$4.7 Billion Nation Building Package

The Rudd Government today (12 December) announced a $4.7 billion nation building package to further strengthen the Australian economy in the face of the current global financial crisis.  The package aims to assist Australian businesses through infrastructure investments in road, rail, and education, as well as significant tax changes. The Government anticipates that the largest economic effects of this package will be in 2009–10.  The Government anticipates the package will help increase GDP by ¼ to ½ of a percent, and assist in creating up to 32,000 jobs.

Today’s package follows from earlier announcements, including the $10.4 billion Economic Security Strategy, the $6.2 billion New Car Plan, the $300 million local infrastructure funding boost, and the $15.1 billion COAG package.

The Government has indicated it will make further announcements about nation building projects, funded from the Building Australia Fund, and subject to the Infrastructure Australia priority list, early next year.

The full text of today’s announcement can be accessed here.

Key infrastructure elements:

  • Inject $1.2 billion in new funds into the Australian Rail Track Corporation.
  • Bring forward $711 million in road spending to this financial year and next and more than double funding for the Black Spots program.
  • Invest $1.6 billion in critical university and TAFE infrastructure.

Tax changes:

  • A 10 per cent temporary investment allowance to encourage capital investment by Australian businesses.
  • A 20 per cent cut in the next quarterly pay-as-you-go (PAYG) tax instalment for 1.3 million small businesses.

Over the next two years, the Rudd Government has announced it will invest $1.2 billion into the Australian Rail Track Corporation (ARTC) in 17 projects to improve the reliability and competitiveness of the nation’s rail freight network.

$580 million of today’s announcement will be used to expand capacity along the rail corridors connecting Hunter Valley coal mines to the Port of Newcastle.  This $1 billion project will more than double the amount of coal being transported to export markets from 97 to 200 million tonnes a year.

Other Rail projects funded today include:

  • $55.8 million for Queensland border to Acacia Ridge track upgrade.
  • $45.1 million for Sydney to Brisbane line – new, extended and upgraded loops.
  • $29.7 million for Melbourne to Junee line – passing lanes.
  • $45 million for Seymour to Wodonga track upgrade.
  • $91.5 million for Cootamundra to Parkes track upgrade.
  • $105.7 million for Western Victoria track upgrade.
  • $50 million for Wodonga Bypass duplication.
  • $42 million for Cootamundra to Crystal Brook line – new and extended loops.
  • $76 million for Melbourne to Adelaide line – extended loops.
  • $23 million Adelaide to Kalgoorlie line – new and extended loops.
  • $45 million towards the $90 million Advanced Train Management System (ATMS) trial set to bring train management into the digital age.

The Rudd Government will bring forward $711 million in roads spending for this financial year to accelerate the commencement of 14 road projects.

Today’s package will also more than double  investment this financial year in the Government’s Black Spots program from $50 million to $110 million.

Other road construction projects bought forward by this package include:

  • The NSW Hume Highway – Woomargama Bypass.
  • The NSW Hume Highway – Tarcutta Bypass.
  • NSW Pacific Highway – Bulahdelah Bypass.
  • NSW Pacific Highway – Sexton’s Hill, Banora Point.
  • QLD Ipswich Motorway – Dinmore to Goodna.
  • QLD Pacific Motorway – Springwood South to Daisy Hill.
  • QLD Bruce Highway – Douglas Arterial.
  • VIC Western Ring Road Upgrade.
  • VIC Goulburn Valley Highway – Nagambie Bypass.
  • VIC Western Highway – Anthony’s Cutting.
  • VIC Princes Highway – Traralgon to Sale.
  • WA Mandurah Entrance Road.
  • SA Northern Expressway.
  • TAS Midland Highway – Brighton Bypass.

The Government will also set aside $195 million for investment in agricultural and social infrastructure to develop irrigated agricultural land around Kununurra Western Australia following assessment of the projects by the State and Federal Governments.


The Government will fast track the spending of $580 million into 11 projects focussed on strengthening research facilities at Australian universities. These will be funded through the Education Investment Fund.

Projects include:

  • Design Hub at RMIT University: $28.6 million over 3 years.
  • The Centre for Obesity, Diabetes and Cardiovascular Disease, University of Sydney: $95 million over 4 years.
  • Energy Technologies Building: $75 million over 3 years.
  • Institute for Photonics and Advanced Sensing at the University of Adelaide: $28.8 million over 3 years.
  • New Horizons Centre at Monash University: $89.9 million over 5 years.
  • Macquarie University Hearing Hub: $40 million over 3 years.
  • Materials and Minerals Science Learning and Research Hub at the University of Adelaide: $40 million over 4 years.
  • The Smart Infrastructure Facility at the University of Wollongong: $35 million over four years.
  • World-Class Veterinary Science Facilities – the University of Queensland School of Veterinary Science at Gatton Campus: $47.2 million over 4 years.
  • The Peter Doherty Institute for Infection and Immunity at the University of Melbourne: $90 million over five years.
  • The International Microsimulation Centre at the University of Canberra: $11.0 million over four years.

The Government will also fund a one-off $500 million investment to target capital expenditure towards the development of teaching and learning spaces in Australia’s universities. This funding will be delivered through the Teaching and Learning Capital Fund for Higher Education.

Additionally, the package also delivers a $500 million injection into public skills and training infrastructure through The Teaching and Learning Capital Fund for Vocational Education and Training.


Investment Allowance:

The Government will invest $1.6 billion in a 10 per cent temporary investment allowance – provided as an additional tax deduction – which will encourage capital investment by Australian businesses. The allowance will be equal to 10 per cent of the cost of an eligible asset.

The investment allowance will be available for new assets which are acquired, held under a contract or constructed after today and before 30 June 2009. These assets need to be installed and ready for use by June 2010 in order for the investment allowance to be claimed.

Pay As You Go Instalments Reduction Measure:

The package will cut the next quarterly pay-as-you-go (PAYG) instalment by 20 per cent, anticipated to effect 1.3 million small businesses. This reduction in the February 2009 instalment will provide immediate and much-needed cash flow relief to small businesses and aims to encourage small business confidence.