A new $5 billion Asset Recycling Initiative
will enable the federal government to offer incentives to state and
territory counterparts to sell government-owned assets and use the
proceeds to pay for new productive infrastructure.
States and territories stand to gain 15 per cent of the asset
value if they sign a bilateral agreement with the federal
government that locks in future spending on agreed projects, rather
than taking other measures, such as paying down debt. Time is also
an issue; state and territory governments will only have until 30
June 2016 to form agreements with the federal government.
The government will establish an Asset Recycling Fund to provide
funding and financial incentives to states, territories and other
bodies to invest in new productivity enhancing infrastructure,
including through the Asset Recycling Initiative. It will start
with $5.9 billion (uncommitted monies from other funds) and will
grow with the addition of proceeds of the Medibank Private sale and
any future privatisations.
"The federal government's Asset Recycling Initiative
will delight private sector infrastructure asset companies and
major builders, who will have new opportunities to buy blue chip
government assets and to build new roads, rail and infrastructure
co-funded by the scheme," Mr Morgan-Payler said. "Banks,
superannuation funds and infrastructure asset operations and
maintenance businesses will also benefit from the opportunities to
participate in these new projects.
"The initiative will favour states and territories that
still own significant assets, such as major ports, water assets and
electricity transmission, distribution and generation assets.
Infrastructure Australia has estimated that Australian governments
currently own at least $100 billion in such commercial
infrastructure assets, which could be sold."
Norton Rose Fulbright partner
Keith Redenbach says that the Asset Recycling Initiative
borrows heavily from the experience of NSW and the new NSW Premier,
"Mr Baird's background as a banker and manager of the
financial affairs of the state have no doubt forged the way
forward. This means the lion's share of funding has been
allocated to NSW, where the model has been in operation since Mr
Baird was appointed to his former role as Treasurer in March
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
There has been a range of recent legal developments that affect privacy, child abuse claims and workers compensation.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).