Treasurer Baird speaks at Infrastructure & Investment Conference
In a keynote address in Sydney to the Infrastructure Partnerships Australia 2013 Infrastructure & Investment Conference, Mr Baird has reiterated his support for changes that would allow the states to retain the benefits of the "tax equivalent payments" they receive from public businesses, even after those businesses are transferred to the private sector.
Current arrangements militate against large asset transactions, which can unlock funds for new infrastructure, by transferring the benefits of tax equivalent payments to the Federal Government, as company tax.
Tax equivalent payments were introduced under national competition policy to ensure that government businesses face the same tax environment as the private sector, when they are competing with private firms.
"When an asset is moved to the private sector, rather than paying the payments back to the states, they move to company tax to the Federal Government,". Mr Baird told the audience of several hundred infrastructure industry representatives.
"My argument would be to the Federal Government that it’s a number that doesn’t sit within their forward budget estimates, so there is no current cost.
"But if you are looking for an incentive, why not take the pool of funds that are released here and say, 'Let's put that into infrastructure?'
"It is something we should closely look at. It provides an additional opportunity and additional incentive, and as governments face political battles, the more money we can secure for infrastructure is good for the state and good for the nation.
"My argument previously, under Wayne Swan, was that we should look at the payments.
"It's obviously something I will be discussing in detail with the (new) Federal Treasurer."
Mr Baird also called for a more "honest discussion" with the community on infrastructure funding, including on toll roads.
"I think the political class has underestimated the intelligence of the electorate and their capacity for an honest debate," Mr Baird said.
"We're not going to be able to afford to build the infrastructure unless we have that honest discussion with the community.
"If you want to receive a benefit, then we’re going to seek your contribution to do it.
"Our policy (on the WestConnex motorway) is, let's get the benefit in place, and then let’s ask for contributions with the toll.
"Governments have to have the capacity and the strength and the will and the honesty to say: 'There’s going to be a toll, we’ll try to minimise that, but ultimately it is a critical part of delivering the infrastructure'."
Download Keynote Address - Treasurer Mike Baird (MP3, 14.7MB)