30/10/2009 - 17:14

Opposition label Buswell "incompetent"

30/10/2009 - 17:14

Bookmark

Save articles for future reference.

The state opposition have highlighted Treasurer Troy Buswell's "incompetency" and "loose financial management" in reaction to the latest financial reports from the state government indicating WA currently has an operating deficit of almost $700 million.

The state opposition have highlighted Treasurer Troy Buswell's "incompetency" and "loose financial management" in reaction to the latest financial reports from the state government indicating WA currently has an operating deficit of almost $700 million.

A general government sector operating deficit of $687 million was recorded for the two months to August 31, 2009, down from the $73 million operating surplus outcome for the same period last year.

Opposition treasurer Ben Wyatt said the figures reveal an accelerating deficit and an admission from the Department of Treasury and Finance that expenses are 'unusually high'.

"Today's figures are in stark contrast to the 2009-10 Budget forecast of a $409 million surplus," Mr Wyatt said.

 

Full announcements below:

 

Monthly financial figures released
Portfolio: Treasurer

The monthly report of General Government Finances for July - August 2009 were released today, the State's first outturn reports for the current financial year.

Treasurer Troy Buswell said the reports showed ongoing pressure on the State's finances, particularly from the rising Australian dollar and its impact on royalty revenue.

"Spending growth has been impacted by several other extraordinary items at the start of this financial year, including Federal stimulus spending," Mr Buswell said.

"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.

"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 (FTE) 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."

A general government sector operating deficit of $687million was recorded for the two months to August 31, 2009, down from the $73million operating surplus outcome for the same period last year.

"Revenue during the first two months of this year was $110million lower than at this time in 2008-09. This fits with the revenue trend seen through most of the second half of 2008-09," the Treasurer said.

"The impact of the global downturn did not become evident in the State's revenue collections until about September 2008, which is outside the period covered in these reports."

The reports showed Federal Government GST grants and North West Shelf grants were down a combined $236million, partially offset by higher tied grants, including stimulus spending.

Taxation revenue fell $32million, or three per cent, due to this year's later issue of Emergency Services Levy invoices.

"Expense growth of 22 per cent for July and August was driven by several extraordinary items, including Federal stimulus spending. Stripping out extraordinary items reveals spending growth of 9.9 per cent for the period," Mr Buswell said.

Many of the extraordinary costs shown in the report were factored into the full‑year Budget estimates delivered in May.

Overall, general government expenditure increased by $650 million during July and August, relative to the same period last year.

$244 million of this was related to stimulus spending initiated by the Federal Government and a further $43million reflected last year's State Government decision to increase subsidies to Synergy as part of the transition arrangements to cost-reflective electricity tariffs.

An accounting adjustment raised in July 2009 compared with October 2008 effectively brought forward the timing of spending by about $73million in the two months to August 31, 2009.

Excluding these extraordinary items, July and August spending increased by $290million, or 9.9 per cent, relative to the same period last year.

"About $159million, or 55 per cent, of this remaining increase in spending is in higher salary costs, reflecting the timing of wage rate increases and staffing levels, particularly in Health and the Education and Training sectors," he said.

"These rates of growth are expected to moderate in subsequent reports as some of the more significant increases, such as the impacts of the September 2008 teachers wage outcome.

"The Government is very aware of the pressure that salary increases place on State finances and is actively managing employee costs with an FTE ceiling, Wages Policy and the voluntary severance program announced in the 2009-10 State Budget."

Mr Buswell noted the volatility in the monthly reports and cautioned against inferring full‑year outcomes from the July and August 2009 figures.

"However, we expect the rising Australian dollar will continue to put pressure on royalty revenues," he said.

The next update of budget projections would be provided in the mid-year review, to be released by December 31.

 

Opposition statement:

Friday, 30 October 2009

Budget spirals into the red as Buswell fails to cut spending

Western Australia is now $687million in deficit and there is no end in sight to the budget pain the Barnett Government will inflict on Western Australian families, Shadow Treasurer Ben Wyatt said today.

The report on General Government Finances for the months of July and August reveal an accelerating deficit and an admission from the Department of Treasury and Finance that expenses are 'unusually high'.

"Today's figures are in stark contrast to the 2009-10 Budget forecast of a $409 million surplus," Mr Wyatt said.

"There has been a staggering billion dollar turnaround in the reports for the first two months of the year and every Western Australian should be alarmed by this result.

"There is no doubt we can expect to see more cuts to services and bigger increases to family bills as the Barnett Government attempts to claw back the deficit.

"Western Australians should be prepared for the next raid on the family housekeeping money as the Treasurer makes them foot the bill for runaway Government spending."

Mr Wyatt said Government expenses had grown by more than 22% since this time last year, an increase of $651 million, while revenue was down by $110million on the same time last year.

"This expense growth has far eclipsed last year's record growth of 13.5%," he said.

"At this rate of expenditure growth, even a conservative estimate would see the Government spending more than $22billion in the 2009-10 financial year. The Department of Treasury and Finance disclosed the higher expenses were partly due to Commonwealth funded stimulus measures. However, the majority of this expense growth was the sole responsibility of the Barnett Government.

"Mr Buswell can't shift the blame to the Federal Government for this result. The stimulus spending is not responsible for this deficit figure," he said.

"The clear and independent message from Treasury is that the Barnett Government's erratic spending decisions will 'impact both revenue and expenses in 2009-10'.

"Today's report signals future financial calamities that are looming as a result of unsustainable deal done with the Nationals.

"Sending billions of dollars into the regions without adequate management or control is simply unsustainable and the Government must adopt a more responsible approach."

Mr Wyatt said every one of the Treasurer's initiatives to rein in Government spending had failed spectacularly.

"The Treasurer should be working to tighten the reins on his loose financial management," Mr Wyatt said.

"His incompetence in dealing with the Western Australian Government's appalling financial performance will continue to have a direct impact on householders accessing services in this State".

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options