One of the country’s leading economists is skeptical about the overall cost-benefits of the inland rail route set to come through the Border.
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Australian Institute of Company Directors chief economist Stephen Walters was in Albury on Friday to address the Albury Wodonga leaders’ lunch about the 2017-18 federal budget and economic trends around the country and world.
He told The Border Mail buying land and starting construction on inland rail could be five to 10 years away.
“Construction jobs are great, whether it stacks up on a cost-benefit analysis - I don’t think it does in the long term from what I’ve heard - but it’s great for the regions in the meantime,” Mr Walters said.
“The problem with the budget is they’ve been trying to do expenditure restraint for about three or four years now and that hasn’t worked and they’ve gone back to taxing now. I’m not sure that’s going to help regions either.”
Regional areas were advised to use the benefits of affordable housing to attract workers during the push for decentralisation.
“Look at the opportunities to attract people out of the big cities, where housing is ridiculously expensive, but you need the jobs,” Mr Walters said.
He said he had learnt a lot during his tour of regional areas such as Albury, Bendigo and Warrnambool where the AICD had a strong membership base.
One of the common themes was energy costs for business, some rising by as much as 300 per cent.
Mr Walters said businesses were having to absorb the expenses, while the federal government continued to negotiate an energy policy going forward, and state governments and regulators blamed each other.
“I think it’s a huge problem because energy costs are going up, particularly for manufacturers, so it’s a huge part of its costs base,” he said.
“It’s just a failure of governance … We haven’t got this right.”
The economist said education and innovation would suffer without energy.
But he said although turning to renewable energy was the right move in the long-term, he believed the switch was occurring too quickly.
“We’ve shut down old power, like coal, too early and prevented new gas developments” Mr Walters said. “I’m not against the push for renewables, but it’s still a bit expensive and we probably pushed too hard, too fast and didn’t have the baseload.”