Earlier this year Federal Treasurer Joe Hockey and ACT Chief Minister Andrew Barr announced that the ACT would receive 60 million dollars from the Federal Government as part of the Federal Governments Asset Recycling program, with that money to be directed to the ACT's Capital Metro light rail project.
ACT Light Rail covered that announcement here.
Today Joe Hockey made a speech at the Australia-Israel Chamber of Commerce. He was asked about infrastructure investment. In his answer he highlighted Capital Metro as a program the Federal Government supported.
The Treasurer has kindly agreed to take questions from the floor. There are microphones positioned in the auditorium, just please name your name. Thank you very much. Thank you Mr Treasurer for your talk. Certainly a very upbeat outlook on the economy, one that I didn't agree with before you spoke. I read an article recently saying that in America 9 out of 10 people have identified themselves as midled class and they're feeling increasingly economic insecure and vul nesh. We may be reading different things. My question is to do with record low interest rates in Australia. Interest rates are at record lows. It's cheaper for the Government to borrow money that is for individuals or even lower than the Government. Do you see an opportunity for the Government to take advantage of the record low interest rates to invest in a massive infrastructure project that will benefit Australia for generations to come? An idea I have from Blaney Morgan is for the Government to invest in rail instead of roads and I've read recently, 7 hours ago, that in Japan they've just invented a train that runs at 603km/h. It will take you from Melbourne to Sydney in about an hour, Melbourne to Brisbane in a couple of hours. It sort of takes me that long to get to Melbourne city from an inner suburb in peak hour. So my question is low interest rates, infrastructure project, your thoughts?
I love travelling by plane from Melbourne to Sydney. 50 years ago or 40 years ago I think it was the case that a scheduled flight took an hour, now it takes 1.5 hours. But I must say coming back from that great World Cup victory at the MCG I had the honour of sitting next to Vivian Richards so I was happy for the plane to take 2 hours. In relation to lower interest rates, money is very much available at the moment. The world is incredibly liquid. It's not about the money, it's about the projects and nothing illustrates, nothing illustrates part of the challenge we have better than the fact that you had an East-West project here in Melbourne with plenty of private money and the State Government has just spent what, $800 million paying for a road that is not being built? Go figure. How does that work? So I don't think there's an issue about the money. The projects need to be advanced. We will back metropolitan rail through our asset recycling program and the asset recycling program I announced in the last budget, $5 billion, I will reward State Governments that sell their assets and redeploy the capital into new productive infrastructure. The first government to sign up was the Labor Government in the ACT. Selling its TAB, selling public housing and redeploying the money with Commonwealth Government support into a new light rail project in the middle of Canberra. I want the Victorian Government to do the same. We will back it if they sell their assets, they've got a fantastic port down the road, I'm backing them on selling that. They sell that asset, redeploy the money into new productive infrastructure including into public transport. In its productive infrastructure we will back it and help to fund it.
Full details can be found at the Federal Treasures website. This is the full press release of the announcement from 18 Feb 2015.
First Asset Recycling Initiative agreement signed todayFederal Treasurer Joe Hockey and ACT Chief Minister Andrew Barr MLA today signed the first agreement under the Abbott Government’s Asset Recycling Initiative.
The ACT Government is selling nearly $400 million worth of assets and will be investing all of the proceeds into the Capital Metro light rail project.
The ACT Government privatised ACTTAB in 2014 for $105.5 million.
The ACT Government also intends to sell:
- public housing; and
- commercial property.
The sale of these assets and reinvestment of the proceeds means the Commonwealth will provide around $60 million in incentive payments to the ACT Government.
Under the Initiative, the selection of assets to be sold and the new infrastructure to be built with the proceeds of asset sales are solely matters for state and territory governments.
The Capital Metro project was the only infrastructure project proposed by the ACT Government. It has been a controversial project in the ACT. While the project was considered to meet the criteria of the Initiative, the Commonwealth is aware that there has been debate as to whether alternative projects may have higher potential economic benefits.
The Commonwealth is firmly focused on the national economy and the need to free up scarce government capital to build jobs, growth and opportunity around Australia.
The $5 billion Asset Recycling Initiative, which was signed by the Prime Minister and all first ministers on 2 May 2014, is designed to encourage states to get going with asset recycling at a time when the historic mining investment boom is receding.
The initiative is expected to generate close to $40 billion of additional infrastructure investment across Australia, with states and territories receiving 15 per cent of any asset sale as a bonus payment from the Commonwealth Government if the money goes into new infrastructure. It forms an important part of the Abbott Government’s historic $50 billion Infrastructure Growth Package.
The Treasurer welcomed the fact that the first agreement to be formalised under the Asset Recycling Initiative is with the ACT Labor Government and strongly encouraged other states around the country to participate and benefit from the incentive pool available.
Federal Treasure Joe Hockeys press release can be found here.
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