The article refers to an article (by Laura Tingle) in the AFR. Apparently my $3 per day subscription doesn’t entitle me to see the article online – the first time I’ve encountered this problem.
In the dead tree version we are told that the CEFC is making 7% on funds invested, as against their benchmark of 3%, being the five-year bond rate. Other than being a good Labor idea, I think the Government’s objection may be that the CEFC adds to gross debt. The fact that it adds nothing to net debt is apparently irrelevant.
The dividend stream more than covers the cost of administration. The Direct Action alternative is to pay public servants to hand out taxpayers’ money without a return.
Each dollar spent by the CEFC leverages $2.90 in private capital expenditure. So far over $500 has been spent leveraging $1.55 billion of private capital investment.
Apparently the CEFC operates in a niche that would not happen without it.
It has been able to do deals that are too small, too complicated, or not previously done in Australia. In other words, deals that bankers can’t get past their own credit committees which prefer easier propositions.
Perhaps the CEFC’s real crime is to offend Big Coal.