Home' Future Building Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 29
Volume 4 Number 1
nd it hard to cope with that relationship of a single
proposal coming forward and being properly aired.
It's a very good step, and not an easy one. James, do
you have comments?
JS: If you look globally, at the moment,
governments are forced to intervene in a massive way
in nancing markets. In Brazil and India, basically
all the money is lent by government-owned banks --
BNDES in Brazil, and state-owned banks in India. In
Europe -- the European Investment Bank -- multilateral
lending has gone up dramatically. In the United
Kingdom, the Government announced a £40 billion
guarantee facility to support all infrastructure projects,
which applies to both publicly funded and privately
operated infrastructure. Now, the reason behind
the United Kingdom guarantee is not necessarily a
worry about capacity; it's that the Government wants
these deals to happen quickly, and is worried that
negotiations around nance will take forever, and
slow down the pace of these deals.
Part of this is about making things simpler.
Something like the WestConnex structure -- where
government is funding the initial stages of the project,
and then when it becomes operational you look to
raise the nance -- will be a much more ef cient way
of raising the money, because the fact is, nanciers
like operational assets and nd green eld assets
much more dif cult.
MB: The nal area I want to move onto is the
simple one of taxation reform. I'm interested in any
observations about Goods and Services Tax (GST)
changes, and thoughts about what should be on the
agenda -- what should we, as a peak body, be trying
to encourage community debate about?
KS: There's little doubt that the scope of the GST
needs to be wider, and things that have been exempt
need to be brought within it. That's dif cult politically,
but the GST revenues are really in signi cant decline.
The other thing that's really worth looking at is what
[New South Wales Treasurer] Mike Baird's been
pushing: taxes that are currently paid to the state
government, which, when an asset is privatised, are
instead paid to the Commonwealth, leading the state
to lose its revenue source. That does make privatising
some assets very dif cult from a nancial point of
view for the states.
MB: Certainly if the electricity privatisations are
received fully in New South Wales, Queensland, and
Western Australia, it'd be very valuable to address that.
KS: The Networks NSW dividend ow would be
LM: It is essential in the rst term of this
Government that there's a comprehensive review of
the taxation system. The Henry Tax Review in 2010
failed, in my view, because it did not cover a series of
issues that needed to be addressed: principally, GST.
Left: Dr Kerry
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