Bosses urge assets sale
WA's leading business group has called on the Barnett Government to develop a 10-year plan to progressively sell down State-owned businesses amid a warning from Treasury that government agencies such as Western Power represent a spending risk to the Budget.
The Chamber of Commerce and Industry said a mature debate was needed on another round of privatisations after Treasury issued the warning in the mid-year economic review.
The review revealed the Government expected to collect $1.4 billion in payments from government trading enterprises - including the electricity utilities, Water Corporation, the Insurance Commission of WA, Goldcorp and the TAB - this financial year.
That sum, however, is almost wiped out by subsidies and other direct payments from consolidated revenue to the GTEs of $1.3 billion, a mere $100 million return on assets held by GTEs exceeding $52 billion. The GTEs are responsible for 55 per cent of the State's infrastructure program, most of which is funded by borrowings that are contributing to the Government's ballooning $22 billion debt.
And Treasury has warned that big, unfunded, new spending will be required by Western Power on the electricity grid and Horizon Power on generation in the Pilbara.
CCIWA general manager of corporate communications Tim Bray said the Government was getting an insufficient return on investment from the GTEs.
"CCI believes the Government has no choice but to develop a program of asset sales, and that should be a long-term program."
The renewed privatisation debate comes after the Government established an asset sales task force, charged with reducing net debt, and amid calls from Federal Treasurer Joe Hockey for the States to sell assets and reinvest proceeds in new infrastructure.
In October, Mr Hockey flagged compensation payments for States that would lose annual revenue streams from State-owned businesses.
"At this stage, WA is not considering the Federal Government's proposal for States to invest in new infrastructure projects through asset sales," a spokeswoman for Treasurer Troy Buswell said.
_The West Australian _has learnt the task force's members are Water Corporation chief Sue Murphy, Insurance Commission of WA chief Rod Whithear, Under-Treasurer Tim Marney, Finance boss Anne Nolan and Premier and Cabinet chief Peter Conran.
