Federal help for states to reinvest in infrastructure tied to timetable

Joe Hockey is pushing the government’s infrastructure agenda. AAP/Katherine Griffiths

The Commonwealth will promise incentives for states that reinvest funds from assets sales into new infrastructure within a certain time when federal Treasurer Joe Hockey meets his state counterparts on Friday.

The assistance could take the form of tax reimbursements or cash grants, with federal ministers this week discussing the form, amount and time frame of the program, which was canvassed at a treasurers’ meeting late last year. It potentially involves billions of Commonwealth dollars.

The states have been working on details of what they can sell and what they want to keep in public hands.

The Commonwealth says that assistance must be linked to a clear time frame.

Encouraging the states to privatise assets they own is part of the Abbott government wider infrastructure push, which also has seen Prime Minister Tony Abbott set up a cabinet committee, that he will chair, to oversee the national effort.

Abbott said today that the committee would provide recommendations to cabinet on infrastructure projects and policy. It would drive and assess the progress of major projects and would act as the direct line of accountability for the delivery of Commonwealth infrastructure.

“Under state and federal Labor Governments, infrastructure delivery has been mired in bureaucracy, delays, uncertainty and opaque lines of accountability,” he said.

The national infrastructure committee would ensure Commonwealth-supported projects “are given the highest level of oversight, co-ordination and accountability”. Better infrastructure “will be the hallmark of the Coalition Government”.

The government’s commitments included WestConnex in Sydney, the East West Link in Melbourne, the Brisbane Gateway Motorway, the Toowoomba Second Range Crossing, North-South Road corridor in Adelaide, the Gateway and Swan Valley Bypass in Perth, the Midland Highway in Tasmania, completing the duplication of the Pacific Highway and multi-billion dollar upgrades to the Bruce Highway.

Abbott has said he wants to be known as the infrastructure prime minister.

Friday’s treasurers’ meeting will also discuss lowering the GST threshold applying to imported goods bought on the internet. Retailers have complained that the present threshold of $1000 is costing them large sales losses.

The matter was discussed by treasurers late last year but put on hold while further work was done by officials. Hockey does not want to move on the issue unless the states are united - the Commonwealth is predicting division.

The other matter before the treasurers is the Commonwealth Grants Commission report on the distribution of the GST revenue.