Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank all senators who have contributed to this debate, in particular, Senator Conroy, for his very constructive contribution. The Asset Recycling Fund Bill 2014 and consequential amendments establish a new fund as a vehicle for providing financial assistance and incentives to states and territories to invest in infrastructure. A new fund is necessary to support the government's asset recycling initiative, a key initiative, that will encourage the states and territories to sell existing assets and reinvest in new infrastructure that contributes to a more prosperous economy.

Payments from the Asset Recycling Fund will also be used to fund nation-building infrastructure and other National Partnership agreements payments to other bodies will be administered by the Department of Infrastructure and Regional Development and will support important local initiatives such as the Roads to Recovery program in the usual way.

Establishing a new fund to support the government's infrastructure package is sound economic policy. It allows funds being committed now to be invested so that more is available when payments become due. Entrusting the Asset Recycling Fund to the Future Fund Board of Guardians will maximise the growth of assets. The board has a proven track record in managing assets on behalf of the taxpayer. It has grown the Future Fund from around $64 billion in 2006, when the previous government invested budget surpluses into the Future Fund, to over $97 billion by the end of March—in fact, at last count, it had exceeded $100 billion.

The government is committed to the new fund, which will be established with $5.9 billion funded by an amount of uncommitted funds from the Education Investment Fund and the Building Australia Fund that have not been allocated to approved projects. The government will make further contributions following the successful privatisation of Medibank Private; it has also said that it is open to committing proceeds from other future asset sales. Finally, the Asset Recycling Fund is an essential element of the government's infrastructure package announced in the 2014-15 budget to support economic growth. I recommend that it be supported by the Senate.

Question agreed to.

Bill read a second time.