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Abbott government needs to deliver, says Qube Holdings

With new Prime Minister Tony Abbott declaring Australia “open for business” on the eve of his election victory, industries all across the nation are looking to see what that really means for them. One area that is front and centre is infrastructure — roads, railways, shipping and construction.

Making products move faster on their way to stores, distribution centres and ports can improve productivity and lower costs, and if infrastructure is not maintained along the way, it decays and becomes obsolete.

One company that is looking to the Liberal government to put it into gear and get things rolling is Qube Holdings (ASX: QUB), an import/export logistics service provider. The company listed on the ASX only in 2011, yet has a strong pedigree in shipping and transport by way of the list of executives from Patrick Corporation, a former logistics and port operator taken over by Toll Holdings (AX: TOL), among which is Chairman Patrick Corrigan, the former managing director of Patrick Corporation.

At its main facilities in Botany Bay, where it handles more than a quarter of a million shipping containers annually, it is currently working with Aurizon Holdings (ASX: AZJ) to expand and development its inter-modal freight terminal. The project would allow more direct rail transport into the port facilities, and potentially raise Qube Holdings annual freight container handling capacity by about four times.

Other rail transport companies like Asciano (ASX: AIO) are also in line to benefit from the new Liberal government promise towards infrastructure. The Australasian Railway Association’s (ARA) CEO Brian Nye said, “ARA looks forward to discussing other rail infrastructure projects with both the Federal and State Governments, which will not only assist in the national freight task but will also relieve congestion on the urban networks in our major cities through separation of freight and urban rail lines.”

Foolish takeaway

Government’s role is to create and administer a level playing field for business to operate within, and they can direct public spending regulation to improve productivity. The new government has to live up to its promises by creating a budget that encourages growth, yet at the same time not getting the country too much deeper in deficit.

This is one campaign platform which the business community will use as a gauge to see how Abbott lives up to it.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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