Deloitte welcomes private sector investment in infrastructure
10 May 2011: Deloitte welcomes the increased funding and expansion of Infrastructure Australia, the creation of an Infrastructure Financing Group (IFG), and tax incentives for investment in public infrastructure projects around Australia announced in the Federal Budget.
The Treasurer stated that Infrastructure Australia’s extra $36 million in funding over four years will enable it to further develop its list of priority projects of national significance, as well as those projects over $100 million. It will also allow it to pursue greater private sector finance through the IFG as well as reforms to taxation on infrastructure investment.
Infrastructure Tax Partner Neil Ward said that Infrastructure Australia’s extra funding is a good thing and that, “we are pleased to see the Federal Government recognising the importance of private sector investment in large scale public infrastructure projects.”
“The new tax incentive, national construction schedule and Infrastructure Financing Group will provide significant encouragement to the private sector in Australia and overseas to invest in some of Australia’s strategic infrastructure projects,” he said.
The taxation changes proposed recognise:
- The long lead time for recovery of tax losses by uplifting the available loss by the government bond rate
- The need for changes in equity ownership or business over the life of the projects by allowing designated projects to be exempt from meeting the usual continuity of ownership and same business tests.
“Despite these positive initiatives, the missed opportunities in this budget, in particular the decision to defer a feasibility study for the F3 to Sydney Orbital Link, are disappointing,” Ward commented.
“With this announcement and its intent to involve the private sector, the congestion in our roads, rail and ports should be alleviated and this will go a long way towards improving the liveability of our cities,” Ward noted.