The West Australian Government has denied its multi-billion-dollar asset sales program is a failure, despite concluding just one major sale of $135 million in two years.
The Government wants to sell off a string of publicly owned assets as it tries to pay down spiralling debt, forecast to hit $39 billion by 2019.
When Treasurer Mike Nahan hands down the 2016-17 state budget next week, the only major asset sold so far will be the Perth Market Authority at $135 million.
But Premier Colin Barnett insists the asset sales program will work, and he does not believe it has damaged his government’s standing with the public.
“I don’t accept that there’s been a great loss of political capital or damage to the Government and I think people understand that governments have to make decisions,” he said.
Mr Barnett insisted state debt, currently sitting around $30 billion, could be managed.
“Our debt is manageable. It’s not out of control. And you’ll see that we’ve actually had some success in reducing debt over the past 12 months,” he said.
“But it is higher than it should be.”
Asset sales crucial to debt reduction: Premier
Mr Barnett said the high debt limited the Government’s capacity to undertake new capital projects, ranging from hospitals to schools.
He believes that without major asset sales it will not be possible for any government to pay down state debt.
Apart from the Perth Market Authority, the Government had identified Fremantle Port, the Utah Point port facility, and the TAB betting agency for privatisation.
Utah Point bulk handling facility in the Western Australian Pilbara.
PHOTO Legislation authorising the sale of Utah Point is the subject of an inquiry.
The Fremantle Port sale has stalled, with the Nationals refusing to support enabling legislation because of concerns port users could be disadvantaged by pricing and access arrangements imposed by a private operator.
The sale of the Utah Point bulk handling berth in Port Hedland has been sidetracked, with the authorising legislation now the subject of a parliamentary inquiry.
And Mr Barnett appears at loggerheads with the racing industry over the process for preparing the TAB for privatisation, with the industry re-thinking its support for the proposed sale.
Labor opposes privatisation of public assets and shadow treasurer Ben Wyatt believes the asset sales program has demonstrably failed.
“The entire asset sale program within the Liberal Government has been utter amateur hour,” he said.
“They’ve announced time and again that they’re going to sell this, that or the other, but at no point have they prosecuted a significant sale.”
Western Power privatisation mooted
The Government now plans to add Western Power to its asset sales list, with speculation the sale could deliver $15 billion, effectively halving state debt.
Mr Barnett plans to take that proposal to next year’s election, but concedes it will be a controversial decision.
“I recognise that Western Power would be a major decision, a very big decision and we’re not going to make that decision before the next election,” he said.
Western Power poles, WA, good close up generic
PHOTO A Western Power sale would be contentious, the Premier concedes.
“But we’re going to be very clear. It is our intention to privatise Western Power.”
Mr Barnett said the Government’s immediate priority was to conclude the sale of the Utah Point berth by the end of the year.
But economist John Nicoleau believes that will prove difficult because it serves junior miners struggling with low iron prices.
He said the Government should consider selling the entire port, used by major miners like BHP Billiton and Rio Tinto, rather than just the Utah Point berth.
“Then that is attractive and would ultimately see a greater sale price if it was part of the proceeds of a port sale overall,” he said.
Mr Wyatt said it was too late to sell the port facility.
“If Mr Barnett wanted to sell Utah Point, he missed that window by a couple of years where he really could have maximised the value to the taxpayer,” he said.