WA’s finances can expect a return to the black a year earlier than expected, with the McGowan government revealing substantial surplus in the state’s books next financial year.
The State Government revealed a $1.02 billion surplus in its mid-year review on Thursday, following Premier Mark McGowan’s earlier suggestions that WA could revel in a substantial surplus sooner.
Total public sector net debt was forecast to be $42.8 billion by June 2021, down $854 million since the Budget.
It will be the first time the state has been in surplus in six years.
WA has already had a better than expected deficit for the last financial year at $618 million dollars, improved from a projection of $1.32 billion estimated earlier this year.
Treasurer Ben Wyatt said has delivered on its promise to repair the state’s finances.
“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,” Mr Wyatt said.
“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.
The government said WA’s responsible financial management was highlighted by its net debt improving by $3.7 billion since the Budget, with interest savings of $532 over the next four years.
Total public sector net debt is now expected to peak at $37.9 billion in June 2020, compared to $41.1 billion under the previous Liberal National government.
Overall spending is continuing to be restrained at 1.3 per cent each year for the next four years with expenses revised up by 0.2 per cent by $289 million.
“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,” Mr Wyatt said.
“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.”
Budget Does Nothing for WA – Opposition
Opposition leader Mike Nahan said the government’s books were improving but at the expense of households.
“Part of the improvement in the budget indeed a significant one is due to substantial increases in fees and charges,” Mr Nahan said.
“$700 increase per household continues in this budget.”
However, the government revealed there would be spending initiatives for the community including a $421 million increase in Keystart’s borrowing limit and $153 million for WA to participate in the National Redress Scheme.
Mr Nahan warned there was a “substantial downgrade in all aspects of the domestic economy” and said that it would continue in the future.
“The update predicts that the economy will slip back into recession next year and continue to do so,” he said.