ALC supports the sale of public assets to fund infrastructure improvements

Michael Kilgariff, ALC managing director

According to the Australian Logistics Council (ALC), a report released recently by Infrastructure Australia calling on governments to consider selling state assets to pay for infrastructure shines a light on the importance of ensuring funds are available to finance Australia’s growing logistics infrastructure requirements.

“Infrastructure Australia’s report highlights how funding new logistics infrastructure relies heavily on investment from public sector budgets,” said Michael Kilgariff, ALC managing director. “It is increasingly clear however that these budgets are coming under greater pressure and that new funding models need to be considered by governments to help meet Australia’s infrastructure deficit.

“ALC agrees with the report’s assessment that there are many assets that could be transferred to the private sector and that the proceeds from these assets could fund substantial new logistics infrastructure which is critical to boosting national productivity.

“A similar point was made by the Productivity Commission, which said ownership arrangements for electricity networks should be overhauled and state-owned businesses privatised.

“In its report, Infrastructure Australia notes that road pricing could generate significant additional revenues to fund new road infrastructure and maximise the efficient use of existing infrastructure.

“This underscores the importance of the Heavy Vehicle Charging and Investment Reform (HVCI) project which needs to work closely with industry to develop possible reform options that deliver improved productivity and more efficient supply chains.

“It is equally important that the HVCI project not be used by governments simply as an additional revenue raising mechanism that delivers no additional benefit to the logistics industry,” he added.

Kilgariff said the report also highlighted the growing need for a nationally consistent approach to the way logistics networks are financed, regulated and managed to achieve greater efficiencies and to enhance productivity.

“The need for a national agreement was highlighted in Ken Henry’s report ‘Australia’s Future Tax System’ which was intended to guide governments in the use and supply of road infrastructure,” he said. “It is timely that governments of all levels revisit this recommendation and give it serious consideration.

“Achieving a more nationally consistent approach also takes on added importance against the backdrop of the recently released National Land Freight Strategy which recommended further work should be undertaken by jurisdictions on issues such as road pricing reforms,” Kilgariff concluded.

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