little effect on these areas of road funding other than unifying Roads to Recovery with the other Commonwelath funding schemes and providing for its continuation as a rolling five year program, not a one-off five year scheme. National Highways and Roads of National Importance, on the other hand are affected greatly: they are abolished and replaced with the concept of the Auslink National Link. A National Link is an interstate or freight strategic route. This means that all major ports, airports and freight distribution centres are connected to the Auslink National Network of National Links – the first time freight destinations (‘inter-modal transfer facilities’) are specifically targeted by Commonwealth road funding, addressing the “last mile” funding gap that existed with the National Highway system. Auslink also unifies the administration of railways by declaring major interstate and port-linked railways to be National Links. As such railways are treated identically to roads for the first time. Finally there are three other categories of funding under Auslink. These are – AusLink Transport Development and Innovation Projects, Land Transport Research Entities and AusLink Strategic Regional Projects. Transport Development and Innovation Projects permit Commonwealth funding of transport-related studies. Transport Research Entities refers to the two co-funded independent Australian road agencies, the Australian Road Research Board (now ARRB TR Ltd) and Austroads (formerly the National Association of Australian State Road Authorities) and provides for their funding. Strategic Regional Projects provide much the same function as State Arterial Roads under the present Land Transport Development Act by permitting the Minister to provide Commonwealth funding to other land transport projects (not however limited to road projects) as deemed appropriate.

This abolition of National Highways has already, before it has even taken place, led to change at one level. No alphanumeric route signage in New South Wales being erected (and generally then coverplated) in preparation for the transition of the NSW route numbering system to the system in use now in Victoria, South Australia, Tasmania and parts of the Northern Territory and Queensland, uses the National Highway shield. This is in contrast to the other states that are required to retain the National Highway shield around their alphanumeric routes. NSW is seemingly betting that the Auslink National Links that constitute the existing National Highway system will not have to use a National Highway shield. This is a reasonable assumption, but it possible it could be entirely wrong – the National Highway shield denotes to motorists the major interstate corridors that are the main route between two capital cities, not just advertise the Commonwealth’s funding of the road. As such the National Highway shield performs an additional function which in turn means it may be required to be retained.

Auslink’s Legislative Foundation: The Auslink Bill
At the time of writing, the Auslink (National Land Transport) Bill 2004 was at the second reading speech stage in both chambers of Parliament. No amendments had yet been proposed. The Government was expecting its passage uninterrupted for the new financial year (2005-2006).

After the Bill was passed by the House of Representatives, the Senate (by majority of Labor, the minor parties and the independent Senators), on 10 February 2005 referred the Bill to a committee to take submissions on potential amendments. This committee is due to report back to the Senate on 12 May 2005. Should the Senate resolve to return amendments to the House of Representatives, the government has the option of accepting the amendments and having the bill passed in time for operation at the beginning of the financial year: 1 July 2005 or ignoring the situation. Should the government choose the latter, it can resubmit the Bill to the Senate after the winter recess when it will have majority in the Senate and can pass the Bill unamended. The net affect however is minimal as the government can use the provisions under the existing Land Transport Development Act 1988 to fund projects in the interim – either those in existence pre-Auslink, or it can, should the Senate pass it, use the amended act to be used as the transition from the existing funding methods to Auslink (see Implementing Auslink).

The Bill is drafted in line with modern plain English drafting styles – it is easy for the layman to follow. The Bill has been drafted such that it is divided up into Parts, including one part for the administration of each of the six major facets of Auslink (National Projects on the National Network (pt 3), Transport Development and Innovation Projects (pt 4), funding for Transport Research Entities (pt 5), Strategic Regional Projects (pt 6), Black Spot Projects (pt 7) and Roads to Recovery (pt 8)). A number of clauses are essentially repeated for a number of parts in the act. This analysis will generally reference clauses in Part 3 of the Bill which refers to the major National Network roads, but the principles of the major clauses may apply to Pts 7 and 8 particularly.

The Auslink System of Funding
Auslink consists of a rolling system of five-year funding commitments similar to the Roads to Recovery program. The Commonwealth will work with state and local governments to ascertain which routes will be funded and which projects on these routes will be funded. This method of funding is similar to that employed under the Roads to Recovery scheme, though on a vastly larger scale incorporating all three tiers of government and on a rotating basis.

Auslink contemplates that the Minister will invite submissions on what projects it will fund (cl 12). The Minister is given broad powers to issue this invitation to whomever he pleases and on the terms and by the means he sees fit. One of the factors the Minister should contemplate when deciding whether a project should be funded is the ‘corridor strategy’ (cl 11(b)). This is a non-statutory instrument (though once Auslink comes into force, they may become formalised in regulation) that the present Commonwealth government has placed great emphasis on for the expedient improvement of a transport corridor with the most efficient capital outlay. Corridor strategies already exist for most existing National Highway corridors 5 and have also been developed for the Melbourne-Sydney and Sydney-Brisbane rail corridors along with major existing RONIs (such as the Pacific and Calder Highways). Such strategies can be transplanted into the Auslink funding arrangement.

State governments have been required to sign Auslink bilateral funding agreements. The Commonwealth has linked these agreements to the acceptance of its “National Code of Conduct for the Construction Industry”. This has caused somewhat of a ruckus. Commonwealth Transport Minister, Deputy Prime Minister and leader of the National Party, John Anderson has stated “[w]e are determined to spend our $12.5 billion in AusLink funding on bitumen, concrete and steel, not on lining the pockets of unions that have no regard for the rule of law.6” This of course is highly inflammatory to Labor-controlled states (which happens to be all of them). Nonetheless, the financial position of all states in Australia is such that they haven’t a choice but to accept it. The bilateral funding agreement signed by each state is little more and a memorandum of understanding as to the arrangements for funding in Auslink and an agreement to work with the Commonwealth government to secure funding under it. The Auslink Bill, however, when enacted will require individual funding agreements on a project-by-project basis.

Project-based funding agreements are, it would seem, no different to agreements reached for the funding of RONIs. These agreements are signed between the Commonwealth and the other stakeholder (a state government or local council) they are, as per the Auslink Bill, “a written agreement between the Commonwealth and an eligible funding recipient relating to the provision of Commonwealth funding under that Part for a particular project.” (cl 4(1)). These funding agreements, therefore, outline the breakdown of funding between the Commonwealth and the other party for the project. Where no funding agreement is in place, the Minister may allocate (and revoke) funding as he sees fit (cl 17). This is similar to the situation in place for the past 30 years to provide funding for National Highways.

The position of National Highways under Auslink is perhaps in doubt. The Commonwealth government has indicated that it will continue to fully fund what is presently the National Highway network. However, given that Auslink and all the rhetoric surrounding it place great emphasis on co-funding and funding agreements and the like, plus given the Labor party has criticised the policy not requiring the Commonwealth government to fund the routes7, despite the fact the Commonwealth has never been required to fund fully National Highways, it gives rise to the implication that perhaps the Commonwealth might abrogate its “responsibility” to fully fund the backbone of the national transport system. The media latched onto this possibility when speculation that the long-fabled extension of the F3 Sydney-Newcastle Freeway to Branxton would blow out in cost from $253 million to upwards of $400 million and leave the NSW government to make up the difference8. Such a cost increase has never (or, depending on your point of view, yet) been confirmed, however. Nor has the Commonwealth indicated that it would not fund the whole project, despite a cost blow out.

Cannibalising the Land Transport Development Act: Implementation of Auslink
In order to implement the Auslink (National Land Transport) Bill as an Act once passed, the AusLink (National Land Transport—Consequential and Transitional Provisions) Bill 2004 has been introduced simultaneously. This Bill was designed to alter the existing Land Transport Development Act to become an interim measure that permitted the Commonwealth to continue to fund existing projects. All sections relating to the approval of projects are repealed. Projects that will not have their funding rolled into Auslink are stated to continue regardless and a specific section preventing the approval of new projects is added. The Land Transport Development Reserve is abolished. Payments are made simply out of consolidated revenue.

The AusLink (National Land Transport—Consequential and Transitional Provisions) Bill specifically sets aside the total amount of road funding available for the year (this is normally set out in the annual Appropriation Acts) – $1,371,489,000. It then specifically states that until such time as the Auslink Act comes into force, payments are to be made as per the Land Transport Development Act but under the requirements of the Auslink (National Land Transport) Act once it comes into force.

It should be noted that this transitional bill specifically relates to the present 2004-2005 financial year. The provisions are for the allocation of the funding amount provided by the Commonwealth for the year ending June 30 2005. Should the Commonwealth Parliament fail to pass this bill and the Auslink Bill itself by the end of the financial year, this bill will need to be amended to refer to the 2005-2006 financial year and the funding amount provided for it. Baring significant alterations, that same process will take place for the implementation of Auslink in the 2005-2006 financial year as the 2004-2005 year in which it was intended to.

But is it a step in the wrong direction? Criticisms of Auslink
There are two main areas of criticism of the Auslink system other than it simply doesn’t provide enough money9. These are firstly that Auslink contemplates such a large number of ways of funding roads that it spreads money too thinly and ignores National Highways and secondly that Auslink is just another way for the government to create National Party slush funds.

Starting with the second issue, this is likely to be no more than a myth circulated by the Labor Party10. The theory goes that whenever a Coalition government gives itself discretion to do or fund things, that they’re inclined to throw money away at silly projects in National Party-held electorates in order to keep the Liberal’s lesser [and apparently childish?] partners placated thus keeping them voting on the Party Line on contentious legislation11 . Any act that permits a Minister wide discretionary power is open to corruption. This act is no different. This criticism is a non-issue.

The abolition of specifically fully-funded National Highways is really a manifestation of the ideological differences between Labor and the Conservative parties in this country. On the one hand you have the more centralist view that the Commonwealth should fund roads of national import and nothing else. On the other you have the view that the Commonwealth’s role is to make improvements wherever they are needed. In reality it is rather easy to demonstrate that major interstate highways are more deserving of Commonwealth funding than local roads (even if they do happen to be major arterials that cross major railways). It is thus valid to argue that the Commonwealth’s direction of funding is misguided in this respect. On the other hand it is hard to justify why the Commonwealth government should not fund the Pacific Highway but rather the New England Highway between Sydney and Brisbane. While these all remain moot points, they are old points. They relate to the introduction of funding schemes at least five years ago. The topical issue is more the introduction of additional urban funding links to connect ports and freight transfer facilities to existing Commonwealth funded roads. These routes are predominantly urban and in many cases freeways. They will require large amounts money invested in them due to their rapidly increasing traffic volumes. They will therefore have the potential to drain the Commonwealth infrastructure budget to the point where interstate highways suffer. It remains to be seen how the Commonwealth responds to this challenge. If it cannot increase the amount of real funding available for road and rail infrastructure then the entire Auslink program will be in vain.

Something old, something new, nothing blue: A summary
Undoubtedly Auslink is a product of the various methods of highway funding employed by the Commonwealth over time. However it is mainly an adoption of the methods of funding employed by Coalition during its term in office on a larger and more permanent scale. It thus marks the end of guaranteed Commonwealth funding of major interstate highways. Whilst the Commonwealth asserts that it will continue to fund them, over time this may break down. The system of nominating projects and provisioning their funding is not new but it is now being applied to all major projects in the country. For that reason, above any other, Auslink represents a new chapter in the development of road (and rail) infrastructure in Australia. Auslink comes at a very crucial time in Australia in terms of being able to provide sufficient infrastructure to maintain economic growth. If the system is mis-targeted or becomes corrupt or bogged down in procedure then the country will strangle itself. There is, therefore, no policy of such importance in political debate in this country at this time.

Written by David Isaacs.
All opinions expressed in this article are those of the author.

1. For example at the notorious section of road at Clybucca Flat, north of Kempsey, the DMR “lost” the road three times in ten years. This led to experimentation with road beds and concrete pavements – see the RTA’s oral history section on Clybucca Flat and Ulmarra (amongst other developments in concrete road construction) at http://www.rta.nsw.gov.au/environment/downloads/heritrtaorcondev_dl1.html. This has led to the use of well settled, heavily compacted embankments and deep-set concrete carriageways on sections of the route that traverse floodplains today.
2. This issue has recently been raised again, see, for example “Tolls to tackle Pacific Highway bottlenecks”, The Australian, March 21 2005 (http://www.theaustralian.news.com.au/common/story_page/0,5744,12640340%255E28737,00.html); “Anderson backs Pacific Highway toll”, Sydney Morning Herald, March 20 2005 (http://www.smh.com.au/news/Breaking-News/Anderson-backs-Pacific-Highway-toll/2005/03/20/1111253871091.html)
3. This has no chance of being met. The tolling articles (above) mention dates of 2020 for the completion of the route and that date is ballooning out of control constantly.
4. One potential example, though it is more of a political point-scoring issue than of pork-barrelling, is over the Scoresby/Mitcham-Frankston/Eastlink freeway in Melbourne whereby the Commonwealth would fund the freeway as a RONI (to the tune of $400 million and more) only if the Victorian government would not toll the route, something that would cost the Victorian government more than accepting the Commonwealth’s funding, thus making the Victorian (Labor) government look bad in tolling the route despite the Commonwealth’s offer.
5. Eg provision of all dual carriageway on the Sydney-Melbourne road corridor
6. Quoted from “Fast-tracked Pacific will save operators money: Anderson ”, Supply Chain Review, March 31 2005 , (http://www.supplychainreview.com.au/index.cfm?li=displaystory&StoryID=22085)
7. See, for example, the Opposition (Labor) Transport spokesman, Martin Ferguson’s speech to the 2004 National Local Roads Congress, July 12 2004 (http://www.alga.asn.au/newsRoom/speeches/MF20040712.php)
8. “Funding shortfall prompts Mexican standoff: Fitzgibbon”, The Maitland Mercury, March 1 2005 (available at http://www.f3linkroad.com/cgi-bin/news/print.pl?article=105)
9. Something that is way beyond the scope of this article. The issue of infrastructure development in Australia is contentious, highly political and despite it all never gets anywhere.
10. See, for example ‘Regional road funds go missing’ Tenterfield Star April 28 2005 <  http://tenterfield.yourguide.com.au/detail.asp?class=news&subclass=local&category=general%20news&story_id=389622&y=2005&m=4 >
11. The full privatisation of Telstra is a contemporary example which is yet to be settled between the Liberal and National parties with sufficient “guarantees”/additional unrelated funding for various Nation electorates.

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