jabcc infrastructure mission

The genesis of this idea was presented at the Australia-Japan Business Cooperation Committee meeting in Perth in 2008.

The following is an excerpt of a speech by Bob Seidler.

PRIVATE SECTOR FUNDING OF INFRASTRUCTURE
In Australia, as in Japan, most infrastructure is provided by state or prefectural governments. Several decades ago, state governments in Australia were in serious financial difficulties and were unable to fund new infrastructure or refurbish existing infrastructure. This lead to governments turning to partnerships with the private sector to provide much needed infrastructure. Around the same time, the Keating government introduced a compulsory pension scheme into Australia. Infrastructure assets provided long term stable cash flows which could be suitable investments for pension funds. The growing pool of savings through the pension scheme provided a source of private sector funds for governments to finance their infrastructure needs. Over time the Australia private sector developed skills and experience in financing and operating public sector infrastructure and now is the world’s leading investor in infrastructure assets.

In Japan, prefectural governments are facing financial difficulties and strong pressure to upgrade its infrastructure much the same as we did. Japan has flirted with the UK PFI model as a method of involving the private sector without any great success. An opportunity exists for Japan to benefit from the experience gained and the mistakes made in Australia to financing its infrastructure needs. Australian and Japanese private sector participants could work together to use Australian skills and capital in Japan in partnership with Japanese prefectural governments. Equally, Japanese financial institutions and construction companies could work with the Australian private sector in its continuing involvement with State governments to provide Australia’s significant infrastructure needs…