The failure of asset recycling

In Asset recycling may look new and exciting. But it's the last gasp of a failed model John Quiggin explains why asset recycling is a dud.

Viewed from the other side of the planet, asset recycling may look new and exciting. In reality, however, it was the last gasp of a failed model. The government’s asset recycling fund, established in 2014, was shut down in 2016, with barely half of its budget allocation spent.

The core problem with the “recycling” idea is that income-generating assets were sold to finance new investments that did not generate income. Rather like selling your house to buy an expensive car, this is a trick that can only be done once, and leaves governments with increased net debt.