This paper updates and clarifies proposals set out in the Infrastructure Australia's 2012 paper Australia's Public Infrastructure — Part of the Answer to Removing the Infrastructure Deficit.

The 2012 paper proposed that state governments should transfer publicly owned infrastructure to private ownership and use the net proceeds to finance new infrastructure so they can overcome the funding deficit for new infrastructure.

However, some claimed that, where the dividends from public infrastructure are significant, the government's capacity to fund new infrastructure may not be improved by transferring that infrastructure to the private sector.

This update paper therefore investigates the extent to which ongoing public sector dividends reduce the benefits that may be gained from transferring assets to the private sector.