Table of Contents
State governments are finally waking up to the need to get more actively involved in financing of public infrastructure. But at the Federal level, with the current commitment of Coalition and Labor to zero net borrowing over the economic cycle, the public debt straitjacket is becoming even more entrenched. The notion that, over the medium/long term, all general government investment should be financed out of current revenue or through the private sector is plain silly. It is impeding the Government’s capacity to meet the nation’s infrastructure needs and forcing it to adopt financing options that are economically less efficient than borrowing. It is also contributing to the run down of social capital and denying Australians a genuine, well informed choice on the appropriate balance between public and private goods. The policy needs a rethink.