Government accused of setting up building fund to buy votes

By: Jason Whittaker

The Federal Government is coming under increasing pressure to outline the details of the Building Australia Fund as the Opposition

The Federal Government is coming under increasing pressure to outline the details of the Building Australia Fund as the Opposition ramps up its claims it will be used to bankroll Labor’s 2010 election campaign.

Coalition frontbenchers say the fund will be used for pork barrelling because money will not be allocated until 2009-10, the period in which the next federal election will fall.

Opposition spokesman on transport Warren Truss questioned Rudd in Parliament, seeking confirmation the Government will spend all the capital as well as interest from what is being deemed a "slush fund".

Yet Rudd dodged the questions over spending allocation and whether money will be used on failing state projects, instead responding to Truss by lamenting "the failed rump that it [the National Party] has become".

Shadow treasurer Malcolm Turnbull thinks the fund will amount to pork barrelling, saying the Budget does not stipulate how the money will be used and for what.

In an attempt to counter this, Treasurer Wayne Swan has announced transport guru Sir Rod Eddington will chair "an independent organisation governing the Building Australia Fund".

But he did not rule out whether the board responsible for allocating funds will be free of government interference. His only comment is the process will be "rigorous" when evaluating proposed projects.

There is no specific date as to when the Building Australia Fund’s governance arrangements will be finalised, with Swan saying in his budget speech such issues will be finalised in a few months.

The Government, however, expects the fund to be running by January 1, 2009. According to Minister for Transport and Infrastructure Anthony Albanese, the fund is "an unprecedented overhaul of the way we think about infrastructure coordination for the nation".

Part of the $20 billion capital stems from the Budget’s $21.7 billion surplus and the remaining funds will come from the next two budgets.

Despite uncertainty over the running of the fund, the transport industry has thrown its support behind the initiative, with peak industry bodies such as the Australian Trucking Association (ATA) and Ports Australia saying it will go a long way toward removing freight bottlenecks that are currently constraining productivity growth.

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