25/09/2008 - 16:25

Buswell to tighten WA's spending growth

25/09/2008 - 16:25

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Treasurer Troy Buswell has announed the newly elected government will need to reign in excessive spending growth, inherited from the previous Labor government, following the release of the Annual Report on State Finances (ARSF) this afternoon.

Buswell to tighten WA's spending growth

Treasurer Troy Buswell has announed the newly elected government will need to reign in excessive spending growth, inherited from the previous Labor government, following the release of the Annual Report on State Finances (ARSF) this afternoon.

Prepared by the Department of Treasury and Finance in accordance with the requirements of the Government Financial Responsibility Act 2000, the ASRF outlines the state's financial results for the 2007-08 financial year and compares these results with the forecasts contained in the May 2007 Budget.

The ARSF shows that in 2007-08, the State recorded:

- a general Government sector operating surplus of $2,569million. This compares with the $2,303million operating surplus recorded in 2006-07, and the original (May 2007) Budget estimate of $1,453million;
- strong growth in general Government revenue of 10.5 per cent, notwithstanding a marked softening in housing market activity and associated stamp duty revenue in the second half of the financial year;
- general Government expense growth of 10.3 per cent, which follows growth of
8.6 per cent in 2006-07 and compares with budgeted growth of 4.6 per cent;
- a capital works program of $6billion, up $269million on the 2007-08 Budget estimate, and a substantial $935million (or 18 per cent) higher than the 2006-07 program;
- net debt of $3.6billion at June 30, 2008 for the total public sector, up $650million on the record low outcome a year earlier, but significantly lower than the original Budget estimate of $5.8billion; and
- a net debt to revenue ratio for the total non-financial public sector (a key measure for the State's triple-A credit rating) of 19 per cent, up slightly from the record low outcome for 2006-07 (17.9 per cent).

Mr Buswell said while these are positive financial results for the State, they highlight the work that's needed to be done to reign in spending growth.

"Expense growth in 2007-08 was the highest on record, and is the seventh consecutive year in which the previous Government breached its expense growth target," he said.

"The Government is committed to implementing the three per cent efficiency dividend announced in the Pre-election Financial Projections Statement, and to finding further savings and efficiencies as part of the Economic Audit announced during the election campaign.

"It is clear from the new forward projections that there can be no avoiding an urgent and aggressive reform agenda for State finances.

"Without it, the State's financial position is most likely unsustainable."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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