Now is the time for infrastructure investment, Angus Taylor says
Cities Minister Angus Taylor says record low interest rates mean now is the time to invest in infrastructure and flagged financing it through bonds.
Ten-year Australian government bond rate yields fell to an unprecedented low of 2.2 per cent on Monday, leading economists such as Warwick McKibbin to urge the government to issue long-term bonds to fund Australian infrastructure, considering the country's good credit rating.
Mr Taylor said the government was already spending and was looking into more projects to fund in conjunction with the private sector.
Angus Taylor, the Assistant Minister for Cities.
"We've announced a whole series of rail projects all around Australia," he said.
"Now, some of that can be paid for on the budget but we expect in time much of it will be paid for from our balance sheet and the balance sheets of the private sector, private sector investors.
"That is central to our policy. We know this is a good time to do that because these are the lowest interest rates in world history and so now is a wonderful time for us and the private sector to be investing in great infrastructure projects."
Labor has promised to set up a $10 billion infrastructure fund, including an initial shortlist of 11 projects.
The Coalition attacked the proposal, saying it will create a conflict of interest for Infrastructure Australia, require a major increase in government borrowing, and involve handing out large sums to projects without expectation of either interest or principal being repaid.
Mr Taylor said the precise way to finance the projects still needed to be worked through and suggested government bonds were an option.
"The fundamental issue is not how to finance it although that's important, i.e. through bonds or through other traditional government bonds," he said.
"The fundamental issue is how to put together good business cases that drive not just a direct return on investment but have broader policy impacts like more affordable housing."
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