David Gillespie (Lyne, National Party) Share this | Hansard source

I rise to talk about the Asset Recycling Fund Bill and the consequential amendments bill. The value of infrastructure and productivity to individuals, communities, cities, states and nations is the essence of this bill. Some people do not quite understand what asset recycling and unlocking the value of assets means, so I will explain that process. Infrastructure, whether it be road infrastructure, telecommunications, dams, ports, rail lines, hospitals, schools or utilities, delivers improvements in lifestyle, in amenity and in production. The better that infrastructure is, the better the productivity. In particular, transport links and telecommunication links need to be fast and efficient, because if they are not fast and efficient everything becomes more expensive. The old saying that 'time is money' really does apply in this space. The longer it takes our producers to get products to market, the more costs increase, and our competition gets an advantage. The less competitive we are, the less income there is for our nation and citizens. Poor infrastructure that is not efficient means more expense, so our products become more expensive, which in turn means our competitors get an advantage. That is really important, because one in five jobs comes from trade internationally. Increasing our productivity means that people will end up paying less for goods and services. Poor productivity means goods and services become more expensive, so the cost of living goes up. Productivity gains bring the cost of living down. People are not connecting productivity gains with cost of living, but that is what we as a nation have to do.

The second thing that this asset recycling addresses is unlocking value. Unlocking value means realising the value of one's asset. The states have many assets that hold value for them, but that value is not realised in a financial sense. In the early years of our Federation, and subsequently, the world economy and the Australian economy were quite different to what they are now. Many initiatives that we had—such as establishing major utilities and energy systems, transport bodies such as Qantas, banks such as the Commonwealth Bank and the state banks and things such as the old GPO, which became Telecom Australia—were bankrolled and run by governments. But both state and federal governments have vacated that space to a degree already. Most of these exits have been spectacular successes. You only have to look at what has happened to the Commonwealth Bank since it was sold off by the nation to see that. You only need to look at how Telstra has grown over the years since it was sold off to see that.

Initially, the scope, extent and capital required government involvement, but now we have a different world. We have huge amounts of capital available in this country both in private banks and in super funds that private enterprise could marshal. If the value of these assets were realised enormous amounts of infrastructure could result. Private enterprise now has the capability and the finances to run energy systems. It has demonstrated that time and time again. Previous governments have used the realisation of things such as Telstra and the Commonwealth Bank to pay off huge national debts. You only have to look at the debt that was left behind by the Keating government to see that. The asset sales—Qantas, the Commonwealth Bank and Telstra—delivered most of the reduction in debt. Look at what happened with the Commonwealth Serum Laboratories. Private enterprise used that intellectual capital and expanded it around the world. We now have a world leader in that as well.

This is why our Asset Recycling Fund has been created. It has been created to facilitate financial incentives for the states and territories to sell or lease their existing assets so that they can realise a financial windfall and reinvest that in their own new infrastructure. The Asset Recycling Fund will be created by rolling the funds from the Education Investment Fund, the proceeds of the Building Australia Fund and the proceeds from the sale of other assets, such as Medibank Private, into this fund. The fund will be administered by the managers of the current Future Fund. We should have a lot of confidence because when that was created it was at about $60 billion and now it is worth over $94 billion. So they do a good job at it. National partnership agreements, both in asset recycling and infrastructure, will guide this through the COAG process.

How does this initiative work? What is its value to the states? The value is that the Commonwealth passes to the states from this fund an extra 15 per cent on the value of their realised asset. So it is an incentive program for them to do that, but it is not just done willy-nilly. The asset recycling initiatives must demonstrate a clear net positive benefit to the states and the nation and enhance long-term productivity and the productive capacity of the economy. Also, where possible, the private sector should be involved to leverage the public sector money that is going into the project and add it to private capital as well. This leveraging of $50 billion of federal capital, added to state capital, together with private capital investment should support funds of up to $125 billion.

This is for solid state infrastructure. It is not the back-of-the-poster infrastructure that is delivered willy-nilly, such as the pink batts fiasco or the overpriced school halls fiasco where instead of the Keynesian economic multiplier effect we had an economic dividing effect. Good, solid taxpayer money went into overpriced and very ineffective school halls. It was the odd school infrastructure project that delivered value for money. These projects that we are encouraging the states to be involved in will deliver long-term, solid infrastructure. There will not be any 'cash for clunkers' in this scheme.

We will have real, lasting infrastructure, such as the Pacific Highway duplication, which will start soon in the Lyne electorate and head further north to the Queensland border. It is going to deliver, because all of the products that we ship in and out of the Lyne electorate will be coming and going on efficient freeways. It is going to reduce travel times, making transport costs cheaper. It is going to bring more tourists into the Lyne electorate. We have this huge, burgeoning south-east Queensland market of potential tourists who will come further south if they are not caught in traffic jams and on single-lane, winding and dangerous highways. You can see what has happened with the freeway coming through the Tweed down to Ballina and Byron Bay; it has opened up exponentially to the south-east Queensland market. We want it to keep coming down to Coffs Harbour and then down to Port Macquarie. Already the tourism market in our area has changed because of the duplication south of the electorate from Sydney. We now have not only week-long tourists, we also have people who come for three days or two days because it is within a three- or four-hour zone of Sydney, or even closer if you are coming up from Newcastle or the Central Coast.

As for other solid infrastructure that will be delivered out of this fund, we have the Roads to Recovery funding. In the Lyne electorate we have a lot of very poorly maintained roads which certainly can do with the Roads to Recovery funds that they are going to get out of this process. $16 million of federal money—up to $17½ million if you include the GST—is coming out of this to fund repairs to the Bucketts Way. If you add the Thunderbolts Way, which is another linkage into the Gloucester Valley, there is another $3½ million, so that is about $20 million of road infrastructure delivered locally into areas in the Lyne electorate.

These will not be like the school halls and the pink batts infrastructure that disappeared into the ether. This will be lasting infrastructure which will deliver long overdue benefits in the local economy as well as the state-to-state commerce that I have mentioned with the Pacific Highway. So I commend this bill to the parliament because of all the potential benefits that will flow from asset recycling. The state government in New South Wales will be able to deliver new schools and new hospitals because of the benefit they will gain from recycling the value of the money that they realise out of this asset recycling process. I commend the bill to the House.

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