Federal Treasurer Josh Frydenberg to release plan for foreign investment in local infrastructure projects
Major developments like the North-South Corridor could be completed much quicker with foreign investment, the Federal Treasurer claims – but it could mean paying road tolls.
SA News
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Hundreds of millions of dollars could be unlocked to fast-track South Australian infrastructure projects, under a plan by Federal Treasurer Josh Frydenberg.
The deal that encourages foreign investment into major infrastructure could help get projects like the North-South Corridor, Globelink or the SA-NSW interconnector built more quickly, at time when South Australia is looking to fast track projects to stimulate the economy and boost flagging business confidence.
But the deal could mean that, in some cases, the need for road tolls to make the proposition attractive enough for overseas investors.
Mr Frydenberg will on Friday release a paper spruiking the tax incentives to drive billions of dollars of foreign capital into the Australian economy.
Under the plan, investors could access a tax rate of 15 per cent, instead of the 30 per cent which would otherwise apply. “To qualify, these major projects will have an estimated capital expenditure of $500 million or more and cover a diverse range of economic infrastructure projects in the areas of transport, energy, communications and water,” Mr Frydenberg said. “The application will apply to projects that are in the national interest and significantly enhance the long term productive capacity of the economy.”
Mr Frydenberg said the deal would generate interest from managed investment trusts keen on investing in projects with long-term passive income through leases or tolls. Treasurer Rob Lucas said the $1.53 billion electricity interconnector between SA to NSW and port infrastructure on the Eyre or Yorke Peninsulas could be possible candidates.
“The Government welcomes the announcement ... however, given the criteria such as the $500 million threshold, there might only be a limited number of possible eligible projects in South Australia,” Mr Lucas said.
“We will also obviously consider the guidelines to consider what projects might be eligible.” Civil Construction Federation boss Phil Sutherland said the State Government should not be afraid of using tolls if it meant getting the North-South corridor finished faster. “North-South is being funded on a drip-fed and South Australians deserve a better road across the city,” he said.
“Our information is that the general public would accept a toll.”
The State and Federal Government have $5.4 billion on the table for the final stretch of the North-South corridor, but costs could blow out if tunnels become the preferred option.