The McGowan Government believes WA’s finances are “heading in the right direction” despite a rise in WA’s budget deficit and debt.
Treasurer Ben Wyatt said while revealing the Mid-year Review on Wednesday that the review was a result of “responsible financial management”, reflecting the government’s aim of containing spending.
WA’s finances improved by $568 million over the forward estimates, despite the general operating deficit rising by $265 million to $2.6 billion for the 2017-18 financial year and state debt peaking at $42.8 billion by June 30 2021.
The increase reflects lower than expected taxation revenue, a delay in Commonwealth grant revenue for road projects and lower royalty income including the rejected gold royalty Budget repair measure.
The debt is $854 million lower than the $43.6 billion originally projected in the September Budget.
WA’s deficits are expected to decline in 2018-19 and 2019-20 before the state returns to a $926 million operating surplus in 2020-21.
Mr Wyatt said “a lot of hard work” still had to be done.
“We are heading in the right direction despite the challenges thrown at us by the Liberals and Nations in blocking a key budget repair measure and shielding profitable gold miners from paying their fair share.”
He said the government had managed to lower spending that contributed to the improvement in its finances.
“I am pleased to confirm that the Government has maintained the low expense growth trajectory laid down in the recent Budget.”
“When spending increases have been required, we have sought to reprioritise other outlays and the projections are in line with a lower forecast net debt outcome by June 30, 2021 compared with the Budget.”
However, the Opposition said the government had delivered a record debt and deficit despite an increase in revenue.
“The Labor government was elected on a platform of fixing the State’s finances and instead they have delivered a significant deterioration,” Shadow Treasurer Dean Nalder said.
He said it was unacceptable to blame the failed gold tax levy for debt and deficit because the government was expecting to receive $782 million in revenue over the forward estimates.
“This windfall includes iron ore royalties up to $483 million, payroll tax up to $96 million and $141 million from other royalties,” Mr Nalder said.
“Revenue is up $780 million so to blame the gold tax disallowance is simply disingenuous.”
“The McGowan government has no excuses.”