Treasurer Ben Wyatt has today released the December 2018 Quarterly Financial Results Report, with the general government sector recording an $83 million operating surplus for the first half of 2018-19.
This figure represents a $784 million turnaround on the $701 million operating deficit recorded for the same period in 2017-18, a testament to the financial discipline of the McGowan Government.
While an operating surplus for the period is welcome, timing differences between revenue and expense items may not result in a full-year surplus in 2018-19. For example, the last time a first half operating surplus occurred in December 2014, the net operating position at the full-year 2014-15 was a deficit of $431 million.
General government sector revenues for the six months to December 31, 2018 were $1.1 billion (or 8.1 per cent) higher than the same period last year. This was primarily driven by Commonwealth grants (up $950 million) and royalty income (up $339 million), partly offset by lower dividends from public corporations (down $430 million).
General government expenses were $346 million (or 2.4 per cent) higher than December 2017. This was due to higher salaries expenditure (up $106 million or 1.8 per cent), mostly on key frontline services including health, education and law and order, higher capital transfers (mainly grants, up $98 million), and higher depreciation costs (up $67 million).
Had the average expenditure growth of 6.4 per cent of the previous Liberal National Government continued, the net operating position would have remained in deficit at almost $1.5 billion.
The December 2018 report is available from the Department of Treasury’s website at https://www.treasury.wa.gov.au
As noted by Treasurer Ben Wyatt:
“Since coming to office two years ago, the McGowan Labor Government has worked hard to turnaround the State’s finances through containing expenditure growth, while prioritising key services to Western Australians.
“The December 2018 quarterly outcome is further proof that under the stewardship of the McGowan Government the State’s finances are continuing to improve.
“While I am pleased to be releasing a surplus result for the six months to December 2018, we still have a great deal of work to do to consistently achieve full year operating surpluses, which will enable us to pay down State debt.
“We are confident that our continued responsible financial management will result in a return to solid operating surpluses from 2019-20, and importantly, place the State’s net debt position on a downward trajectory.”
