THE spending growth of the state government remains at high levels, putting increased pressure on Premier Colin Barnett and his treasurer, Troy Buswell, to rein in costs.
THE spending growth of the state government remains at high levels, putting increased pressure on Premier Colin Barnett and his treasurer, Troy Buswell, to rein in costs.
The latest government figures show underlying expenditure grew 9.9 per cent for the months of July and August, a whisker below the double-digit growth which earned the previous Labor regime a rap on the knuckles from business when the revenue side of the equation was much stronger.
Actual expense growth for the period was 22 per cent, an amount the treasurer said was driven by several extraordinary items, including federal stimulus spending.
Mr Buswell said a general government sector operating deficit of $687million was recorded for the two months to August 31 2009, down from the $73 million operating surplus outcome for the same period last year.
“Revenue during the first two months of this year was $110 million lower than at this time in 2008-09. This fits with the revenue trend seen through most of the second half of 2008-09,” he said.
The seeming inability to control costs brought the ire of the opposition, which has been critical of the government’s May budget. In August, Labor treasury spokesman Ben Wyatt called for a revised mini-budget to account for several big-ticket items he claimed should have been included in the earlier forecast.
Mr Wyatt highlighted an accelerating deficit and an admission from the Department of Treasury and Finance that expenses are “unusually high”.
“The figures are in stark contrast to the 2009-10 budget forecast of a $409 million surplus,” he said.
The spending growth in the first two months of this financial year appears at odds with state demands for the bureaucracy to cut outlays by 3 per cent.
It also comes just ahead of an expected release by the government-initiated Economic Audit Committee report.
The committee is expected to recommend sweeping changes to government spending, and the Chamber of Commerce and Industry WA is calling on the government to urgently streamline the public sector on the back of the report.
The state’s peak business lobby group has leapt on the issue again in recent days, returning to its constant theme that reform of the public sector is urgently needed to ensure WA taxpayers receive better value for money and higher standards of service delivery.
CCIWA wants the government to commit to implementing the committee’s recommendations when they come out. It said the state government has promised to curb unsustainable levels of spending, and create a modern and service-orientated public sector.
Mr Buswell may well be hoping that a return to boom-like conditions would save the state from a deficit but simply referred to the lag between rising investor confidence and real revenue flowing into Treasury coffers.
“This report is a timely reminder that Western Australia’s renewed business confidence and major forward investments will take time to flow through to the bottom line,” he said.
“The government will continue to maximise taxpayers’ money through initiatives such as ‘value for money’ audits in health, education, environment and commerce; wages policy and full time equivalent ceiling.
“This includes finalising the implementation of the corrective measures announced in the May state budget and a further suite of corrective measures due to be announced in the mid-year review.”
Mr Buswell said a certain amount of caution was required in determining the full-year impact from two months’ worth of figures, however he did reveal that much of the additional $290 million in expenditure was due to higher wages provided to health and education workers.
GESB questions
THE festering issue of the privatisation of state superannuation fund manager GESB continues to be a source of constant niggle for the government.
Already, Treasurer Troy Buswell has expressed his anger at the salary paid to GESB CEO Michele Dolin at a time when he has been seeking austerity.
Mr Buswell has an inquiry running, which is understood to be looking at what options he has to resolve the situation – meaning that public servants have yet to access the choice most of the state’s working population has when it comes to superannuation.
In state parliament late last month, the Greens’ Giz Watson kept the GESB ball in the air, asking the following questions:
(1) What is the current dollar value of the remuneration package for the CEO and for each of the individual members of the executive?
(2) How much of this expense is being paid by GESB members?
(3) What difference is there between the key performance indicators of the GESB management and key performance indicators of other public servants, who manage government controlled enterprises?
(4) What factors justified the 28 per cent salary increase in 2007-2008 as reported in the amended answers?
(5) How does the GESB management remuneration value compare with the broader Western Australian public sector and with SuperSA, RBF Tas, and QSuper public sector funds which provide similar services to members as GESB, but do not operate in a choice of fund environment?
(6) Has the remuneration of the GESB chairman and other board directors increased in the past three years?
(7) If yes to (6), what was the percentage increase by year?
(8) Why have GESB’s administration costs doubled over the past five years?
(9) How much in total did GESB spend on consultants in 2008-09?
(10) Please identify the consultants and the amounts paid to each of them?
(11) How much in total did GESB staff and board spend on interstate and overseas travel (including travel expenses) in 2008-09?
(12) Please explain why in June 2009, GESB was unaware of the percentile increase in remuneration paid to its management in 2007-2008, and two years prior?
Many in the state’s huge financial planning industry will be very interested in the answers to these questions.
Energy issues
CONTINUING on the theme of questions in recent times, Labor energy spokesperson Kate Doust also jumped in, quizzing Energy Minister Peter Collier on state power retailer Synergy’s recent decision to award at least 638 megawatts of supply contracts to Verve Energy.
Ms Doust asked several questions about the impact of the decision on private investment in power generation.
“Does the minister acknowledge that this decision benefits the campaign by Eneabba Gas to supply power in the mid-west?” Ms Doust asked in questions without notice last month.
“Given that Mr Peter Oates completed the government’s review into Verve Energy and therefore had access to financial documents relating to this decision, while also being a director and shareholder of Eneabba Gas, does the minister now acknowledge the gross conflict of interest in employing him as the government’s energy consultant?”
Mr Collier responded that Mr Oates has absolutely nothing to do with Synergy’s supply procurement process.
“I make that quite clear: he has nothing whatsoever to do with it,” he said.
“Verve won the tender. There was nothing clandestine about it; it is part of the displacement process.”
