The WA opposition has continued its campaign to target the economic credentials of Premier Colin Barnett's government and his Treasurer Troy Buswell by releasing a gloomy review of the state's financial future.
The WA opposition has continued its campaign to target the economic credentials of Premier Colin Barnett's government and his Treasurer Troy Buswell by releasing a gloomy review of the state's financial future.
Based on public announcements, existing assumptions and new information Labor's treasury spokesman Ben Wyatt is predicting a more rapid than expected deterioration in the state's fiscal position, including a $300 million deficit this financial year, in contrast to the government's budgeted $409 surplus - a $700 million turnaround.
The projections continue to worsen after that, pushing out to a operating balance deficit of $600 million in 2010-11 and then blowing out beyond $1 billion for the two years following.
The opposition said it has focused on post-budget spending announcements and the rise in the Australian dollar to bolster its claims of government recklessness.
Using emotive language, Mr Wyatt renewed his call for the government to produce a mini-budget to embrace what he considers are major changes at a time of unprecedented economic turmoil.
The opposition treasury spokesman has held this line since soon after the budget was released in May, and today upgraded the attack with a document that mimics an official budget paper.
From a Labor standpoint, it is a clever move to attempt take debate to the economic high ground as well as shift attention from its own recent issues - the loss of Fremantle to the Greens in a by-election, the defection of Vince Catania to the Nationals and the decision by Alannah MacTiernan to seek pre-selection for a federal seat.
In aiming at the economy, it is attempting to put itself on a par with the government in an area where the Liberal National government has yet to prove itself.
However, the urgent case for a mini-budget will be lost on many.
Certainly there have been numerous spending commitments from the Liberals and Nationals since May, but what government doesn't do that?
Even in economically uncertain times, governments have to get on with business and many would have us believe that the global financial crisis is past its worse. And Mr Wyatt's figures show there is no economic crisis looming for the state in this financial year. We are not, thankfully, living acutely beyond our means, like California.
There is also the work of the government's Economic Audit Committee which has yet to produce its recommendations. It is likely that high-powered group will have policy proposals that will impact future budgets positively.
As for the Australian dollar: Treasury would be producing mini-budgets every week if the impact of our volatile currency forced a public re-engineering of the accounts every time it moved significantly. It's an issue that many in WA business have learned to live with.
Furthermore, we don't have a year to wait for an update. We already have a mid-year review due in a few months. That should paint a realistic picture in plenty of time for the opposition to prepare the groundwork for an election.
Mr Wyatt ought to be commended for doing his job. There is uncertainty and we should guard against becoming complacent, even if the state has been well insulated from the GFC.
However, few in business would agree that circumstances of the past three months are so extraordinary to warrant the rewriting of the state budget.
The announcement is below:
WA Labor today released its 2009-2010 Financial Projections Review to give Western Australians an honest update on the true position of the State's finances.
Labor Leader Eric Ripper and Shadow Treasurer Ben Wyatt said Labor had done the work to ensure there was an accurate, transparent and realistic assessment of the State's finances.
"The Barnett Government's State Budget was a dishonest document from the day it was released," Mr Ripper said.
"In an unprecedented move, and operating within the constraints of Opposition, Labor has produced an accurate and honest update for the Western Australian community.
"Labor's Review reveals the gross inaccuracies of the State Budget handed down by the Barnett Government on May 14 this year."
Mr Wyatt said Labor's review of the State's finances restored truth to the Budget process and clearly demonstrated the harmful impact of the rash spending decisions announced by senior Barnett Government ministers.
"The reckless, uncontrolled spending of the Barnett Government has placed an enormous burden on all Western Australians," Mr Wyatt said.
Changes to the financial projections for Western Australia include:
- $1.1billion in unfunded, unbudgeted capital expenditure;
- $353million in new operation spending;
- $2.2billion less revenue due to movements in key economic parameters;
- and Revenue black holes of $69million due to failed Budget measures.
"The Review has assessed the effect of key announcements since the 2009-2010 Budget was tabled. In reality, we have made a conservative estimate of the State's finances," Mr Wyatt said.
"Significant changes to external parameters, such as the exchange rate, have further depleted future revenue streams.
"Labor's Review estimates that the State Budget will be in deficit this financial year and the cumulative operating balance across the forward estimates should be revised down by $2.6 billion.
"The downgrading of the operating balance is already occurring, with reports from the Department of Treasury and Finance shedding up to $500million off the operating balance in 2008-2009.
"The blow-out of the Budget will place enormous pressure on the State's triple-A credit rating. If the triple-A credit rating is lost, the higher costs of borrowing will be directly passed onto all Western Australians."
Mr Wyatt said that Labor had worked hard to provide Western Australians with an accurate and honest update of the real state of the economy.
"The Government claims it is addressing efficiency yet expenses have accelerated with no improvement to services," Mr Wyatt said.
"The Government claims to be protecting local jobs, yet unemployment levels are the highest experienced in the State in at least six years.
"Never before has the Budget unwound so quickly, and the Barnett Government must be transparent and honest with the people of Western Australia.
"Treasurer Troy Buswell is quick to talk big but refuses to back his bluster with cold hard facts and meaningful action. Premier Colin Barnett and his Ministerial colleagues continue to spend at an unsustainable level and the Treasurer shows no sign of being able to reign in this spending or his colleagues."
