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Thursday, 19 March 2015
Page: 1985


Senator McEWEN (South AustraliaOpposition Whip in the Senate) (16:26): On behalf of Senator Dastyari, I present the report of the Economics References Committee on incentives to privatise state or territory assets for new infrastructure, together with the minutes of proceedings of the committee and the transcript of evidence.

Ordered that the report be printed.

Senator McEWEN: I move:

That the Senate take note of the report.

I seek leave to incorporate a tabling statement in Hansard.

Leave granted.

The document read as follows—

I rise to present a report by the Senate Economics References Committee on its inquiry into privatisation of state and territory assets and new infrastructure.

The committee examined the incentives provided by the government's Asset Recycling Initiative to privatise state or territory assets and recycle the proceeds into new infrastructure.

Under the initiative the Commonwealth would make an incentive payment equal to 15 per cent of the sum of proceeds from an asset divestment, on the condition that the state or territory government reinvests both the proceeds and the incentive payment, into additional infrastructure.

The committee is very concerned that binding privatisation with infrastructure funding may lead to several significant problems including:

potentially distorting privatisation decisions, that would not proceed if they were considered on a case-by-case basis;

potentially distorting infrastructure decisions by states and territories, leading to projects being pursued that would not stand on their own merits;

the possibility that both privatisations and infrastructure projects will be rushed without appropriate public consultation, safeguards, corporate structures and regulatory arrangements in place;

the potential to create inequitable outcomes between states and territories, as the scheme unfairly benefits those jurisdictions which currently have assets for sale or that are prepared for sale, rather than those jurisdictions where the infrastructure is most needed.

The committee is recommending that the link between privatisation and infrastructure funding under the Asset Recycling Initiative be removed, ensuring states and territories consider the merits of privatisation on a case by case basis, and fund infrastructure projects based on community and economic need. The Commonwealth could contribute funding based on the merit of proposed projects while considering a more equitable distribution of funds across states and territories, based on need.

I commend the report to the Senate.

Senator McEWEN: I seek leave to continue my remarks later.

Leave granted; debate adjourned.