The McGowan Labor Government continues to deliver on its promise to repair the State’s finances, with the WA Treasury estimating a surplus next financial year of $1.02 billion in today’s Mid-year Review.
The successful resolution of the GST debate is also reflected, with top-up payments from the Commonwealth now expected to total $2.4 billion over the next three years to maintain the 70 per cent floor – $700 million greater than the $1.7 billion figure announced just last month.
The McGowan Labor Government has taken a disciplined approach to this additional revenue, and has allocated all of the estimated $2.4 billion in Commonwealth top-up funding to the Debt Reduction Account.
Overall, the responsible financial management is highlighted by the State’s net debt position improving by $3.7 billion since the Budget in May, delivering interest cost savings of $532 million over the next four years. Total public sector net debt is now forecast to peak at $37.9 billion at June 30, 2020, compared to the $41.1 billion expected under the previous Liberal National Government for the same year.
Expense growth continues to be contained and remains at historically low rates across the forward estimates period, averaging just 1.3 per cent per annum. In total, expenses have been revised up by only $289 million (0.2 per cent) across the forward estimates period compared to the 2018-19 Budget.
While the Mid-year Review highlights low rates of expense growth, there are several targeted new spending initiatives aimed at supporting the economy, creating jobs, and delivering high-quality essential services to the community.
These include the recently announced $421 million increase in Keystart’s borrowing limit (which will assist an additional 1,100 homebuyers), and $153 million for the State to participate in the National Redress Scheme for survivors of institutional child sexual abuse.
Infrastructure investment in METRONET projects is $703 million higher than at Budget-time, which includes a $300 million provision for projects under development, including the Morley-Ellenbrook Line.
The 2018-19 Mid-year Review is available from the Department of Treasury’s website at https://www.treasury.wa.gov.au
As noted by Treasurer Ben Wyatt:
“This Mid-year Review is proof that the McGowan Labor Government’s responsible approach to economic and financial management is delivering for all Western Australians.
“To turn things around from the record debt and deficits we inherited to now have such a healthy surplus predicted is testament to the financial discipline which has been shown by every member of the McGowan Government.
“Getting the Budget back into surplus from 2019-20 will greatly assist in managing the debt levels we inherited from the former Liberal National Government – with a substantial $532 million saving in interest payments.
“We have had some great successes this year and there has been plenty of cause for optimism for the future with a lot of the data that has come out in 2018, and to now see that Treasury has forecast such a surplus is truly the cherry on top of a stellar year of financial management.
“Of course, the Government will go through a Budget process which will reflect our priorities and also react to circumstances between now and Budget time, but we are at last starting from a more sustainable position. However, our fiscal restraint will remain as important as ever as we look to pay down the record debt left to us by the Liberals and Nationals.”
