The federal coalition is about to unveil an infrastructure policy package which seeks to raise the share of private funding in the industry via tax breaks for infrastructure bonds and incentives for partnerships between the government and private sectors.
The new policy package aims to replace government spending with private funding for key infrastructure projects, with opposition finance spokesman Andrew Robb saying it serves a prime example of the renewed emphasis in coalition policy of “living within our means.”
Robb said the policy proposal had been devised following 18 months of consultation with investment banks, superannuation funds and infrastructure companies on the most effective means of drawing private investment to the sector.
The release of the infrastructure package is part of a broader unveiling by the coalition of its policy platform in the lead up to the federal election later this year.
Opposition leader Tony Abbott has already flagged ambitious plans for large-scale infrastructure projects in the eastern states of Queensland, New South Wales and Victoria, as well as the construction of dams in the north of Australia in a bid to transform the country a bread basket for the Asia-Pacific.
Commentators have already noted that one of the key measures an Abbott government would immediately introduce upon election would be to sharply reduce infrastructure costs via the reintroduction of building industry rules to tenders for government projects.
Such measures are currently being implemented in Victoria by Premier Ted Baillieu, with Queensland and New South Wales expected to soon follow suit. The application of industry rules to tenders are believed to reduce costs by as much as 25 per cent by wresting control of building sites and the selection of sub-contractors away from unions and construction companies.
While these cost cuts will play a vital role in facilitating Abbott’s ambitious infrastructure plans, the opposition leader has also emphasized the necessity of private capital for large-scale projects, with cash-flush super funds serving as one of the most likely sources of investment funding.