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Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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One quarter of engineers to cut jobs as politicians dither: Consult Australia

Published 15 March 2013 12:21, Updated 20 March 2013 07:28

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One quarter of engineers to cut jobs as politicians dither: Consult Australia

Prime Minister Julia Gillard’s comments about tollways during her Western Sydney tour have done nothing to ease fears investors have about infrastructure projects, Hyder Consulting Australasia managing director Greg Steele says. Photo: Michelle Rowland

State governments inaction in Victoria and Queensland and political uncertainty at the federal level – created by a minority government and recent politicking around toll roads – is holding up infrastructure projects at the cost of jobs, says Hyder Consulting’s Australasia managing director Greg Steele.

The local unit of UK-based Hyder has cut about 30 people which is “2 to 3 per cent” of its staff, Steele says, in Victoria and Queensland.

“You’re seeing the inaction of Victoria that led to the recent changes [of leadership],” Steele tells BRW. “There’s not a pipeline there at all.”

Queensland is “doing a good job” of tackling its debt problem, but has suffered a setback from the latest round of floods, he says.

“The recent floods have put things behind and there’s been a little bit of inaction,” he says. “South Australia is quiet - we don’t see much growth there. Western Australia is okay.”

With NSW the only state showing signs of growth having tackled its own debt problem, Steele is blunt about what needs to happen. A minority federal government creates inaction on infrastructure funding, he says.

“To be frank, we need a change of federal government to get things going.”

Hyder is not the only consulting engineering firm to cut jobs. Rival SKM has cut staff, “less than 1 per cent” an SKM spokesman says of its 7500-strong workforce. Up to a quarter of consulting engineering firms are making targeted redundancies, industry body Consult Australia says, citing the results of its latest annual skills survey.

“This is just stage one of what will become a nationwide crisis should investment continue to fall by the wayside,” Consult Australia chief executive Megan Motto says. “Until governments provide a more stable and consistent pipeline of work, the engineering industry will be forced to continue cutting back staff, which will be to the detriment of Australian productivity and the overall economy.”

In January, the lobby group called on the federal government to boost infrastructure spending in its 2013-14 budget, which will be handed down in May. Consult Australia estimates that public infrastructure spending by all tiers of government will fall 20 per cent from $31.7 billion last financial year to $25.3 billion this year, cutting engineering consulting revenue by $950 million and causing the loss of some 4750 jobs from an industry that employs about 240,000 people.

Steele criticises comments Prime Minister Julia Gillard made during her recent trip to western Sydney – a region with a population greater than that of South Australia and one projected to grow to 2.96 million by 2036 – that the federal government would fund the proposed WestConnex road project. This project is needed to improve traffic flow out to the region, on the condition of imposing no new tolls on the existing M4 and M5 expressways in the region.

The state government has said tolling will be needed to pay for part of the $10 billion project, but has made no decision on whether existing roads will be tolled (or re-tolled, in the case of the M4). Steele, however, says the Prime Minister’s comments will weaken the appetite of funders.

“We can’t fund infrastructure as it is,” he says. “It makes business very nervous when those things keep changing. The commitment for funders and financiers will be wobbly.”

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