An idea that has been around the block once or twice, is the latest Liberal policy encouraging the private sector to be involved in the financing (and presumably the building) of Australia’s infrastructure projects.
If the Liberal/Coalition parties win the 21 August 2010 election, they promise that any infrastructure project approved by the Federal government will be able to issue bonds giving investors (potentially superannuation funds or retail investors) a 10% tax rebate. For retail investors, this will mean an individual paying a top rate of tax of 45% will pay only 35%
Such bonds will be able to traded on the secondary bond market.
With a target figure of $700 billion in funding, the Liberal/Coalition parties promise to offer tax incentives to entice superannuation funds and retail investors to invest in the multi-billion dollar projects scattered around the country. Although $700 billion may be the target, the policy will only fund $20 billion in infrastructure projects, at an annual cost to consolidated revenue of $150 million. The scale and cost of the policy is likely to increase over time.
The Liberal/Coalition parties promise to beef up Infrastructure Australia, requiring it to produce 15-year plans and justify projects with publicly available cost-benefit analysis.
