The State Government will sell the Canning Vale Markets, the Kwinana Bulk Terminal and Utah Point bulk handling facility in Port Hedland in a bid to reduce spiralling debt and regain the State's triple-A credit rating.
Treasurer Mike Nahan and Premier Colin Barnett announced the first round of asset sales at a press conference this morning, saying it could raise up to $2b.
"These are the first assets we will open up to the market," Mr Barnett said.
"These assets are better placed in the private sector.
"They are likely to be better run by the private sector."
Port Hedland’s Utah Point Bulk Handling facility is one of four berths owned by the Pilbara Ports Authority.
It includes a shiploader, two stockyard product storage facilities and supporting infrastructure.
In 2012-13, the asset earned $86.5 million in revenue, with $44.1 million in expenditure.
“The port assets are likely to be sold as a long-term lease,” Mr Barnett said.
The Kwinana Bulk Terminal exports and imports bulk products including coal, iron ore, liquefied petroleum gas, cement clinker, gypsum, nut coke and slag.
Owned and operated by Fremantle Ports, the terminal's total throughput of 5.2 million tonnes in 2012-13 generated revenue of $61.6 million, with operating costs of $36 million.
With 155 tenants, the Perth Market Authority operates Market City in Canning Vale, which undertakes the marketing and distribution of fresh fruits and vegetables in WA.
Dr Nahan said the continued operation of the Canning Vale markets would be a condition of sale.
He described today's announcement as the start of an ordered asset sales program by the Government.
Shadow treasurer Ben Wyatt said in May last year the three assets had been on a Budget table of publicly owned entities that could be sold, indicating Mr Barnett had no new ideas.
“It’s also clear Mr Barnett still can’t admit he’s got a spending problem,” Mr Wyatt said.
“This is not an issue around GST, this is not an issue around revenue, it’s an issue around expenditure.
“And ultimately today’s announcement by Colin Barnett is not a fiscal plan, it’s the budgetary equivalent of rushing down to Cash Converters with the TV under his arm so he can meet the next monthly instalment on the mortgage.”
Mr Wyatt said Mr Barnett’s attempts to blame the loss of the State’s AAA credit rating on its declining GST distribution was disingenuous because the tax receipts, while low and getting lower, were in line with expectations.
“Ultimately we have never had a GST shock to the Budget,” he said.
“We always get what we expect, we have had strong revenue growth.”
Mr Wyatt said the “panicked” nature of the sales meant WA taxpayers were likely to be short-changed on their assets.
However the WA Chamber of Commerce and Industry welcomed news of the asset sales, saying it sent an important signal that the Government was committed to addressing its fiscal issues by tapping into the private sector.
But it said selling assets was only part of the plan to help address the State’s fiscal problems.
Chamber chief executive Deidre Willmott said the task to regain the triple-A credit rating would also require a focus on controlling government spending, which had grown on average 8.8 per cent over the past six years – well above population and inflation growth.
The WA Chamber of Minerals and Energy also welcomed the State Government’s decision to begin asset sales.
“CME has been urging the Government to articulate a clear path to regain WA’s AAA credit rating,” chief executive Reg Howard-Smith said.
“Today’s announcement is a step in the right direction.”
However Mr Howard-Smith insisted all existing rights at the two ports were protected and that they remained a commercial facility into the future.
“The Government should work with port-users to ensure that no users face additional costs or disadvantage during the sale process,” he said.
The Government will now call for expressions of interest in the assets, followed by a request for proposals from shortlisted bidders.
The Government would also soon announce details of the first round of land sales.
The Premier would chair the process of assets and land sales, with detailed work undertaken by Treasury through an asset sales taskforce.
Dr Nahan, Finance Minister Dean Nalder and Lands Minister Terry Redman will play major roles in the ongoing process.