Andrew Constance: “Half the dividends will keep coming to government.” Photo: Michel O’SullivanNSW election 2015: full coverageSix MPs who have been “ICACtused”Big swing needed but Queensland shows the way
NSW Treasurer Andrew Constance has criticised as “intentionally misleading” claims by Labor that the government would lose $1.7 billion annually in dividends and other payments from the state’s electricity network businesses if they are privatised.
But Mr Constance has conceded the state budget would take an annual hit of potentially hundreds of millions of dollars should the Baird government be re-elected and get its transaction through the upper house.
In his campaign launch on Sunday, Mr Foley said the Coalition had a “risky scheme to sell the electricity network that delivers $1.7 billion in revenue each year”.
However, Mr Constance on Tuesday argued that Treasury forecasts diminishing returns to government to 2017-18.
In the December budget update, Treasury said the draft Australian Energy Regulator’s decision to slash the revenue electricity companies couldraise over the next four years meant payments to government would fall substantially.
The payment to government in 2012-13 was $1.7 billion. The Treasury forecast says the figure for this financial year is $1.2 billion, falling to $736 million in 2015-16, $642 million in 2016-17 and $407 million in 2017-18.
But Mr Constance acknowledged the government would still lose half of the payments under the government’s proposal to privatise 100 per cent of Transgrid and 50.4 per cent of Ausgrid and Endeavour Energy.
“Half the dividends will keep coming to government as a result,” he said. “We won’t know the full returns in terms of the dividends until we know the final decision of the Australian Energy Regulator.”
If the AER sticks to its draft ruling, this means the government could lose at least $200 million in payments by the end of 2017-18, which is likely to be the first full financial year after the transaction is completed.
Electricity companies wholly owned or controlled by private companies would be likely to also cease to pay tax equivalent payments to the state government as they would be required to pay Commonwealth tax.
Asked how the government would recoup the dividends and other payments, Mr Constance said spending on infrastructure from revenue from the transaction would “see this economy become more productive”.
But shadow Treasurer Michael Daley said the Treasury figures could not be relied on. “These forecasts by Treasury appear to me to be tailormade for the sale of these assets,” he said.
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