WA debt falls despite record spend

Public sector net debt fell for a fourth consecutive year last financial year, despite the state reporting a 30 per cent increase in infrastructure spend to a record $9.2 billion.

The state’s net debt stood at $27.4 billion on June 30, $521 million lower than estimates in May’s state budget and $10 billion lower than it was four years ago.

The government sector recorded an operating surplus of $5.1 billion over the year, up from an estimated surplus of $4.2 billion off the back of strength in the domestic economy.

Revenue was $43.6 billion, up 1.2 per cent on budget estimates.

State revenue from payroll tax was $54 million higher as employment remained strong and wages grew, while the residential property market’s strength contributed to a $146 million increase in collections from duty on transfers.

Royalties from iron ore were $206 million lower than expected as prices dipped below forecasts, but partially offset by higher lithium royalties – up $133 million.

The result came as state infrastructure spend ramped up $2.1 billion year-on-year, a reflection of the large number and value of projects in the delivery phase.

Metronet accounted for $4.2 billion of the investment, with electricity and water infrastructure spend at $2.2 billion.

Public Transport Authority spending was up 59 per cent, or $763 million, compared with a year earlier as Metronet projects moved into the delivery phase.

Education and health projects attracted $977 million of state spending, with $919 million spent on social housing and land development.

A global budget provision of $1.75 billion earmarked for underspending across the state’s asset investment portfolio did not eventuate as expected, with actual underspending reported at $749 million – attributed to faster than expected delivery on key projects.

Treasurer Rita Saffioti said the results, in particular the reduction of debt, highlighted the continued strength of the state’s economy.

“Lowering our debt levels is critical because it means we don’t waste billions on interest repayments and can instead invest in better services and infrastructure for the community,” she said.

Ms Saffioti said the reduction in debt was a key factor in the state regaining its AAA credit rating from both Moody’s Investor Services and S&P Global.