ICYMI - Australia's Federal government has cancelled 50 infrastructure projects worth AUD11.6 bn following a review into infrastructure spending.
Department of Infrastructure review recommended 82 projects be scrapped from federal funding, 36 should be rescoped and 156 should proceed.
Reasons cited include cost blowouts due to worker shortages, supply chain constraints and high inflation.
While scrapping more than 10bn AUD of projects would take some fiscal boost of the economy and assist the Reserve Bank of Australia in bringing down inflation there is more to the story that negates that take:
- the move will divert approximately $7bn of savings to deliver existing projects
- the total infrastructure spend will remain unchanged
Reserve Bank of Australia Governor Bullock will next consider a rate hike in February after the next round of official inflation data comes along on January 31: