1. Value Sharing in Queensland 21 March 2016

2. Page 2 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Part I – The case for change, the concepts, and case studies

3. Page 3 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation The case for change – why now? ► Competing priorities: 1. High demand 2. Fiscal constraints ► The State Infrastructure Plan ► Value Sharing as a funding option *Qld Budget Fiscal and Economic Review **Qld Government Statistician’s Office Forecast GDP growth in FY17 4% pa* Qld Population Growth to 2019 1.75% pa* Yearly growth in exports 16.7% pa* Infrastructure investment Value creation Value-based revenue streams Financing mechanism

4. Page 4 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Funding and financing Funding comes from income and is used to repay financing that is borrowed to invest in the infrastructure development Cushion

5. Page 5 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Concept – value sharing

6. Page 6 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Concept – financing and value sharing

7. Page 7 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Value sharing revenues can support (and improve): ‘Conventional’ financing‘Alternative’ financing Concept – financing and value sharing Broadening the investor base and lead to.. General taxation Additional State Borrowing PPPs Debt instruments and capital markets Sale/securitisation of value sharing revenue Tax Increment Finance

8. Page 8 Copyright © 2016 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation Crossrail – the whole package Value creation ► 1.5 m more people within a 45- minute commute of centre ► Annual economic, employment and transport benefits of £1.24 billion by 2026. ► Reduction in journey times and rail crowding. ► Uplift in property values. ► Over-site development. Funding mechanisms Financing strategy ► ‘Fixed-rate variable-duration’ model. ► Short-term ‘stabiliser’ for taxpayers, and the state does not bear any risk in the long run. ► Not a (permanent) new tax, but a temporary cost- recovery measure closely linked to the project. Implementation ► Selling the benefits

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