Alternative financing would boost infra Down Under

A white paper from minister of infrastructure and transportation Anthony Albanese suggested alternative financing, including off-balance sheet accounting, is needed to support the asset class in Australia.

A call to reform infrastructure funding in Australia floated alternative financing – including off-balance sheet government accounting – in a white paper released by Anthony Albanese, Minister of Infrastructure and Transport.

The report, entitled Infrastructure Finance and Funding Reform, also argued for improved infrastructure planning to provide a deeper project pipeline as well as a more flexible and efficient market to encourage private investment.

“A deep pipeline will provide the industry with certainty,” said Michael Deegan, infrastructure coordinator for the Infrastructure Finance Working Group, created by Albanese.

Balance sheet reform, the study claimed, would create space to invest in new infrastructure, augmenting the traditional grant-based approach to funding and co-funding between the private sector and local and state government.

Using an alternative source of financing, a superannuation fund for example, would bolster interest in the brownfield asset market, the study claimed.

Regulatory reform would also decrease the cost of bidding on public-private partnerships (PPP), the report claimed, pointing out that bidding in Australia can cost 25 percent to 45 percent more than in Canada.

From 2013 to 2014, the government of Australia committed A$36 billion ($35 billion; €28 billion) to transportation infrastructure, a figure the report cited as “unprecedented” while noting that population growth is going to generate more investment in infrastructure.

Albanese, who became minister of infrastructure and transport in 2007, established the working group in 2011. Last year, he co-authored a report called Encouraging More Investment in Infrastructure.