This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/world/2014/mar/28/joe-hockey-strikes-infrastructure-agreement-with-states

The article has changed 3 times. There is an RSS feed of changes available.

Version 1 Version 2
Joe Hockey strikes infrastructure agreement with states Joe Hockey strikes deal with states for ‘recycling’ of public assets
(about 2 hours later)
Treasurer Joe Hockey has struck what he says is a historic agreement with his state counterparts on infrastructure funding. Treasurer Joe Hockey has achieved a handshake agreement with the states that would see Canberra offer new incentive payments for the productive "recycling" of public assets.
All states have agreed to an in-principle deal to sell off public assets and direct profits into productive infrastructure projects, such as roads, to create jobs and lift economic growth. After a meeting with his state counterparts in Canberra on Friday, Hockey said the Abbott government would provide a payment worth 15% of the asset if the state agreed to sell it off and invest the funds in new "productive infrastructure".
Under the deal, the commonwealth will provide a funding pool for two years until 30 June, 2016, providing an additional 15% of the asset sale value back to the states. The total amount available in the pool will be revealed in the 13 May budget. The incentive payment covers transactions agreed by June 2016 between Canberra and the state in question. The incentive payments would be available for five years, through to June 2019. The total dollar amount Hockey has allocated to the pool will be revealed in the May budget.
Hockey said the states must agree to use the proceeds for new infrastructure investments above and beyond what they have already committed to. "The commonwealth’s incentive will be 15% of the assessed value of the proposed asset being sold for capital recycling," Hockey said on Friday.
“We need to fill an infrastructure hole in the economy and we need to do it fast,” he told reporters in Canberra on Friday. "If proceeds are used by the states and territories for the retirement of debt or other purposes, rather than for agreed, new productive infrastructure, they will not be eligible to receive payments under the initiative."
Hockey described the meeting as “incredibly productive”, noting it had produced an unanimous decision. However, there had been some predictable “grizzling” about distribution of GST revenue. Hockey said the states would need to demonstrate their proposed reinvestment provided economic benefits before Canberra would agree to hand over the cash. "This is a blank sheet of paper for a project proposal, but obviously there needs to be a net benefit to the economy, it needs to be result in more jobs and it needs to be a good use of money," he said.
The treasurer also briefed the meeting about the challenges he was facing with the federal budget. There was common ground on the need to make “difficult and important” decisions. He said the funds would need to be allocated over a five-year period “because obviously the scale of the asset sales will be potentially very substantial”.
“I alluded them to the fact that everyone will need to help to undertake the fiscal repair necessary,” Hockey said. "We need to fill an infrastructure hole in the economy and we need to do it fast," Hockey said. The incentive payments would have no impact on the carve-up of GST.
The shadow infrastructure minister, Anthony Albanese, responded to the news by arguing the Abbott government was walking both sides of the street on infrastructure: talking up its agenda but wanting others to do "the heavy lifting".
"At the same time as [Joe Hockey is] saying we need to invest more in productive infrastructure, he’s planning to rip billions of dollars out of public transport projects that have been fully funded in previous Labor government budgets," Albanese said.
Friday's meeting also continued discussions around a long-running push by the states to apply the GST to more online purchases from overseas, and canvassed the always controversial carve-up of GST revenues. Hockey said there had been unsurprising "grizzling" about the GST carve-up, but the meeting had been otherwise productive.