The Australian Government is "developing a plan for growth that will be centred around infrastructure" and which will feature "alternative financing options" that are yet to be specified, the treasurer, Joe Hockey, said in a speech in New York yesterday.The new Coalition government has already emphasised its desire to "be known as an infrastructure Government", a goal its predecessor shared."The challenge is to remove the impediments to private sector investment in infrastructure," Hockey said, without specifying any impediments.He might have been thinking that the private sector funding model that has been used for the last decade or so is broken. Infrastructure projects such as the Lane Cove, Cross City and Clem Jones tunnels have resulted in horrendous losses for infrastructure investors."The Government will consult with the finance sector and key stakeholders, including the state governments, to investigate alternative financing options which will encourage further private sector involvement," he said.One idea Hockey may plan to recycle is that of dedicated infrastructure bonds Governments can raise debt cheaper than any other borrower. The previous Federal government recognised this when it announced that it would issue infrastructure bonds in the 2009 budget.None were ever issued, other than notionally classifying some Commonwealth bonds as relating to the National Broadband Network.The Australian newspaper recently reported that the Government is considering an overhaul of Infrastructure Australia, including an allocation of additional resources and assigning a dedicated funding arm. The implication of this is that the overhauled entity would identify the infrastructure projects that need to be funded and would then issue bonds accordingly.If the overhauled Infrastructure Australia were guaranteed by the Federal government and each of the states and territories, the debt incurred would not appear on the balance sheets of any of them. Instead, they would have contingent liabilities. The guarantees provided should ensure that Infrastructure Australia receives an AAA rating from each of the rating agencies and would will help to minimise its cost of debt, but that cost would still be above that paid by the guarantors.At least one state has decided to take a much cleaner, if not cheaper, approach to funding infrastructure.The NSW Government announced in June that it will invest A$1.8 billion over the next four years in building the first stage of the WestConnex toll road. Then it will use the tolls generated on the first stage to cover the cost of bonds issued to build the next stage, and so on.Hockey also made limited reference to the planned financial system inquiry, on which the industry is yet to hear in detail regarding the planned terms of reference.The treasurer said the inquiry "will address, amongst other things, the capacity of the nation to fund its growth and investment needs over the decades ahead.""Our inquiry will undertake a general health check on our industry, which has come through the global financial crisis in exceptional shape."Most importantly, however, we must prepare for the future and our once every 15 years review will help to fashion the future of our financial services