WITH business investment in WA up 25 per cent higher on this time last year and a resurgence in oil and gold prices, the Gallop Government appears to have everything going for it as it approaches its second budget.
However, Access Economics last week put a damper on expectations of a budget surplus.
The forecaster blamed the WA Government’s unwillingness to cut spending as the reason behind its predicted deficit of $57 million.
A spending blowout in both the general government and business enterprise sectors is primarily to blame,” Access said.
Access Economics’ Budget Monitor has tipped that WA will spend 3.9 per cent more than it budgeted, which more than offsets the extra revenue generated by WA’s expected 5.3 per cent growth in 2002-03.
Figures for the entire Government, including government-owned corporations and general government operations, are expected to provide a $22 million surplus for 2002-03, but the underlying cash deficit is expected to remain at $496 million for 2002-03.
The forecast has led to a warning from the Chamber of Commerce and Industry of WA. CCI chief executive Lyndon Rowe said the Government must start monitoring its own spending rather than looking for tax increases to cover its bases.
However, Treasurer Eric Ripper has condemned the Access Economic forecasts, announcing that the WA Budget should provide a $57 million surplus for 2001-02.
Mr Ripper said it was wrong to suggest that the Government had been lapse in its promises to slash spending. He said $852 million worth of cuts had been identified, with further cuts still expected.
The Access Report found that, despite a healthy export environment for base metals and oil, the WA Government was faring far worse than other manufacturing-dependent States.
Combined, the States and Territories are expected to record a surplus of almost $60 million.
New South Wales and Victoria were the two standouts, both expecting $1 billion-plus surpluses, with the overall figure pulled down by WA’s underlying cash deficit of $863 million, South Australia’s $285 million deficit and a $1 billion deficit for Queensland.
BankWest economist Alan Langford said WA was hampered somewhat by stamp duty revenue being less relative to both New South Wales and Victoria.
“We have not been getting the stamp duty windfall relative to NSW and Victoria because of the higher value of the property prices there and the growth in property prices has moved up more rapidly compared to WA,” Mr Langford said.
