Public policy commentator Infrastructure Partnerships Australia has praised WA treasurer Mike Nahan’s move to support several key asset sales in order to pay off debts and fund new infrastructure.
Nahan, who revealed the state’s budget last Thursday, says asset privatisation can raise $16 billion to help pay down debt and fund Perth’s new rail line to the airport, and long-talked-about MAX light rail line.
He wants to sell major electricity distributor Western Power, and the poles and wires owned by Pilbara electric business Horizon Power.
Those sales would add to the proposed sale of Fremantle Port, the Utah Point bulk terminal at Port Hedland, and the state-owned TAB betting agency.
$11 billion of the $16 billion Nahan expects to raise would go towards paying off the state’s debts, which are estimated to pile up to $40.1 billion by 2019/20.
The remaining $5 billion would be poured into an Infrastructure Fund, to prop-up a massive $23 million asset investment program over the next four years.
The plan was welcomed by Infrastructure Partnerships Australia chief executive Brendan Lyon, who called for bipartisan support to avoid a further deterioration of the state’s credit rating.
“The budget sees WA emerge from the boom broke and in desparate need of a major restructure across the government sector,” Lyon said.
“The state’s crushing debt means infrastructure spending will fall by 13% compared to last year’s budget, just as WA needs public infrastructure investment for short-term employment and long-run growth.”
He urged the state’s Opposition not to rule out asset recycling ahead of next year’s state election.
“Queensland’s current fiscal and economic woes are a very important case study for the WA Opposition,” Lyon argued.
“The anti-asset recycling position by Queensland’s Labor Government sees that state unable to do anything to soften the landing from the resources capital boom.”