Media Release

Labor's failure to take tough decisions on spending is harming Australia's long term interests

Friday 20th November 2009

A resounding OECD attack on the Rudd Government’s poor management of infrastructure spending shows again Kevin Rudd’s refusal to be upfront and take tough decisions, which is acting against Australia’s long term interests, Acting Shadow Minister for Infrastructure, Scott Morrison has warned.

“The OECD warning is the latest in a series of warnings and must now lead to changes in the way Labor handles precious taxpayers’ money,” Mr Morrison said.

“The report has highlighted international concern that Labor’s spending on infrastructure has not been subjected to adequate scrutiny,” he said.

“The OECD call for infrastructure proposals to be submitted ‘more systematically to a rigorous and transparent cost-benefit analysis’ again exposed basic flaws in Labor’s approach.

“Labor’s lazy approach to infrastructure spending will cost Australians dearly over the long term.

“Failure to invest in economic infrastructure and on the right projects based on rigorous assessment and cost benefit analysis, will make it even harder to pay off Kevin Rudd and Labor’s debt.

“Once again overnight we are seeing – and the world is seeing – that Labor’s reckless and lazy spending means they are wasting a once in a generation opportunity created by the economic legacy of the Howard Government to invest wisely in our nation’s economic infrastructure for future prosperity,” Mr Morrison said.

The international warning to Australia today is not an isolated call. Mr Morrison said that within the past month:

• The Productivity Commission had exposed Labor’s failure to meet its own benchmarks for transparency and rigorous cost analysis on its infrastructure spending

• The Business Council of Australia had delivered a vote of no confidence, revealing barely 14% or one in seven dollars of infrastructure spending had gone into productive economic infrastructure; and

• Australia’s Reserve Bank had repeatedly warned about pressure on interest rates and the supply bottlenecks in our economy and the need for money to be well spent.

Mr Morrison said the repeated failure to undertake and publish rigorous cost-benefit analyses had created a deep suspicion that Labor was pursuing political and not economic objectives.

“A blow out of more than $1 billion in the Julia Gillard memorial school hall program highlighted the heavy costs to all Australians from Labor’s waste,” he said.

“The Productivity Commission made it clear that infrastructure investments that are not well allocated can have a double cost – with future generations having lower incomes than necessary while still needing to service the debt incurred in financing these works.

“Higher interest rates, fewer taxpayer dollars to go around and heavier interest payments on Labor’s debt are all combining to spoil the future for generations that deserve optimal economic growth.

“Labor must now commit, fully and publicly, to transparency in its infrastructure spending. This will force a realignment of priorities back into the most deserving economic investments for our future and help to rein in Labor’s waste and spending excesses.

“This OECD call is an amber, if not red light, on Labor’s handling of infrastructure, and it must be heeded,” Mr Morrison said.