09/01/2009 - 15:26

State $17m in the red in October

09/01/2009 - 15:26

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Western Australia has hit its second operating deficit in four months with the state's monthly report revealing a deficit of $17 million in October, down from a surplus of $458 million from a year ago.

Western Australia has hit its second operating deficit in four months with the state's monthly report revealing a deficit of $17 million in October, down from a surplus of $458 million from a year ago.

In releasing the Monthly Report of General Government Finances for October 2008, Acting Treasurer Peter Collier said the deficit was unusual for that time of year.

Mr Collier said the report again showed that public sector expenditure under the previous Government had been out of control, reaching $1.8 billion for the month - an increase of $319 million - bringing the growth in spending to 13.6 per cent over the first four months of 2008-09.

The spending surge was driven partly by public sector pay rises, which pushed the government's wages bill 17.8 per cent higher than it was a year earlier.

Other factors contributing to the October deficit were the softer property market, causing stamp duty income to fall, and the late issue of land tax and MRIT assessments. Revenue was down $155 million on October 2007 to $1.8 billion.

"We have divergent trends occurring at the moment," Mr Collier said.

"Income is heading south due to difficult economic conditions largely beyond our control, while at the same time the State Government's outlays are rising exponentially.

"Now, we can do something about spending, and we are. A start has been made with the drive for three per cent savings through department efficiencies, and we also have an expert group reviewing our finances and spending in detail which will help guide us in bringing some discipline and priorities to the coming budget process for 2009-10.

"In the meantime, the State Government has to hold firm on the efficiency savings.

"We have a responsibility to keep the State's finances on a sound and sustainable footing.

"I believe the community at large will be behind us in doing whatever it takes to ensure this goal is achieved."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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