WA misses out on billions in federal infrastructure funding after fund axed
Posted
Western Australia has lost the opportunity to apply for billions of dollars of Commonwealth infrastructure funding after an incentive fund was axed in the federal budget.
The Federal Government scrapped the asset recycling fund, a $5 billion initiative announced by former treasurer Joe Hockey in the 2014 budget as a way of encouraging states to sell public assets.
But while other states like New South Wales and Victoria have sold assets and received billions of dollars from the fund, WA has struggled to privatise key assets like Fremantle Port and the TAB, and take advantage of the fund.
It allowed states to apply for a share of the fund on a first-come, first-served basis after they had sold a public asset.
They could receive an extra 15 per cent of an asset's net sale price to invest in a new, productive asset.
Analysts said Western Australia could have reaped billions of dollars from the fund if it had privatised assets like Western Powers poles and wires or Fremantle Port.
For example, estimates provided by Infrastructure Partnerships Australia show that WA would have qualified for $2 billion if it sold Western Power's poles and wires for $15 billion, and $262 million for a $2 billion sale of Fremantle Port, while a $700 million privatisation of the TAB could have reaped $79 million from the fund.
Opportunity missed: analyst
John Nicolaou, Perth director of economic consultancy ACIL Allen, said the WA Government had missed an important opportunity to take advantage of the scheme to fund new infrastructure.
"Imagine if they had gone to the Commonwealth, sold Western Power and, as a result, seen up to $2 billion come back to the state," he said.
"That would have financed a light rail project or further investment in rail or road infrastructure through the state."
Chamber of Commerce and Industry chief executive Deidre Willmott said it was disappointing the fund had been wound up and that WA had missed out.
"New South Wales and Victoria were ready to go and they've been able to take advantage of that. It's taken us a lot longer to get our assets ready for sale," she said.
Premier not worried
But Premier Colin Barnett said he was not concerned that WA has missed out on the funding.
"We've talked to the Commonwealth about that but we're not having policies on assets in Western Australian being run out of Canberra."
Mr Barnett said he would not be rushed on asset sales and would sell them for the right reasons.
"The decisions on privatisation we will take, as a State Government, on merit," he said. "We are not going to be seduced into them by offers of money as such.
"So if we privatise the TAB, which we should, that is done for good policy reasons.
"Similarly if we privatise Western Power after the next election, if we are re-elected, that will be for sound reasons."
Mr Barnett has said any decision to sell poles and wires would be included in next week's state budget.
Topics: budget, privatisation-and-deregulation, government-and-politics, federal-government, federal-parliament, wa
