Home' Future Building: The Australian Infrastructure Review : Volume 8 Number 1 Contents futurebuilding 49
to defend why we’re a good owner of airports, our pricing
decisions, and how our investment programmes are assigned
and appropriate. Governments are under scrutiny as well. We
absolutely think that private ownership of these assets is the right
thing to do. Everyone in the room here has a role to engender
greater trust across the community, and clearly explain what the
benefits are of having private owners of these assets.
DW: The heavy lifting of communicating the benefits of
private ownership to the public tends to get done by government.
What more should the industry be doing to sell the benefits of
the investments that you make?
MH: I disagree. Speaking on behalf of our superfund
owners and investors, we have made significant inroads
in terms of communication to super members about the
dividends to the wider community from infrastructure
investment, through to economic and social development,
and supporting Australia’s growth. This is in addition to its
contribution through member returns.
DC: It is difficult to work through the competing interests
involved in a government asset sales programme. Our position
is that governments are in the best position to inform the public
about the role of private sector ownership. While we don’t have
a view on which assets should be privatised, we do recognise
that there are benefits to the private sector owning some public
MC: Michael has alluded to the partnerships that we’ve
got with a number of the electricity businesses here, so that
is another model. The proof will be in the pudding, but I’m
confident that it’s a good model and it should be part of the mix,
DW: Are there any views on the tax rules being implemented
at the moment, and how that’s being handled?
MH: We’ve got a ‘Jekyll and Hyde’ environment at the
moment, and I can give you an anecdote. A Federal Minister
recently met with industry and implored us to invest more in
infrastructure. This was at a time when there was uncertainty
about tax rules, with the Australian Taxation Office (ATO)
releasing a taxpayer alert on stapled structures and then an
unexpected, subsequent review coming over the top from the
The government can’t ask us to invest more and, at the
same time, do a twin-pronged attack on stapled tax structures
for infrastructure that could fundamentally impact the sector.
The juxtaposition of the two issues left us scratching our heads.
While the Minister’s defence was that, ‘Well, that’s another part
of government’, that is simply not good enough. We need steady
and thoughtful government policy applied consistently across
the sphere. We can’t have one part of government undoing the
great work that infrastructure investors have been doing in this
nation over the last 20 years.
DC: Our view is pragmatic. It is reasonable that regulatory
and tax frameworks evolve as environments change; however,
it’s important to manage the process well, and understand
the consequences of any changes on the future appetite for
DW: Michael, are you optimistic about the future and the
deal flow that you’re seeing? Is this something that you or your
investors are concerned about?
MC: The mix of deals has changed. You’re seeing a lot of focus
now on renewables. There are definitely hot areas, but whether
investors think they’re good investments is another matter.
In general, there is deal flow, and we do get more refined
around where we think there is value for investors. That’s
ultimately what we’re going to be held accountable for.
DC: You’ve got to be optimistic. Nothing gets done unless
you’re optimistic; there are always opportunities.
MH: I agree. We are thinking more about how we can be
enablers for projects into the future. Going back to getting
the most out of assets, and adding to them – the situation in
Melbourne is that we don’t have a rail link between the city and
the airport. I’m proud to have an Opal Card, and I’ve been using
the train from Sydney Airport to the CBD for the last two years.
In terms of patronage growth, I think it is up something like 30
per cent in the last two years.
Sometimes the trip from the CBD in Melbourne to the
airport can be as long as the flight to Sydney. This isn’t
sustainable, even in the short term. We’re currently moving 36
million passengers a year at Melbourne Airport, and this will
increase to 60 million in 15 years’ time – that’s almost double.
We can’t imagine what it would be like to try to commute to
the airport. CityLink is a great piece of infrastructure, and it’s
being widened at the moment, but in five or 10 years’ time,
we’ll have huge challenges. We must offer other options.
We’re playing our part, along with Melbourne Airport’s other
shareholders and our investment at Southern Cross Station,
to try and kickstart the business planning work to deliver
the rail link. Both the Federal Government and the Victorian
Government are supporting this work with an initial $40
DW: If you each had one key message that you’d like to
leave the audience and policymakers with, what would it be?
DC: Cbus is a long-term investor, and we believe that
our primary objective in making appropriate risk-adjusted
returns for the retirement outcomes of our members is
complementary to making sustainable investments that
benefit Australian communities.
MC: Policy development is like the ‘Goldilocks’ of projects:
if you do too much too early, that has implications, similarly to
if you do too little too late. In line with what others have said,
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