Joe Hockey looks to convince states to sell public assets to invest profits in infrastructure

Updated

Treasurer Joe Hockey says the states would be "mad not to" sign up to his offer of cash payments for new roads, ports and rail lines in return for the privatisation of state assets.

But the West Australian and South Australian governments are already warning they are unlikely to agree to any deal, arguing the Commonwealth should be paying for the new infrastructure it promised to voters before the last federal election.

Mr Hockey is meeting his state counterparts in Canberra today to try and secure an in-principle agreement for a mass sell-off of state utilities in return for money for new infrastructure.

It is not clear how much cash is on offer, but the Federal Treasurer says the states will find the incentives hard to knock back.

"I have no doubt that the states will find it very hard to resist what the Commonwealth is prepared to offer them for the recycling of state government assets and investment in new productive infrastructure that's going to create jobs and improve the capacity of the economy," he told reporters on his way into Parliament.

"So, we'll see how the meeting goes."

Under the Federal Treasurer's plan the states would have two to three years to draw up a list of assets for sale and identify new projects which could be started sooner rather than later.

But South Australian Treasurer Tom Koutsantonis says it is not appropriate for the Commonwealth to try and force the states into selling their utilities to pay for infrastructure the Federal Government promises.

"Let's face it, the Prime Minister wants to be the infrastructure prime minister, he wants to build the roads of the 21st century, but he wants to do it with state-based assets," Mr Koutsantonis told reporters in Canberra.

"We're not going to be selling our state-owned assets to pay for infrastructure the Commonwealth should partner with us to pay for anyway.

"SA Water provides a dividend and we are the driest state in the driest country in the world and we're not selling our desalination plant and we're not selling our water assets to private companies.

"Water is an essential utility. South Australians own it - they've paid for it. Why should we sell it?"

The Western Australian Government wants to use the proceeds of any asset sales to pay down debt, with a Federal Government source saying the departure of former treasurer Troy Buswell has given them new hope of striking an agreement with WA.

WA Treasurer Mike Nahan says his Government is standing by its policy to pay down debt, but is open to anything the Commonwealth might "supplement".

"We will be driven by our own policy," he said.

"If in fact the Commonwealth Government's proposal supplements it, yes we will look at it, but it has to be supplemental."

Mr Hockey says no state has to sign up, but has warned those who refuse will lose out.

"I say to the states: it's your choice - you can sign up or you don't have to. It'll be first in, first served," he said.

"So, those that want to access the pool can access it; those that don't want economic reform can bypass it."

New South Wales Treasurer Mike Baird says he "warmly and strongly" endorses Mr Hockey's plan and is signalling his state could be one of the first to sign up.

"The asset recycling initiative that Joe is putting forward is warmly and strongly endorsed by NSW. We hope to have that agreement signed," he said on his way into the meeting.

"This is not about ideology; this is about delivering infrastructure that people across this country desperately needed and have waited for."

Mr Baird says the community support for selling off "old assets" in exchange for "new assets" is growing.

Queensland Treasurer Tim Nicholls says his Government is also keen to see what the Commonwealth is proposing.

"Anything that can assist us in terms of investing in the future infrastructure that a growing state like Queensland is going to need over the next 10 to 20 years is something that we're very keen to talk about," he said.

Topics: government-and-politics, federal-government, federal---state-issues, australia

First posted