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Barnett government announces sale of Western Power

Brendan Foster

The state government will sell 51 per cent of Western Power with the rest to be publicly floated on the stock exchange.

Premier Colin Barnett announced the controversial plan on Wednesday, saying he expected the sale to generate $11 billion, with $8 billion to pay down debt and $3 billion to be allocated into a "next generation account".

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State Government to sell Western Power

The State Government will sell 51% of Western Power. Premier Colin Barnett says electricity bills will not change and there will be no forced redundancies as a result of the sale. Vision: Nine News Perth.

The sale is expected to go ahead in late in 2017 or early 2018.

The $3 billion will be poured into schools and tafes, as well as infrastructure projects and improving electricity supplies in country areas.

"These projects will create thousands of jobs for builders, tradies, construction workers, engineers, technology providers, and their support staff in communities throughout Western Australia," Mr Barnett said.

Treasurer Mike Nahan said the sale of Western Power will not see cost increases for WA consumers or a ny reduction in service.

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"Under the 51 per cent public float proposal, the state government will remain the largest shareholder with indicative targets of 30 per cent of shares being sold to Australian superannuation funds and 20 per cent to mum and dad and retail investors, including Western Power employees," Mr Nahan said.

"This model will address any national security concerns about foreign ownership. Western Power will not be foreign owned or controlled."

The sale is a hot election issue, with Labor, unions and seemingly the public opposed to the sale.

Opposition Leader Mark McGowan said the sale does not make economic sense, and promised that Labor will fight it 'every step of the way'.

"Colin Barnett and Brendan Grylls will privatise Western Power. I won't. A McGowan Labor Government will keep it in public hands, where it belongs," he said.

"Mums and Dads already own Western Power. If it's sold, family power bills will go up, service quality will go down, and jobs will be lost.

"Western Power belongs to all Western Australians. If we let Colin Barnett and Brendon Grylls sell it, we will forever lose its ongoing revenue that goes a long way to paying for our schools and hospitals."

Only two weeks ago Mr Barnett was heckled and booed outside Parliament House by a massive union gathering after he spoke about the need to sell the utility.

"I think I got a fair reception. Most people listened," he said at the time.

"You don't expect deathly silence at a union rally outside Parliament House.

"They're not going to cheer a Liberal leader, are they?"

The privatisation of Western Power is expected to be a big election issue when WA goes to the polls next March.

And Labor has vowed it won't sell one of the state's biggest assets.

In July, the Premier wasn't convinced selling off Western Power was such a good idea, but was convinced by Treasurer Mike Nahan to put it on the chopping block.

However, Mr Barnett said no decision would be made on the sale before the March election.

"And indeed, I'm going through a process now when I meet people, I might ask them about that, they might raise it," Mr Barnett told 6PR radio at the time.

"We intend to have a number of public meetings as a government between now and the election, and that will be one issue - I'll try and gauge public opinion.

"Because if we don't get broad public support, then it won't happen.

"You're not going to get anywhere by trying to force it on people."

Mr Barnett had previously said he understood householders were concerned about higher electricity prices if Western Power was sold, but claimed increases would be exactly the same under government or private ownership because the utility was bound by national regulation.

If it were sold in part, taxpayers would retain some dividends, but if it were to remain wholly government owned, they would have to fund future infrastructure builds, Mr Barnett said.

"There's a political risk but it is in my view the right thing for Western Australia," he said.

A full sale could reap between $12 billion and $16 billion, according to a recent Chamber of Commerce and Industry WA report.

The Premier said about $8 billion would be used to retire state debt, with the remainder going towards new capital works.

The vast majority of respondents to recent ReachTel polls in the safe Liberal-held seats of Riverton and Wanneroo were against the planned sale.

- with AAP

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