Privatisation measures will affect many business sectors and will be divided into short term (2014- 2016), medium term (after 2016) and long term (no fixed date) projects. The realisation of assets in the long-term could generate more than $11 billion for the government.

This follows the recommendation in the National Commission of Audit report, released on May 1, that government enterprises such as NBN Co, Snowy Hydro Limited (13 per cent stake), Defence Housing Australia and the Royal Australian Mint be sold to the private sector. The government has held off on decisions for now on a number of those targets for privatisation, but it has announced in the budget that "'scoping studies" will be undertaken into the current ownership of Australian Hearing, Defence Housing Australia, the ASIC registry function and the Royal Australian Mint with only the previously-announced Medibank privatisation definitely to proceed. The government enterprises up for sale are those that are seen to operate in contestable markets.

Norton Rose Fulbright partner Iain Laughland says that a number of methods of privatisation may be used. For instance, the ASIC registry function could be privatised by a single asset sale, while other sales, such as Defence Housing Australia could be the subject of an initial public offering.

"One of the outcomes of the scoping studies announced is likely to be a recommendation on the method of sale which will be the method that provides the best opportunity to government to maximise value on the realisation of the asset," he said.

"Until the scoping studies have been completed it is difficult to determine with certainty what business sectors are best placed to benefit. But prospective buyers or investors in the assets that have been ear-marked for privatisation should maintain a close eye on developments and announcements regarding the implementation of the privatisation program by the government."

While the National Commission of Audit mentioned ASC Pty Ltd as one potential sale target, it was omitted from the list of enterprises for which a scoping study will be commissioned from the budget overview papers. Norton Rose Fulbright partner Alena Titterton says that the omission is a logical one "given the significance of the future submarines project for Defence and the naval shipbuilding industry".

In relation to any proposed privatisation of Defence Housing Australia, the issues for government might not be straight forward. Ms Titterton says that the Military Superannuation and Benefits Act 1991 (Cth) and Defence Housing Australia Act 1987 (Cth), which respectively establish the Military Superannuation and Benefits Scheme and the Defence Housing Australia body, will need to be repealed if the National Commission of Audit recommendation is to be adopted.

There are benefits to industry, though, from these potential sales. "Any sales following the commissioned scoping studies represent a windfall for the road infrastructure industry given that any funds arising from the sales will go towards the government's Asset Recycling Fund (see below) with funding targeting major road infrastructure projects", Ms Titterton said.

However, Ms Titterton said that as part of any focus on "strategic and nationally significant infrastructure, high speed rail ought to be somewhere on the agenda".

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