Australian federal government Treasurer Joe Hockey has announced a new scheme designed to get the country’s pipeline of infrastructure projects flowing.
The scheme involves the creation of an “asset recycling pool” whereby states will be handed 15 percent of the value of any asset sales if they agree to use the proceeds to invest in new infrastructure.
Hockey hailed the move as an “historic agreement” that would create tens of billions of new infrastructure across the country. “We need to fill an infrastructure hole in the economy and we need to do it fast,” he said.
The money will only be available until June 30 2016 to encourage state governments to act quickly – although money will be paid out over a five-year period in line with the expectation that some asset sales will take as long as that to come to fruition.
“This is a big step in the right direction, because it offers an opportunity to break the funding impasse and move beyond announcements and into actual project delivery,” said Brendan Lyon, chief executive of Infrastructure Partnerships Australia, in a statement issued by the Sydney-based lobbying body.
However, the move also caused some controversy – particularly among states which have already sold off most of their sellable assets and hence stand to benefit little if at all.
“We would certainly prefer that there had been some recognition that Victoria, and other states including South Australia, have done a lot of the heavy lifting when it comes to economic reform and asset recycling,” Victoria Treasurer Michael O’Brien told the Sydney Morning Herald.
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