ELECTRICITY bills would be cheaper if Western Power was sold, Australia’s competition chief has declared in a repudiation of Labor and the unions’ anti-privatisation campaign.

As Labor leader Mark McGowan warned yesterday privatising the electricity generator would push up power prices, Australian Competition and Consumer Commission chief Rod Sims argued a private operator would be able to trim waste to the benefit of households and businesses.

“If Western Power was privatised that would lower power prices because the new owner would be more efficient,” Mr Sims said.

The final week of the election campaign is set to be dominated by a re-elected Barnett Government’s plan to sell Western Power and pour the proceeds into infrastructure and debt reduction.

Lined up against the policy are Labor, the unions, the Greens and Pauline Hanson’s One Nation, which may win the balance of power in the Upper House.

Mr McGowan yesterday visited a home in the key seat of Swan Hills to give an “ironclad guarantee” Labor would keep Western Power in public hands, saying its sale would be a mistake.

“Prices will go up if Western Power goes into private ownership. That’s a fact,” Mr McGowan said.

“It falls into private ownership, the owners want to milk every last cent out of it and the way you milk every last cent out of it is you put prices up on users.”

Mr McGowan also claimed a privatised Western Power would be bought by foreigners, jobs would be cut, service standards would drop and taxpayers would lose the income from the utility.

But Mr Sims, who in January scolded unions for twisting one of his speeches to justify their anti-privatisation agenda, denied consumers would suffer from Western Power’s sale.

He was confident electricity bills would go down because a regulator would continue to oversee prices.

A new owner would earn a financial return by turning Western Power into a leaner operation with some savings to flow through to consumers. “You have a very good (regulatory) regime in place,” Mr Sims said.

“The regulator would make sure those efficiencies would result in lower prices.

“The new owner would not be allowed to just increase prices.”

While Mr Sims hit back over power prices, a report commissioned by two unions suggests Western Power’s privatisation would do long-term damage to the State Budget.

Compiled by the Orion Consulting Network, and to be released today, the report warns the way the Liberal Party wants to sell 51 per cent of the power company has long-term fiscal ramifications.

The Government claims it will reap $11 billion from the sale.

Of that, $3 billion is earmarked for infrastructure spending while the remaining $8 billion is private debt refinancing that will move the liability off the Government’s books.

The consultancy found that because of restrictions being imposed on the sale, such as effective government control, the sale may only produce $1 billion. Once the loss of cash flow to the Government is taken into account, the proceeds could be wiped out within four years.

“The Government’s proposed partial privatisation attempts to achieve two conflicting goals — maximise sale proceeds and offload $8 billion debt, while at the same time retaining a degree of control to ensure pricing, employment and Australian ownership are protected,” it found.

“But there is an inherent trade-off between these two objectives.”