Australia Readies More Than $100 Billion in Asset Sales

In 2014 Australia was planning to sell potentially 130 billion Australian dollars in assets ranging from health insurers to electricity poles, hoping to set an example to cash-strapped governments around the world that need new funds to boost their economies.
Treasurer Joe Hockey, who will chair a meeting of finance ministers and central bankers from the Group of 20 developed and developing nations this month, said Australia’s conservative government was finalizing a deal with state counterparts to prioritize assets and businesses that could be sold to private investors.
“We are going to free up the capacity to get on with the job of building things,” Mr. Hockey told The Wall Street Journal in an interview at his parliamentary office in Canberra. “We’re going to form a partnership with the states that is going to be rolled out over the next few months, which is hugely exciting, and involves potentially massive transactions that will get the place moving.”
Governments around the world are weighing asset sales to plug holes in their budgets as tax revenues fall. Last year, the U.K. sold a majority of its interest in state postal service Royal Mail through an initial public offering in London, raising more than £1.7 billion (US$2.8 billion). New Zealand’s conservative government also has raised billions of dollars through selling stakes in power generators and national flag carrier Air New Zealand Ltd., aiming to return its budget to surplus by 2015.
Mr. Hockey said money raised would be plowed into infrastructure projects to boost jobs and growth in the world’s 12th-largest economy. Among the biggest projects being considered is a long-delayed new airport in Sydney to ease congested skies above the country’s largest city.
Australia’s asset-sale plan is likely to be announced in the conservative government’s first budget on May 13. “There is potentially A$130 billion in privatizable assets in Australia, maybe more,” Mr. Hockey said, pointing to utilities and transport networks as obvious candidates for sale.
Mr. Hockey said governments needed to be as small as possible to be at their most effective. Still, his parliamentary office gives a nod to a wide range of political views, from biographies of left-wing wartime prime minister John Curtin to long-serving conservative leader John Howard, a mentor of current Prime Minister Tony Abbott. Behind his wooden desk is a ceramic figurine of Winston Churchill, a few feet away from one of Chairman Mao standing in a Red Flag limousine.
Australia is aiming to use its presidency of the G-20 to secure financial-market reforms, such as overhauling tax regimes, while tearing down tariff barriers and encouraging private-sector investment. As part of this drive, Mr. Hockey wants emerging economies such as India, Mexico and South Africa to curb state involvement in industry, using Australia’s triple-A-rated economy as an example of success that can be achieved.

2 Comments Add yours

  1. Grahame says:

    Sell off the country assets and you immediately loose control.
    Next you know overseas governments have control of the assets.
    Our Tax’s going to the like of China or India governments.
    We must stop it TONIGHT.


  2. JOE HOCKEY was useless as a treasures and hasn’t got a clue what he is doing now as long as he is lining his own pocket


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