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Tuesday's federal budget will include $10 billion allocated over 10 years for major infrastructure projects aimed at boosting both jobs and productivity in the COVID-affected national economy.
The money will be spent over 10 years across all states and territories, including $2 billion for a new freight hub in Melbourne and another $2 billion to upgrade the Great Western Highway between Katoomba and Lithgow in New South Wales.
There is also funding for road projects in South Australia (Truro Bypass), Tasmania (Bass Highway), Northern Territory (National Highway Network) and the ACT (William Hovell Drive), as well as rail and freight upgrades in Queensland and Western Australia.
The funding will be outlined in Tuesday's budget, in which the federal government will continue to pump money into the economy as it grapples with the ongoing presence of the COVID-19 pandemic.
The pandemic lockdowns last year hit the job market hard and although the unemployment rate has dropped quicker than expected, another outbreak of COVID-19 could send it rising again.
The unemployment rate dropped to 5.6 per cent in March, but the federal government wants to see it fall closer to 4.5 per cent.
To do that, the Coalition is foresaking its long-held rectitude on fiscal discipline to spend big, particularly on road, rail and freight infrastructure.
"Our record funding commitment is creating jobs, boosting business investment, while securing Australia's COVID recovery," Prime Minister Scott Morrison said.
Treasurer Josh Frydenberg said the funding would create jobs now and "set Australia up for the future."
"A new intermodal terminal in Melbourne will help to boost the productivity of the nation by helping businesses get their products to domestic and international markets faster following the completion of inland rail," he said.
The Bass Highway in Tasmania will also be allocated funding in the budget.(ABC News: April McLennan
)Job market 'surprisingly resilient'The long-term infrastructure spending follows the end of the economy-wide JobKeeper wage subsidy scheme, which was widely credited with preventing mass unemployment last year.
JobKeeper was wound up at the end of March, but new data from the ANU Centre for Social Research and Methods shows employment levels stayed steady between January and April this year, as did the average number of hours worked.
It shows the jobs market is "surprisingly resilient," according to co-author of the longitudinal study, Professor Matthew Gray.
"Between two and four weeks after the removal of JobKeeper, employment has remained stable and there hasn't been any drop that we've picked up yet," he said.
The introduction of a wage subsidy at a time of crisis shows the federal government has learnt from previous recessions, according to Prof Gray.
"There has been efforts made to keep as many people connected to the workforce as possible," he said.
"Some of the training programs and investment in human capital and re-skilling… (minimises) the chances of (people) becoming long-term jobless, which is when the real damage starts to happen at an individual level."
Spending on 'economic infrastructure' urgedThe federal government is expected to spend billions more on aged care, mental health and other critical sectors in the budget, as well as the infrastructure spending.
RMIT University economist Dr Leonora Risse is hoping to see budget measures that go beyond propping up consumption.
"It has got to be more than just replacing household demand, like supporting kitchen renovations," said Dr Risse.
"Something that [will] deliver a long-term payoff or the economy's productivity in the future."
Beyond physical infrastructure, she suggests the federal government invest in "economic infrastructure."
"It is the infrastructure that supports us to participate in the economy productively, which includes investing in childcare, social housing, aged care, disability care, education and training."
As for the accruing debt, Dr Risse backs the federal government's decision to spend, rather than save, at this point in time.
"Economic management is not about how to bring a budget into balance. That's more of an accounting issue," said Dr Risse.
"Economic management is how do you make fullest and greatest use of your economy's capacity."
This article first appeared on www.abc.net.au
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