Committee criticises asset recycling

The federal government should remove the link between privatisation and infrastructure funding from its asset recycling plans, a parliamentary committee recommends.

That would basically remove the purpose of the proposal, which provides incentives to state and territory governments to sell existing assets to invest in new infrastructure.

A Labor-Greens dominated Senate committee says the scheme could result in distorted and rushed decisions on purchasing infrastructure.

Government senators rejected the committee's recommendations on Thursday, saying spending on infrastructure is "one of the keys to economic growth and prosperity".