Federal 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.
Total proceed of asset sales are expected to total nearly $400 million.
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.