The Federal Government will pump $300 million into local government infrastructure projects, providing a boost for small and medium construction and engineering contractors.
The Federal Government will pump $300 million into local government infrastructure projects, providing a boost for small and medium construction and engineering contractors.
Prime Minister Kevin Rudd will announce the funding plans today, which will provide payment for public services such as parks and community halls.
The $300 million will be delivered to local officials by the end of the financial year. Over 400 local government officials are at Parliament House today to hear Rudd announce the plans.
Jim Barrett, Australian Industry Group associate director of construction and infrastructure, says the funding will help stimulate small to medium size construction firms.
“The obvious impact is that $300 million of funding into construction and public works, with the caveat it would be spent in the next few months – that’s got to be good for the industry. It will probably have less effect on major construction companies, but more on the medium and smaller size contractors who do a lot of work for local governments.
“It will certainly have a stimulatory effect. Any attempt to stimulate the economy and get things moving at the moment is a good thing.”
Local government infrastructure has been struggling, as federal revenue for local projects has dropped from 1.2% to 0.6% in the last 10 years. The lack of funds means local governments defer up to $800 million in projects each year.
The payments follow the Government’s $10.4 billion stimulus package, which along with the $6.2 car industry plan, has slashed the budget surplus to a mere $5.4 billion.
Related stories:
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
