THE rising value of the Australian dollar risks putting a big dent in the State Government’s budget figures, Treasurer Eric Ripper said this week.
Mr Ripper issued the warning as he announced a better than expected outcome for the 2002-03 financial year.
The State Government achieved an operating surplus of $250 million, double the level originally expected.
Total government revenue rose 6.9 per cent, mainly because the buoyant property market boosted conveyance duty and higher oil prices lifted petroleum royalties, outstripping the 6.5 per cent growth in government spending.
Mr Ripper emphasised the revenue “windfall” was not sustainable and insisted the State could not afford to increase its wages offer to public servants and teachers.
“The bubble will burst,” Mr Ripper said.
“So instead of spending up to the limit we have invested in the future by reducing our State borrowings.”
Total public sector debt was $4.4 billion at June 30 2003, down slightly from the previous year and well below the original budget projection.
This was attributed to the better than expected surplus and lower than expected capital spending on roads and the southern railway.
Mr Ripper said the budget would be adversely affected by the ending of the property boom, a “significant” reduction in Commonwealth competition payments and a higher exchange rate. Each one cent increase in the value of the $A would reduce annual royalty revenues by $18 million.
© Business News 2018. You may share content using the tools provided but do not copy and redistribute.