Labor’s infrastructure funding from the 2025-2026 budget is set at $60.7 billion over four years, reflecting a slight increase in funding from the previous year.
The Government announced as part of their election campaign the following infrastructure initiatives:
- Prioritisation of road and rail infrastructure through a $17.1 billion commitment over ten years from 2024-2025, including a record $7.2 billion for upgrades to Queensland’s Bruce Highway.
- Major upgrades to transport corridors, such as a $1 billion rail corridor in Western Sydney and a further $2 billion for the upgrade of Melbourne’s Sunshine Station.
- A promise to construct 100,000 new homes for first home buyers through a $4.5 billion investment, in partnership with State and Territory governments.
- Investment in water infrastructure set at $87.7 million over three years to deliver new water infrastructure projects.
The Government’s re-election ensures continuity in its long-term infrastructure commitments. The strong Labor majority in the House of Representatives may fast track infrastructure funding commitments and allow the Government to push for approvals for more significant infrastructure projects, particularly in the renewables sector.
Successful delivery on these commitments may be complicated by the scale of key infrastructure projects and the lengthy implementation process for these projects. Key areas to watch will include the transmission upgrades required to support their 82% renewable energy target by 2030, the effectiveness of integrating local manufacturing into the procurement process and whether the Government’s promises on housing delivery keep pace with demand.
Federal Election and it’s impact on infrastructure
Labor’s landslide re-election brings continuity in Australia’s long-term infrastructure and energy transformation. The Albanese government remains committed to achieving 82% renewable electricity by 2030, up from around 40% today. This target is central to both emissions reduction efforts and the broader Future Made in Australia strategy to reindustrialise the country through low-emissions energy.
To reach this target, Labor will continue investing in infrastructure through programs like the Rewiring the Nation Fund and the Capacity Investment Scheme (CIS), which aim to modernise the electricity grid and encourage the build-out of renewables, storage, and gas firming capacity. This transition is intended to replace aging coal generators, many of which are scheduled for closure by the mid-2030s. Offshore wind is a key part of the strategy, with projects such as Alinta Energy’s Spinifex Wind Farm already advancing under new federal licensing regimes.
Labor’s infrastructure investment extends beyond the energy transition. The Albanese Government has outlined several initiatives to invest in Australia’s transport infrastructure, water infrastructure and new housing. Infrastructure funding in the 2025-26 budget is set at $60.7 billion over four years - a slight increase from the previous year. The Albanese Government will provide $87.7 million over three years from 2025-26 to deliver new water infrastructure projects.
Road and rail infrastructure priorities will receive $17.1 billion over ten years from 2024-2025, with a record $7.2 billion earmarked for upgrades to Queensland’s Bruce Highway. This funding will emphasise local manufacturing, potentially favouring regional and SME suppliers in major tenders, complementing the Future Made in Australia strategy to invigorate local manufacturing.
Continued funding of the National Rail Manufacturing Plan will mandate local production of trains and light rail rolling stock, presenting opportunities for advanced manufacturing businesses. Examples of the direction for this funding include investing $1 billion to secure a rail corridor in Western Sydney and a further $2 billion for the upgrade of Melbourne’s Sunshine Station. The Albanese Government and the NSW Government have committed to upgrade Fifteenth Avenue in Western Sydney to create a new Liverpool to Airport Transit Corridor, connecting Bradfield city centre to the new Metro train line and the Western Sydney International (Nancy-Bird Walton) Airport. The Albanese Government will also continue to invest in sustainable mobility through a $100 million Active Transport Fund.
Labor have promised to construct 100,000 new homes and incentives for first home buyers. To do so, they have committed $4.5 billion in funding for states to address infrastructure backlogs and reduce barriers to new housing. This funding is split, with a commitment of $1.5 billion to the Housing Support Program to fund housing projects and $3 billion in incentive payments under the New Homes Bonus.
While these projects would deliver on long-term infrastructure goals of the Albanese Government, the scale of key infrastructure projects may complicate the delivery of their election promises. The ambitious housing targets and infrastructure required for the energy transition may face cost overruns and challenging intergovernmental coordination. Key areas to watch include the rollout of transmission upgrades under Rewiring the Nation, how effectively local manufacturing is integrated into procurement processes and whether the promises on housing delivery keep pace with demand.
