Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

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.

The Asset Recycling Fund is part of the government's infrastructure package announced in the 2014-15 budget to support economic growth. Under the bill, the Asset Recycling Fund will receive an initial contribution of $5.9 billion at commencement, comprising of:

The government will make further contributions to the Asset Recycling Fund in the future, including the proceeds from the sale of Medibank Private and from other potential privatisations.

The capital and earnings of the fund will be available to fund new infrastructure priorities. It will assist the states and territories to sell existing assets and allow the sale proceeds to be reinvested into new infrastructure. The fund will also facilitate the government's investment in nationally significant infrastructure projects.

The Asset Recycling fund will support the government's Asset Recycling Initiative. The Asset Recycling Initiative provides $5 billion as incentive payments to unlock capital in state-owned assets and reinvest the proceeds in productivity enhancing infrastructure. The Australian government will pay the states and territories an incentive payment of 15 per cent of the sale price of the asset, to give states and territories an immediate benefit if they recycle their capital investments. This program is time limited, closing in 2018-19.

Payments from the Asset Recycling Fund will also be made to the states and territories for investment in infrastructure under National Partnership Agreements. The fund will also accommodate other infrastructure payments, to be administered by the Department of Infrastructure and Regional Development, including $350 million for the Roads to Recovery Program.

The Asset Recycling Fund will be invested and managed by the Future Fund Board of Guardians, which has a proven track record of managing investment portfolios on behalf of the government, and maximising returns over the long term.

The bill requires the finance minister and Treasurer to issue directions to the Future Fund Board to articulate the government’s expectations for how the fund will be managed and invested by the board.

The Asset Recycling Fund will support the substantial infrastructure package announced by the government in the 2014-15 budget. This package is part of the government’s investment in building Australia’s infrastructure, improving productivity and building a stronger, more prosperous economy.

Debate adjourned.