Australia plans to raise up to €86bn by selling state assets as the government tries to bridge a gaping budget deficit.

The announcement came after the International Monetary Fund highlighted the challenge Australia faces to return its budget to surplus in the aftermath of the global financial crisis. The task has been made harder by tax revenue falling short of expectations as a mining boom cooled.

Australia’s budget is heading for a €30.8bn deficit in the current fiscal year that ends on June 30. Gross debt will peak at AUD $667bn (€438bn), according to the latest government projections.

Finance minister Mathias Cormann was not specific on what assets were being considered for sale, aside from his government’s plan to sell health insurer Medibank Private, which is estimated to be worth up to €2.5bn.

Treasurer Joe Hockey, who chairs a meeting of the G20 finance ministers in Sydney this month, is expected to reveal more of his privatisation plans when he delivers his conservative coalition government’s first annual budget to parliament on May 13. He is developing the asset sale plans in conjunction with state governments.

The conservative coalition took office after winning elections last September after five years in opposition.

“There is opportunity for both the federal government and state and territory governments to recycle capital by selling infrastructure which appropriately can be sold and then reinvest the capital,” Mr Cormann told Australian Broadcasting Corporation radio. He said assets sales would boost economic growth and create jobs.

Mr Cormann said AUD $130bn (€85bn) “is the potential” amount of money that could be raised.

Analysts at ANZ said the greatest beneficiaries would probably be the New South Wales and Queensland state governments, which own the majority of public assets.

The IMF warned the Australian government that it would have to make “sizeable cuts” in projected spending if it was to return the budget to an enduring surplus.

“We are very conscious of the challenge in front of us. The treasurer and I are very focused on turning the situation around that we’ve inherited,” Mr Cormann said.

More in this Section

Qantas cuts flights to Asia amid coronavirus outbreakQantas cuts flights to Asia amid coronavirus outbreak

EU leaders wrangle over spending amid post-Brexit budget summitEU leaders wrangle over spending amid post-Brexit budget summit

Astronomers observe Jupiter-like planet with shortest orbitAstronomers observe Jupiter-like planet with shortest orbit

Egypt’s once-reviled street dogs finding popular acceptanceEgypt’s once-reviled street dogs finding popular acceptance


The singer is no stranger to sporting an array of pastel nail polishes.7 times Harry Styles had the perfect manicure

Gareth Cotter-Stone explores the magical city on the west coast of Ireland.Why you should visit Galway, European Capital of Culture 2020

More From The Irish Examiner