09/05/2013 - 15:52

Buswell warns budget under pressure

09/05/2013 - 15:52

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Buswell warns budget under pressure

Western Australian households face an extra $218 a year in fees and charges as Treasurer Troy Buswell warned of a “significant erosion” of the state’s revenue base.

Mr Buswell said royalty revenue and payroll and land tax receipts were lower than anticipated, with the government set to introduce "short-term belt-tightening" measures and longer-term structural reforms in the coming months to keep the budget in surplus.

However he refused to concede that the government should shoulder the blame for the shortfall, despite expenditure outstripping total revenue growth by more than 15 per cent during the Barnett government’s first term.

The treasurer instead pinned the blame on spending pressures in the health and education sectors driven by the state’s rapid population growth.

“This is a very tough fiscal environment, certainly the most challenging fiscal environment that I’ve encountered,” Mr Buswell told reporters.

“We have downward pressures on our revenue flows and we have significant upward pressure on spending, particularly in those areas of spending that are directly influenced by population growth.”

Mr Buswell said he was confident the government would still deliver a surplus for 2012-13 but said it would not be of the magnitude of the $241 million forecast in Treasury’s pre-election fiscal projections statement.

The government will deliver a “fiscal action plan” in the coming months which will seek to ease pressure on the budget.

“If we do nothing, in a decade or so we could look like Queensland does at the moment with deficits approaching $2 billion and debt somewhere between $40 billionand $50 billion,” Mr Buswell said.

“We will have to look at structural reform across a whole range of areas.”

The treasurer took the unusual step of announcing household fees and charges prior to the release of the budget, which this year is set to be delivered in August.

Electricity prices will increase by 4 per cent, or around $58 a year from July 1, which Mr Buswell said was within the parameters of the government’s election pledge to keep prices at or around the rate of inflation.

Water tariffs will jump 6 per cent and public transport fares will increase by 5 per cent.

Opposition leader Mark McGowan said Premier Colin Barnett had attacked family budgets because he was “incapable of managing his government’s budget”.

“Today’s news will be devastating for families already struggling with skyrocketing cost of living,” he said in a statement.

“Under Mr Barnett’s watch, the cost of electricity has now increased by close to 70 per cent and the cost of water by 63 per cent.”

Mr Barnett told reporters this week he hoped next week’s federal budget would include funding for the state government’s urban transport plans.

The government announced $5.2 billion worth of spending commitments at the state election, including a $2 billion section of the Perth-to-Darwin highway and a $1.9 billion light rail plan.

It was revealed late in the campaign that the government planned to seek Commonwealth funding for about half of the combined $4.8 billion cost of its key transport promises.

“I think we delivered a modest set of spending commitments during the state election,” Mr Buswell said.

“I expect the Commonwealth will play a role and the private sector will play a role somewhere in that equation.”

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