Queensland has plenty of untapped potential for private investors and developers, but a report by the Infrastructure Association of Queensland (IAQ) shows that red tape is limiting the number of projects that get off the ground.
The report, which uncovered critical influences on private investment in Queensland, found that 88 per cent of investors were “highly likely” or “likely” to invest in Queensland, but an overwhelming 93 per cent of participants cited political instability as a barrier to private sector investment.
Other findings include:
- Nine in ten participants indicated that a perceived lack of investment opportunity was constraining private sector investment in public use infrastructure
- 84 per cent cited “red” and “green” tape as a barrier to investment, with a perception that Queensland’s infrastructure market is particularly difficult, costly and time-consuming compared to other similar markets
- Competition for assets was a barrier for 88 per cent of participants
- Despite unstable national policy settings, the state-based Renewable Energy Target has served as a useful market tool to support a record number of new renewable projects getting off the ground
The report captures the views of small, medium and large companies involved in Australian infrastructure, including infrastructure owners, fund managers, sovereign wealth funds, banks and consultancies.
All participants indicated that they were already investing in Queensland infrastructure, one in three of which had at least 50 per cent of their investment net worth in Queensland.
The report found that participants “considered renewable energy to be a standout new asset class in Queensland” and were actively invested in a broad range of asset classes, the most common being rail, roads, renewable energy, airports and ports.
Almost one-third of participants held global investment portfolios valued at AU$10 billion or more. A similar proportion were managing portfolios valued at under AU$1 billion.
IAQ Chief Executive Officer, Steve Abson, said Queensland is attractive because it has strong fundamentals of a robust rule of law and attractiveness of the regulatory environment, together with a successful track record of infrastructure projects closed.
“But, if Queensland wants to be Australia’s most innovative and dynamic trading economy—a magnet for global investment—it’s clear from this research that more efficient government processes should be introduced, and a ‘go get em’ attitude must prevail,” he said.
“Overwhelmingly, the research found that the private sector wants to play a greater role in providing Queenslanders with critical infrastructure.
“A frequent misconception is that the private sector must receive financial support from the taxpayer in the form of grants, tax relief and guarantees. If people are better informed of how mixed funding sources can deliver infrastructure quicker and without the public debt burden, Queenslanders will embrace it.
“Infrastructure is a strategic sector for Queensland and its political leaders. As astute investors continue to scan the world for value, we require a regulatory and investment regime that is able to outlive short-term government cycles or a political majority.”