ASFA welcomes Federal Government’s asset recycling pool
Federal Treasurer Joe Hockey's announcement that state Treasurers are on board for an incentivised capital recycling model to invest in infrastructure in Australia has met with approval from the Association of Superannuation Funds of Australia (ASFA).
It comes after Hockey announced the Government will provide an asset recycling pool where it will provide an additional 15 per cent of the asset sale value from states to states if they use the funds for new productive infrastructure investments on top of what they have already committed to.
"This pool will be paid out over a five-year period because obviously the scale of the asset sales will be potentially very substantial and it takes time to sell and recycle the assets," Hockey said.
ASFA CEO Pauline Vamos said the model would provide an incentive for superannuation funds to invest in infrastructure by offering a pipeline of investable projects.
"There's no doubt superannuation funds have an appetite to invest in infrastructure; however investment has often been stifled due to a lack of suitable, available projects," Vamos said.
"In addition, recycling this capital into new projects, where investors are less likely to take on the risk, will help fund the nation's infrastructure needs."
Hockey said the pool would be available after state premiers agree to it and it will only be open for two years until 30 June 2016.
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