The Australian Competition and Consumer Commission is urging governments to maximise competition, not sale prices, when selling state assets.

The ACCC believes governments are incentivised to cap competition against an asset that is being sold in order to maximise the sale price.

However, the ACCC’s chairman Rod Sims says that will not work for the benefit of consumers or taxpayers in the long run.

“In privatising to maximise proceeds my worry is that the government will sell them in ways that give the buyers the ability to raise prices in the future,” he cautioned.

The New South Wales Government is currently talking up the partial sale of its electricity poles and wires to raise funds for infrastructure projects.

Mr Sims says recent NSW Government sales, such as the ports of Botany and Newcastle, have shown potential problems in the way sales are being handled.

“We’ve got concerns with some of the port sales where we understand there’s been competition between ports to maximise the proceeds,” he said.

“In the case of energy, our concern is with the way the generation assets have been sold where, in essence, they seem to be getting sold to the big three retailers rather than facilitating a more competitive electricity market.”

Around $60 billion of government assets are set to be sold in the coming years as the Abbott Government pushes states towards using the funds to build new infrastructure.

Mr Sims’s views should be of concern to governments as some of their asset sales, particularly in the energy market, will have to be approved by the ACCC.

The approach of governments toward asset sales is a key them in a speech written for the CEDA State of the Nation Conference being held today in Canberra, in which the ACCC is calling for Australia to reinvigorate its “competition culture.”

In highlighting what the key issues will be in the ACCC’s submission to the Harper review, Mr Sims says the apparent softening of competition in Australia is hampering the economy.

“While the ACCC recognises competition laws must strike a careful balance, and not inhibit healthy competitive behaviour, if competition laws are too weak there are large efficiency and welfare losses from systematically poor conduct,” he warned.

Unsurprisingly has wants more power for the regulator.

“The inability of the ACCC to initiate market studies using our information gathering powers means we are out of step with overseas regulators, and Australia is losing an opportunity for a continuing competition focus on particular sectors and activities,” Mr Sims argued.