Infrastructure Australia calls on governments to examine sale of public assets

INFRASTRUCTURE Australia this month called on governments to examine the sale of commercially viable, publicly owned assets to the private sector, in order to fund critical, new infrastructure.

The approach is outlined in a new report, 'Australia's Public Infrastructure - Part of the Answer to Removing Infrastructure Deficit', which aims to respond to the significant infrastructure deficit and associated funding task that the nation is facing.

In the report, Infrastructure Australia identifies more than $100 billion of commercial infrastructure assets on Australian government balance sheets, such as airports, roads, water services, ports, freight rail and electricity generation, transmission and distribution.

It argues that the costs to governments of operating and maintaining these assets often far outweigh the benefits to the community of retaining these assets in government ownership.

"Governments around Australia need to explore new methods of financing and developing the infrastructure needed to improve national productivity," said National Infrastructure Coordinator, Michael Deegan.

"If we are to build on and sustain the living standards of all Australians, governments need to recognise that they cannot bridge the current funding gap."

According to the report, many assets in the energy, ports, regional airports and freight rail sectors could be sold relatively quickly and under current policy settings. The report identifies these sectors as having the most capacity to provide funding for new economic infrastructure.

It says Australia's superannuation industry is well placed to purchase these assets, providing an opportunity to achieve all the potential benefits of a sale while maintaining ownership of these assets across a broad cross-section of the community.

The report identifies a number of successful asset sales that it says have generated real community value, such as the recent refinancing of the Sydney Desalination Plant which raised $2.3 billion, $300 million more than the cost of constructing the plant.

"Infrastructure Australia recognises that some members of the community have genuine concerns about the private sector owning or controlling infrastructure that has long been in public hands," Mr Deegan said.

However, he said there is strong evidence that those concerns can be addressed through appropriate regulatory structures that maintain service levels, provide pricing protection to consumers and environmental standards.

In addition, Mr Deegan said social objectives can be effectively and transparently provided for through community service obligations.

More information on the report, 'Australia's Public Infrastructure - Part of the Answer to Removing Infrastructure Deficit', is available from the Infrastructure Australia website at <>.

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