Ausgrid rejection undermines Western Power privatisation

Friday 12 Aug 2016

The Turnbull Government’s rejection of the sale of New South Wales’ electricity distribution assets to Chinese interests is a major blow to the Western Power privatisation plans of Colin Barnett and Brendon Grylls.

The Liberal and National Parties are banking on generating $15 billion from the sale of Western Power and are already linking proposed projects to the successful sale, as a part of a new pre-election spending spree around Western Australia.

However, Federal Treasurer Scott Morrison’s determination that the sale of New South Wales’ poles and wires to interests owned by the Chinese government raises serious questions over whether the Barnett Government could find a buyer for Western Power at all, let alone raise the $15 billion it is already spending.

Electrical Trades’ Union WA Branch Secretary Les McLaughlan said policy around the sale of Western Power was a mess.

“The Liberals and Nationals have no idea what they are doing, in relation to Western Power,” he said.

“They are clearly making people redundant, to make it more attractive for sale, but that it where the policy consensus appears to end.

“Brendon Grylls is running around the state, promising to direct 100 per cent of the privatisation proceeds into a new National Party spending spree, whereas Mike Nahan is saying he will use the proceeds to pay off billions of dollars in debt, first.

“Brendon Grylls is touting the privatisation of Western Power as a solution to the Barnett Government’s budget deficit, but the truth is, even if you raised $15 billion and used all of it to retire debt, which is the opposite of what Mr Grylls is proposing to do, the interest saved each year would be less than the dividends and taxes Western Power currently generates for the state budget. This means the deficit would actually get worse.

“Now, we have a commendable decision from Scott Morrison that will seriously undermine the potential sale price of Western Power, by discouraging many potential purchasers of Western Power out of the market. Power assets in both Victoria and South Australia have been purchased by foreign companies in the past, but yesterday’s Ausgrid decision will make such investors far less likely to show interest in Western Power.

“Instead of looking to fund his new spending spree through the sale of public assets like Western Power and Horizon Power, perhaps Mr Grylls should extend his proposed mining tax to billionaires like Andrew Forest and Gina Rinehart, whose interests he seems intent on protecting above the interests of WA electricity workers and consumers.”