A $16 billion asset sale in Western Australia has been cancelled following Labor’s win at the state election at the weekend.

The sale included the state’s electricity generator Western Power for about $12 billion and Horizon Power’s transmission and distribution assets in the Pilbara.

The sales were announced at the state budget last year by the now outgoing state Liberal government as a way of reducing debt and funding future infrastructure needs.

Western Australia is on its way to a record $3.9 billion deficit this financial year with net debt forecast to hit $40 billion by 2019.

The end of the mining boom has slowed economic activity in Western Australia meaning fewer tax dollars and smaller royalty payments from the resources sector.

Some states have been on a run of assets sales to pay down debt, balance budgets and recycle proceeds into new infrastructure.

In NSW, the state will get $16.189 billion for a partial lease of power network Ausgrid to an all-Australian consortium of super funds, IFM Investors and AustralianSuper.

In Western Australia, the new premier, Labor leader Mark McGowan, confirmed he wasn’t going to sell off Western Power because “it’s the wrong thing to do”.

Before the election, he said: “Under no circumstances will we sell Western Power, Water Corporation or Fremantle Port. That is a core, iron-clad, non-negotiable commitment.”

Labor is expected to have between 38 and 41 members in the 59-seat Legislative Assembly.

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