Key infrastructure projects could be axed

·2-min read

Infrastructure projects could be axed as the federal government looks to save money and ease pressure on the construction industry.

Infrastructure Minister Catherine King delivered a speech to the Infrastructure Partnerships Australia conference on Friday about the need to streamline Commonwealth spending in the sector.

The minister wants investment to focus on major "high priority nation building" projects - such as the High Speed Rail and Western Sydney Airport - and smaller state projects deprioritised, according to reports in The Australian.

Shadow Infrastructure Minister Bridget McKenzie welcomed reports of a strategic approach to federal infrastructure investment, but warned that "the devil will be in the detail" when it came to prioritising some projects over others.

"Depending on the methodology used, smaller regional projects can be game changers in terms of impact," she told AAP.

"Investing in infrastructure across the economy is an essential way to increase national productivity."

Ms McKenzie, who had not had a chance to hear the minister's speech, also said state governments were partly responsible for driving up costs and blowing out timelines.

"I wish the new minister all success in brokering with the states a more efficient infrastructure pipeline that better apportions costs, and improves delivery," Ms McKenzie said.

In the Coalition's 2022 budget handed down in May, the former government committed to $17.9 billion over ten years towards new infrastructure projects

Speaking to reporters about the Labor government's first budget on Wednesday, Treasurer Jim Chalmers foreshadowed the possibility of cutting back on planned infrastructure spending to save money and take pressure off private construction.

"I think there is a broad understanding that it is difficult right now, when you consider the infrastructure pipeline across all three levels of government plus the private sector," he said.

"There are obvious pressures on timetables and costs. And I think it would be strange to ignore that."

He said there was a conversation underway between all levels of government about "how we deliver those infrastructure commitments in a way that gets value for money, and on realistic timeframes".

The construction industry has been under pressure from soaring materials costs, a competitive labour market and other challenges.