NSW generates more than 30% of Australia’s GDP, but Labor has given it just 10% of the infrastructure funding

In what kind of weird world does an infrastructure “pipeline” provided by the federal government direct nearly $2.6 billion to Victoria, $2.5 billion to the Northern Territory, nearly $1.5 billion to Queensland — and just $1 billion to NSW?

NSW generates more than 30% of the nation’s GDP, but the Albanese government has decided it should get just 10% of the infrastructure funding, it unveiled yesterday.

It’s great news for the Victorian government, which is weeks out from an election. Not such good news for the Perrottet government, which goes to the polls in March.

Why did NSW miss out? According to federal Infrastructure Minister Catherine King, “we had a slightly different relationship in opposition with the Victorians than we did with New South Wales, so we didn’t really have a lot of projects on the table from opposition from them”.

By that telling, Labor in opposition came to the NSW government looking for projects to fund but got turned away, while Labor governments in Melbourne, Brisbane and Darwin had a better “relationship” and so got the cash. That’ll learn ’em.

That’s not to say Labor is turning its back on projects beloved by the Coalition. Why is the NT getting so much money, especially compared to NSW? During the 2022 election campaign, in an effort to win the seat of Solomon, former deputy PM Barnaby Joyce announced $1.5 billion to develop new port facilities at Middle Arm in Darwin for gas exporters, saying “Australians must embrace the fact that it is our resources sector that pays for the services and opportunities we all enjoy, and without coal and gas and iron ore we would be weaker and poorer”.

Labor, worried about Solomon, immediately matched Joyce’s commitment. So now taxpayers are forking out $1.5 billion for some pork promised by Joyce to his fossil fuel industry donors during the election.

There’s no business case for the project — surprise! — because it’s not even fully clear what the project is. All we know is that King is now trying to claim it’s not about fossil fuel exports. She described the project as “planned equity to support the construction of common user marine infrastructure within the Middle Arm Sustainable Development Precinct, providing a pathway to a decarbonised economy by helping emerging clean energy industries”.

This isn’t a few hundred million for some dodgy car parks — it’s $1.5 billion, more than all the money given to NSW, being spent on something that’s not quite clear, for benefits that haven’t been identified, purely because Labor felt it needed to match the Coalition’s pork-barrelling. As it turned out, it didn’t — the CLP vote collapsed in May, handing Labor’s Luke Gosling a 6.2% 2PP swing.

So this is the way the government will run infrastructure policy: it all depends on the “relationship” you have with Labor, and projects without any clear benefit will get funded if they’re in the right seat.

For a party that promised to clean up infrastructure funding allocation, end pork-barrelling and put sense back into infrastructure planning and delivery, it’s a shoddy start to spending, especially after King moved quickly to detoxify the board of Infrastructure Australia and review the $20 billion coal export subsidy: the inland rail disaster.

This article was first published by Crikey.