"With the economy growing only modestly and with no signs of excessive inflation, there is certainly economic capacity to accommodate the extra work although it is critical that businesses access to skilled migration programs for key occupations is maintained. Extra spending on infrastructure will complement stimulus measures already in the pipeline from interest rate reductions and income tax cuts to underwrite higher incomes for, and spending by households and business.
"We understand that the increase in spending over the next few years will involve both additional funding and a bring-forward of spending originally set down for later years. This is a sensible strategy that leverages from the current strength of the budget associated with relatively high iron ore prices. In lifting incomes and spending it is a strategy that will also boost future tax revenue.
"As always, it is critical that infrastructure projects that receive government financial support are carefully selected for their contributions to economic and social well-being and are backed by rigorous cost-benefit analysis and transparent prioritisation processes," Mr Willox said.
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