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CANBERRA: Australia’s opposition, leading in opinion polls before elections due next year, said it supports Prime Minister Julia Gillard’s policy of encouraging states to sell off electricity assets.

“We’re not in favor of governments owning businesses like this,” Shadow Communications and Broadband Minister Malcolm Turnbull said in an interview broadcast on Sky Television today.

Turnbull’s comments come a day after Australian Resources and Energy Minister Martin Ferguson told business leaders in Perth that state-government ownership of electricity assets in Western Australia, Queensland and New South Wales was hindering private investment. Soaring power bills have become a political issue in Australia, with Gillard this week saying state- government spending was mainly to blame rather than her new tax on carbon emissions.

Gillard, the nation’s first female prime minister, said Aug. 9 she’s seeking talks with state governments to find ways to restrict power-price increases. Australia on July 1 started charging about 300 of its largest polluters a fixed rate of A$23 a metric ton for greenhouse gases, with a market-based price scheduled to begin in 2015.

“The biggest barrier to greater investment in Western Australia’s energy infrastructure is government ownership,” Ferguson said. “It is crowding out private players who do not have the certainty that government policy won’t change and adversely affect them.”

Higher Prices

Ferguson said the result has been higher prices for consumers, which include operators of the resource projects that have driven the nation’s economic growth for the past decade. The lack of competition in Western Australia, which generates more than A$80 billion (US$84.6 billion) in mineral export revenue a year, has seen electricity prices surge 57% since September 2008, even as the state’s government suppressed prices by A$367 million in the year to June 30, Ferguson said.

“In an environment where consumers are facing significant electricity-price increases despite the government limiting the full pass-through of costs, there is a clear argument for increased competition in the market,” Ferguson said.

To compensate for increased power prices in Australia, which relies on coal for 80% of its energy, Gillard’s government has delivered cash handouts to lower- and middle- income earners. (Bloomberg/aph)