Giddings not for turning on sell-off

TASMANIA has come out fighting against the Abbott government's privatisation agenda, accusing the PM of "blackmailing" it.

TASMANIA has come out fighting against the Abbott government's privatisation agenda, accusing the Prime Minister of "blackmailing" it and other states into selling off state assets.

Labor Premier Lara Giddings yesterday said the Coalition was effectively threatening to strip her cash-strapped state of vital infrastructure funds unless it surrendered valued state-owned businesses.

"Tony Abbott is placing undue pressure on Tasmania to sell off key assets like the (power generator) Hydro and (power transmission company) Transend, as well as on local government to sell off TasWater -- or we will all miss out on crucial infrastructure funding," Ms Giddings said.

"This is an outrageous case of blackmail. The commonwealth has an obligation to fund public infrastructure, regardless of what states and local government choose to do with assets that are owned by the taxpayer.

"We're not going to cop Tony Abbott's bully-boy tactics. We're going to fight to keep Tasmania's public assets in public hands."

The comments come after The Australian revealed Infrastructure Australia had stepped up its push for public asset sales, arguing in a paper that governments could be at least $64 billion better off even though they could no longer raid their utilities for dividends.

The IA report identified Tasmanian assets including Hydro, TasWater and Transend as suitable for privatisation.

A concern among the states has been that selling key assets would deny them potentially lucrative revenue streams.

But Joe Hockey indicated a willingness to address the issue of states losing earnings at last year's meeting with state treasurers.

NSW Finance and Services Minister Andrew Constance yesterday entered the fray, declaring the strategy of leasing Port Botany and Port Kembla, refinancing the Sydney desalination plant and selling electricity generators had allowed the state to tip funds into new projects.

But Ms Giddings said she had informed Mr Abbott and the Treasurer the only asset Tasmania was willing to sell was the customer base of power retailer Aurora Energy.

With an election due in March, Ms Giddings also sought to use the federal privatisation agenda against the state Liberal opposition, led by Will Hodgman.

Last night, Finance Minister Mathias Cormann said the government was "unashamedly focused" on building a stronger economy.

"The Tasmanian economy has suffered more than any other from years of bad anti-growth Labor-Green governments," he said.