Joe Hockey has finally made a breakthrough.
While privatisation and infrastructure building have been the death-knell for coalition state governments at two recent elections, the treasurer has at last found a taker for his asset recycling initiative.
The $5 billion scheme, part of last May's budget that encourages the states and territories to sell their assets and plough the proceeds into new, economic-enhancing infrastructure, has signed up the ACT Labor government.
The nation's capital is selling nearly $400 million worth of territory assets, and the money will all be invested in its Capital Metro light rail project.
The Abbott government will provide an additional incentive payment of about $60 million from the asset recycling fund.
"The Commonwealth is firmly focused on the national economy and the need to free up scarce government capital to build jobs, growth and opportunity around Australia," Mr Hockey says.
He again encouraged other states to follow the ACT's lead.
For its part, the ACT government privatised bookmaker ACTTAB in 2014 for $105.5 million and also intends to sell public housing and commercial property it owns.
"Our goal here is better transport and better public housing," ACT Chief Minister Andrew Barr said in a statement.
But the ACT Liberal opposition thinks the "cash bonus" is being squandered on the light rail and would be better spent on road upgrades, bus infrastructure, or a convention centre.
Mr Hockey warned a Sydney business audience that while Australia's economic fundamentals are strong, it would be irresponsible to assume that performance will last forever.
He says his soon-to-be-released intergenerational report will demonstrate the challenges the country faces to grow as fast as it has in the past as the workforce ages.
That is why the government is focused on promoting workforce participation through childcare reforms as part of a families' package.
It will also flesh out a small business package before the May budget that includes a tax cut.
Mr Hockey said getting the budget back to surplus will be critical to pay down debt.
"If debt is left unchecked we will rapidly find ourselves in a situation where we are spending more and more of our income just on ... interest payments," Mr Hockey told NSW Business Chamber's economic briefing breakfast.
"From there it is a downward spiral."
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