Federal incentive for Qld housing sell-off

Queensland's new Labor government, which ran an anti-privatisation election campaign, wants to know if selling old social housing properties will qualify it for the federal government's asset recycling program.

After staunchly opposing the asset leasing plans of the Liberal National Party, Labor's key policy plank of their upset victory has been brought into question.

The Abbott government's $5 billion scheme encourages states and territories to sell assets and plough the proceeds into new, economic-enhancing infrastructure.

Federal Treasurer Joe Hockey has reportedly written to his Queensland counterpart, Curtis Pitt, saying selling social housing stock may qualify it for funding under the program.

However, The Australian reports, Mr Pitt wrote back saying the state was planning to spend the proceeds on new housing stock, which may not be economic-enhancing infrastructure.

"One of the conditions for accessing the asset recycling initiative is that the proceeds from the initiative will be used for economically productive infrastructure," Mr Pitt wrote, according to the newspaper.

"The Queensland government will appreciate your urgent advice as to whether social housing will be rightfully considered as economically productive infrastructure and will therefore be eligible to receive Commonwealth funding."

The NSW government is set to receive $2 billion from the Commonwealth after pledging to spend the proceeds from leasing 49 per cent of the state's electricity assets on roads and rail projects.

The ACT will also receive $60 million under the program for funnelling proceeds from asset sales in the Capital Metro light rail project.