Hockey shows off size of his cuts to inspire smaller nations
Federal Treasurer Joe Hockey has let a Wall Street Journal reporter in on the scale of cuts, sales and savings the Government intends to make, which may soon see the nation's power poles in foreign hands.
The US financial news outlet reports Mr Hockey is readying a plan to sell around $130 billion worth of assets, from Medibank to electricity infrastructure, and hopes his everything-must-go approach will be a lesson to other world governments.
“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 published this week.
“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.”
“There is potentially $130 billion in privatisable assets in Australia, maybe more,” Mr. Hockey said, adding that utilities and transport networks were obvious candidates.
“From my perspective, the sooner we get out of running businesses the better,” he said.
The Treasurer has also laid out some of his ideas for the upcoming G20 summit in Queensland, saying he hopes to secure financial-market reforms, overhaul tax regimes, tear down tariff barriers and encourage private-sector investment.
Mr Hockey told the Wall Street Journal that other countries can follow his lead, running with as small a government as possible and limiting state involvement in industry.
“You can't remove sovereign risk, but you can reduce it for investors in infrastructure, and the easiest way to remove sovereign risk is to have documentation and investment products that are familiar to investors, wherever they are located and wherever the asset may be,” he said.
He has advice for the United States money-holders as well, saying the U.S. Congress must ratify stalled IMF reforms to give emerging economies a bigger voting share in the global bank's decisions.
“Common sense must prevail on this, because it's now reflecting poorly on the United States, and that's the last thing I'd like to see,” Hockey said.
The Treasurer has defended his blocking of a $3 billion bid for Australia's biggest grain handler, GrainCorp Ltd by American agribusiness giant Archer Daniels Midland Co. He says it was necessary, and has not hurt future prospects.
“We've had a surge of [foreign-investment] applications since,” Mr Hockey said.
“You will get odd instances where there is a special case, individuals might be knocked back, but they are very, very rare.”