Home' Future Building: The Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 3
Volume 4 Number 1
I want to address the question: Why isn't more
infrastructure being built across the country?
What you see is a range of challenges across the
states, but I believe that there are some solutions.
I want to present some of the challenges, and talk
about some of the solutions and the opportunities for
those in the sector.
When we came into government, the
infrastructure de cit, which was determined by
Infrastructure NSW, was $30 billion over the next 10
years. The debt pro le was $55 billion and rising.
Obviously, with that rising pro le, both in terms
of infrastructure needs and debt, the threat to the
AAA credit rating was very apparent. Indeed, our
incoming brief from Treasury made it clear that the
AAA rating would be lost unless we took action.
Before the global nancial crisis, you might have
been able to debate the necessity of retaining the AAA
rating. After the GFC, there is no debate. The cost is
signi cant. We saw it when Western Australia lost its
credit rating just recently, and its 10-year bonds blew
out by close to 30 points.
Queensland had similar downgrades, and it got
up to 60 points. Somewhere between 30 and 60
points for 10-year money, on $60-70 billion in debt,
you start to understand the nancial challenges. And
that's before you can put a dollar into infrastructure.
You would have to nd the additional money for the
cost of your debt, not to mention the issues that a
The Hon Mike Baird MP
New South Wales has become a strong example
to all states and territories of what can be
achieved by selling existing assets and using the
proceeds to fund new infrastructure, says New
South Wales Treasurer, The Hon Mike Baird M P.
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