Hockey's $600m carrot to sell state assets

Treasurer Joe Hockey and Prime Minister Tony Abbott will be in Launceston today.
Treasurer Joe Hockey and Prime Minister Tony Abbott will be in Launceston today.

FEDERAL Treasurer Joe Hockey has offered Tasmania $600 million to sell the state’s energy assets.

Mr Hockey told The Examiner that if the Hydro and the new TasNetworks were sold for an estimated $4 billion the state would qualify for a 15 per cent inducement.

He is expected to reaffirm the offer when he and Prime Minister Tony Abbott hold  a quarterly economic forum with the state government and business leaders in Launceston today.

‘‘We would contribute 15 per cent of the sale proceeds, so if they sold the utilities for $4 billion they would have that money plus $600 million from us to invest in new infrastructure,’’ Mr Hockey said.

‘‘You don’t lose the Hydro. It’s still there delivering power [by new owners] but the state would have a $4.6 billion windfall to invest in new infrastructure such as ports, shipping, roads and rail.

‘‘It would kick-start the state’s economy with a shot of adrenalin.’’

The power utilities in 2013 had total assets of $9 billion and, after liabilities, net assets of $3.4 billion. They would be expected to sell for more than $4 billion.

Last night state Treasurer Peter Gutwein said it was a Liberal election promise to rule out major asset sales, other than Aurora Energy’s old customer data base, which he said the state would qualify for under the 15 per cent inducement arrangements.

‘‘In relation to other asset sales, we went to the election promising not to sell any other government assets, and that remains our firm position,’’ Mr Gutwein said.

The Abbott government’s $6 billion Assets Recycling Fund was established to encourage states and territories to sell assets for new spending on infrastructure.

The legislation has stalled in the Senate, but the necessary funds may be sourced from elsewhere.  

Mr Hockey said the pool of funds was available on a first-in, first-serve basis.

Today’s economic forum in Launceston is expected to deal with options to assist the state with its shipping problems, road infrastructure and the state’s dairy industry.

Mr Hockey said the $400 million earmarked for the Midland Highway was not a static figure and could be increased, depending on the task.

He said his government was ‘‘absolutely committed’’ to the freight and passenger vehicle subsidies.’’

They’ve delivered $2 billion for Tasmania to date and they will deliver another $2 billion over the next 15 years,’’ he said.

In 1998 the Howard government offered the minority Rundle Liberal government $100 million to sell Tasmania’s power utilities but Tasmanians strongly opposed any sale. The Liberal government took a total energy asset sale to the election and lost.


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