Josh Frydenberg says the government is open to bringing projects forward to help boost the economy

This article is more than 11 months old

This article is more than 11 months old

A meeting of the country’s treasurers on Friday will develop plans to fast-track infrastructure funding and reverse plunging productivity rates, amid growing concerns about the health of the Australian economy.

The contentious issue of state and federal health funding will also be discussed, with health reform on the agenda as a productivity measure, with the state treasurers to discuss a shift in the funding model to one that pays for “values and outcomes”, rather than being activity based.

“This reform will consider funding and payment arrangements to ensure governments increasingly pay for high quality, best value health care, not just the number of services delivered,” meeting notes state.

Treasurers will also be given an update on the national health reform agreement, which needs to be renegotiated by June next year.

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Following calls from state treasurers for the commonwealth to boost infrastructure spending to help boost economic activity, the federal treasurer, Josh Frydenberg, said the government was open to doing so on the condition that states could deliver projects within “accelerated timeframes”.

“I am looking forward to a constructive meeting today with my state and territory counterparts to discuss how we can continue to work together to achieve strong economic outcomes for Australia,” Frydenberg said.

“Our focus will build on work already being done by the commonwealth and states and territories and will deliver concrete benefits for Australians such as better quality roads; healthier, more productive people; and more timely approval of major projects.”

Frydenberg said some states had already responded to a letter from the prime minister, Scott Morrison, sent to premiers in August about fast-tracking certain projects, and said the government would work closely with the states to work out which projects can be potentially brought forward.

In total, he said the commonwealth and states were working to progress 130 land transport projects currently under construction, 140 that were in planning and 300 that had been announced in the past six months.

Friday’s meeting will also focus on measures that could boost national productivity, which last month’s national accounts revealed was in decline. The three-year average annual growth figure of 0.4% is now he worst it has been since the 1990s recession.

The Reserve Bank has also urged greater government stimulus, after it cut the official cash rate by 0.25% to a new record low of 0.75% – the third reduction in the cash rate in five months.

Australia’s economy grew by 1.4% in the year to June – the lowest recorded annual rate since 2009 – which the RBA governor, Philip Lowe, noted was “weaker than expected”.

But while the government has been resisting calls for more fiscal stimulus, treasurers on Friday will discuss several issues aimed at boosting productivity, including heavy vehicle road reform, health reform, workforce skills and environmental approvals.

The council of federal financial relations meeting will discuss the national heavy vehicle charging system for trucks, which “has poor links between the needs of users, the charges they pay and the services they receive”.

Following the meeting, the treasurers will take part in a forum on population, which is developing a new national population and planning framework that the government says will “set out a practical approach to improve population planning and management”.

Ahead of the meeting, state treasurers said they would be pushing the federal government to boost spending on infrastructure projects and maintenance, arguing most of the federal funding allocated was beyond the forward estimates.

The New South Wales treasurer, Dominic Perrottet, is pushing for the federal government to bring back plans for asset recycling for large infrastructure projects, according to a report in the Australian Financial Review.

The Western Australian treasurer, Ben Wyatt, said he believed a lift to Newstart would help boost economic activity quickly, but only plans to bring up the issue if the meeting canvasses stimulus options.

He said that the federal government needed to be prepared to have a “dialogue” about stimulating the economy, saying they had hit a “cul-de-sac” by ruling out a boost to Newstart.

“Even the commonwealth’s levers are starting to run out in terms of getting money out the door quickly.”

The Queensland treasurer, Jackie Trad, said most of the infrastructure spending announced in the federal budget was funded beyond the forward estimates.

“We need the funding to be accelerated and these projects to be fast-tracked now to provide the stimulus needed.”

She joined the Victorian treasurer, Tim Pallas, in arguing for the federal government to bring forward spending on maintenance.

“I would also like to see the federal government increase its commitment to jointly funding the maintenance of existing assets, given the role they can continue to play in supporting our communities for many decades to come,” she said.

The South Australian treasurer, Rob Lucas, said state and territory treasurers agreed on the need for health reform to ensure money was better spent in the system, but there was “scepticism” about progress being made.

“We all agree about the need for health reform, but what is it that in practical terms can push the debate and the discussion forward?” he said.

He also said there was an agreed view around the table that there was “capacity for very significant reform” in terms of federal-state financial relations.