THE federal government has defended billions of dollars worth of infrastructure cost-cutting despite promising a comprehensive nation building plan.
The coalition has forecast $4.5 billion of savings beyond the budget forward estimates from cancelled transport-related projects and an overhaul of a $952 million regional development fund, a Senate hearing was told on Monday.
Asked how individual projects would be paid for, assistant treasurer Arthur Sinodinos told the committee "it will be covered by revenue and there will still be some borrowing, I imagine, at least for some years.
"But the point is, you'll see a very comprehensive and very good infrastructure plan put together by very good group of people."
Labor senators bombarded senior infrastructure department staff with questions about the coalition's scrapping of the Regional Development Australia Fund, which had made grants of up to $2 million available to individual local governments.
Introduced in phases over seven years, Labor approved 910 grants in the latest round but under coalition changes each approval will be reviewed because none of the projects have been "contracted".
"We have provided advice to the government in relation to the status of the projects and the government is now considering the matter in the context of its budget processes," department secretary Mike Mrdak told the committee in Canberra.
Labor senator Jan McLucas highlighted a "climate change mitigation" project in the Torres Strait, which was approved for $5 million Commonwealth funding but will be reviewed because the contracts to begin work had not been signed.
"There has been a sense of urgency for about 15 years on this ... to provide protection against inundation of floods, usually of seawater, mainly during the February tides," Senator McLucas said.
Mr Mrdak said there was a "little bit of a grey area" until the government made a call on the unfunded projects.
However, unsuccessful projects can reapply to the coalition's alternate National Stronger Regions Fund, which begins in 2015.
It's funded at $200 million a year and requires a dollar-for-dollar match from proponents.
"We are looking at national projects which effect all parts of the country and we've got to make those balanced considerations," Senator Sinodinos said.
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