Asset recycling to pay for infrastructure

Asset recycling to pay for infrastructureThe Property Council’s NSW Division is working with other business organisations to make the case for the NSW Government to use asset recycling to pay for infrastructure.The State is proposing to unlock up to $20 billion in capital from a long-term lease of 49 percent of the energy transmission network – or ‘poles and wires’ businesses.It is proposing to turn the funds back into the next generation of large infrastructure projects, including a second harbour rail crossing.The Property Council is backing the approach – partnering with other business groups and reinforcing the case through a recent submission to the Rebuilding NSW Discussion Paper.Our opinion piece in the Sydney Morning Herald outlining the opportunities arising from reform can be read here.”The property industry invests for the long-haul in cities, so we understand the role of infrastructure in boosting productivity and mobility,” NSW Executive Director Glenn Byres said.”It connects markets, underpins sustainable growth and helps people, business and freight move more efficiently across cities.”NSW is still clearing its infrastructure backlog, so turning capital from the energy network into new rail, road and other infrastructure helps solve the funding challenge.”The Property Council’s case to Government emphasises:NSW lacks the ‘headroom’ to take on extra debt, and without asset recycling, would need to forego infrastructure or raise taxes to pay for itThe proposed second harbour crossing – or Sydney Rapid Transit – will also connect into crucial markets like Macquarie ParkThe design of WestConnex needs to emphasise the importance of linking the port and airport with employment lands in Western SydneyProjects that benefit major regional centres like Newcastle and Wollongong need to be assessed for prioritisationWe’re also making the point the NSW Government needs to expand its options further, by using available funding solutions like Growth Area Bonds.