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Industry welcomes national infrastructure plan
An Infrastructure Australia (IA) report has backed Industry Super Networks (ISN's) call to reform bid processes to encourage private investment into Australia's infrastructure assets.
The proposal, outlined in IA's 2013 National Infrastructure Plan, would reduce costs and barriers to entry, structuring projects in a more viable way for investors including superannuation funds, ISN said.
"It (the report) also recognises that some projects are best financed by the sale of existing public infrastructure to responsible owners like super funds, and the creation of a continued pipeline of projects is essential to fully unlocking the potential for infrastructure investment," ISN acting chief executive Matt Linden said.
Linden said it was vital that new thinking be adopted to better connect super funds with infrastructure assets in light of the increasing strain on public sector balance sheets.
"Industry SuperFunds are ready to work with the Federal Government, along with State and Territory governments, to provide further investment for critical nation-building infrastructure," he said.
ISN released a white paper in May calling for reforms to Australia's infrastructure investment pipeline. It said industry funds had up to $15 billion ready for investment over the next five years.
The Institute of Chartered Accountants also welcomed IA's report and said it would help close the infrastructure deficit, which has been estimated by some as up to $800 billion.
A single national infrastructure fund and private sector investment were critical to remaining globally competitive, it said.
ICA chief executive Lee White said, however, that the industry should learn from the past and possibly implement user-pays funding models.
"Public-private partnerships must be structured in a way where the risks and benefits are shared equally," he said.
"There have been too many poorly constructed partnerships where businesses have taken on too much risk, and others where the Australian public has struggled to reap the benefits of the new infrastructure.
"Implementing more user-pays funding arrangements is also an option, if that means we can deliver more infrastructure that boosts our productivity as a nation."
However, Grattan Institute chief executive John Daley, speaking at an Association of Superannuation Funds of Australia (ASFA) luncheon last month, cast doubt on the size of the infrastructure deficit, saying the only evidence was an IA wishlist of supposed infrastructure opportunities. He said boosting productivity was more important to economic growth.
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