News & Current Affairs
29 March 2014
Joe Hockey wants States to sell off public assets
Joe Hockey: 'We need to fill an infrastructure hole in the economy and we need to do it fast.
States agree to in-principle deal to sell off public assets and direct profits into 'productive infrastructure' projects
Treasurer Joe Hockey has achieved a handshake agreement with the states that would see Canberra offer new incentive payments for the productive "recycling" of public assets.
After a meeting with his state counterparts in Canberra on Friday, Hockey said the Abbott government would provide a payment worth 15% of the asset if the state agreed to sell it off and invest the funds in new "productive infrastructure".
The incentive payment covers transactions agreed by June 2016 between Canberra and the state in question. The incentive payments would be available for five years, through to June 2019. The total dollar amount Hockey has allocated to the pool will be revealed in the May budget.
The commonwealth's incentive will be 15% of the assessed value of the proposed asset being sold for capital recycling, Hockey said on Friday.
If proceeds are used by the states and territories for the retirement of debt or other purposes, rather than for agreed, new productive infrastructure, they will not be eligible to receive payments under the initiative.
Hockey said the states would need to demonstrate their proposed reinvestment provided economic benefits before Canberra would agree to hand over the cash. "This is a blank sheet of paper for a project proposal, but obviously there needs to be a net benefit to the economy, it needs to be result in more jobs and it needs to be a good use of money," he said.
He said the funds would need to be allocated over a five-year period because obviously the scale of the asset sales will be potentially very substantial.
We need to fill an infrastructure hole in the economy and we need to do it fast, Hockey said. The incentive payments would have no impact on the carve-up of GST.
The shadow infrastructure minister, Anthony Albanese, responded to the news by arguing the Abbott government was walking both sides of the street on infrastructure: talking up its agenda but wanting others to do "the heavy lifting".
"At the same time as [Joe Hockey is] saying we need to invest more in productive infrastructure, he's planning to rip billions of dollars out of public transport projects that have been fully funded in previous Labor government budgets," Albanese said.
Friday's meeting also continued discussions around a long-running push by the states to apply the GST to more online purchases from overseas, and canvassed the always controversial carve-up of GST revenues. Hockey said there had been unsurprising "grizzling" about the GST carve-up, but the meeting had been otherwise productive.
Comments on the above:
Governments have been selling off public assets or having privately run infrastructure for 30 years or more.
I suggest there is plenty of evidence that it does not benefit the country as a whole.
Examples in NSW.
Sydney Airport. A huge money spinner for MacBank at higher cost and poor service to the public and the public purse.
Toll Roads. Most toll roads are substandard with 2 lanes and no emergency lane, they are badly coordinated and the toll is about twice that required under public funding. The extra money going to the likes of MacBank.
Electricity. Privatisation has led to poor coordination of the generators and lack of upgrade to the distribution systems. Result massive price hikes in the last few years.
The simple answer is that a company must look after the shareholders before the customers, they must follow the rules.
Look at the UK on its water problems
Like they did in SA. They sold off ETSA which was a very well run, PROFITABLE
company. Now we have an extremely inefficient replacement with three different companies trying to make it all pay hence we the consumer have enormous electricity bills.
Its a laugh to think that a privately run company is more efficient
Water,communication and power, three absolute essentials should be publicly owned. The desal plant in SA is privatly owned and they want to make a profit even when it is not in use!
Short sighted and blind. The thing that should be rented out is politicians!