Budget 2016: $2 billion for national water infrastructure
Australian water infrastructure has come in for a financial boost, with the latest Federal Budget announcing $2 billion in concessional loan funding over a 10 year period.
The funding, issued under a National Water Infrastructure Loan Facility, will be provided to state governments to bolster major water infrastructure projects.
The Australian Water Association CEO Jonathan McKeown said the Association welcomes the announcement as the facility will stimulate public-private partnerships.
“Water is our most precious resource and a key economic driver,” McKeown said.
“These measures will bring benefits to the water sector and the Australian economy as a whole. The Australian Water Association welcomes the water infrastructure funding, particularly as it encourages more public and private sector partnerships.”
Loan recipients will be able to make interest-only repayments for the first five years of the loan, with another 10 years to pay out principal and remaining interest.
McKeown said the announcement is in line with the Association’s lobbying efforts last year, which outlined the need for a national water fund that encouraged private-sector participation.
“The announcement also shows a strong connection with what the Association called for in October 2015 at the National Water Policy Summit, where we recommended a national water fund to incentivise the delivery of a National Water Vision focused on customer needs that delivers water quality, water security, cost-reflective water pricing, and a competition framework to increase competition and support private sector involvement,” he said.
“The Association also welcomes the government’s call for the water projects to be both financially and environmentally sustainable.”
SUEZ Operations General Manager Mark Lautre said the announcement reflects the important support the water industry provides to regional economies.
“The water sector is crucial to the productivity and liveability of our cities and regions. Our industry is faced with growing cost of service delivery, challenges with insufficient scale and declining asset condition which is evident particularly in regional areas,” Lautre said.
“The introduction of the National Water Infrastructure Loan Facility recognises the vital role the water sector plays in supporting regional economies.
“While the criteria has not been released, it’s positive to see the Government acknowledges the role the private sector can play in supporting investment in major water infrastructure projects alongside State and Territory governments.”
The budget also outlined the Federal Government’s intention to provide an additional $9.5 million during 2016-17 for the National Water Infrastructure Development Fund – the provision for feasibility studies into water infrastructure projects in northern Australia.